piggy bank

8 ways to obtain passive income

piggy bank

A few years ago when I read Rich Dad, Poor Dad, the concept of passive income lit my brain on fire. I had never thought of the idea of making money for nothing.  I assumed that money was achieved only due to the hard-pressed exchange of time for filthy lucre.  Kiyosaki, the author of RDPD, assured us that passive income was the key to wealth.

Where is the passive income?

I plunged into research. I identified rental income, investment income and even creating original content as “passive income.”  I had visions of checks flowing in, one after the other, landing in a pile on my desk called the PI pile.  But after time, I realized that the pursuit of passive income was nearly impossible through these routes.  How can you really make passive income?  Inquiring minds want to know.  These are the top 8 “real” ways to make passive income, but even they have a catch – all but the last one.

  1. Pick up spare change off the ground. You do have to bend over, but you probably do that at work every day, so you’ll at least be getting something out of this transaction.
  2. Marry someone rich. You’ll have to do some work, true, but if you aim high enough we’re talking about a huge return on investment here.
  3. Hook up with someone rich and desperate enough to pay to keep you around – the classic “sugar daddy” scenario.   Granted, you may have to do some work here… but I’ve seen this work out where surprisingly little effort is expected in return.
  4. Have someone else do the work for you; a nice trick if you can manage it.  Ask your buddy the web designer to create a website for you – for free.  Why would he do it?  The exposure?  The joy of being taken advantage of?  Don’t worry – you’re getting passive income!
  5. Win an office lottery pool. OK, you risked a few dollars, but someone else went to the bodega, bought the ticket and checked the results.  You didn’t put much sweat into your share of the Mega Millions, did you?
  6. Gamble. There is, of course, a potential downside here.  But if sitting around sipping free martinis while playing a game and winning isn’t as close to passive income as possible, I don’t know what is.
  7. Invest in dividend-paying stocks. This point is a cheat.  You have to earn the money that you use to buy the stock.  On the other hand, everything that happens after you buy it is gravy.  That income becomes close to truly passive – so the trick is to use windfalls (an economic stimulus check, for example) to invest in dividend-paying stocks.
  8. Be born rich. Yes, you might have to be nice enough to great-aunt Milfred to avoid getting cut out of your trust fund, but let’s face it:  this is as close to passive income as you’ll see in this life.

Don’t think you’ll get rich without working for it.  Everything you can generate wealth from takes effort.  Writing a book is hard work.  Blogging is hard work.  Rental income is hard work.  It may create a wealthstream for years to come, but that’s what you should be aiming for:  wealthstreams, not passive income.  Don’t imagine that there’s a magical key to wealth that doesn’t involve either hard ongoing work or a good bit of upfront work.

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  • Sun

    LOL, funny… :)

    And I thought you were going to say have a savings account!

    • http://www.bripblap.com Steve

      Too obvious, Sun :)

  • http://www.myjourneytomillions.com Evan

    What a depressing post I figured If I just bought RDPD someone would send me checks…damn it

  • http://sahmnambulist.blogspot.com Emily Guy Birken

    I’m glad you wrote about this. I hate how people talk about Passive Income as the path to wealth. There is no such thing as a free lunch, and I feel like people like RDPD make money off the fact that people don’t want that to be true. I also feel like I’m sometimes looked at strangely among some PF circles because the idea of passive income has me rolling my eyes. (Granted, I could probably be a little more polite about my opinion. But the eye roll is simply a reflex.)

  • http://www.bankverse.com Ron

    My measure of monetary wealth is when income from assets and investments becomes equal to or greater than expenses needed to live the lifestyle chosen.

    If my measure is accepted then some may say that the income as it approaches the tipping point of wealth is passive. I would argue otherwise, or at least that passive wealth is a sliding scale whereby the greater the wealth, the more passive it becomes. At no time does the accumulation of holding or assets become hands off while building wealth itself. To be passive during that stage is to let wealth bypass you. One must actively participate.

    But monetary wealth is just one aspect of true wealth. True wealth is comprised of two other ingredients besides money; love and happiness. Perhaps cliche, but truer words have not been spoken.