How To Make Passive Income with $1000
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How To Make Passive Income with $1000
Welcome to FrankLegend.com where we review great content that has gone viral. Today we will learn about passive income, what it is and how you can start making money with out lifting a finger.
What is Passive Income?
Passive income is earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved. As with active income, passive income is usually taxable, but it is often treated differently by the IRS. That is the definition I found from Investopedia.com. Look at that I saved you another google search lol
Why is passive income so desired? Well simply put, it’s money you can make while you’re literally sleeping. This is one of the secrets on how the rich get richer. Investing in secure ways to make money with very little effort is the goal for people that wish to retire early or not looking to work 60 hours a week for 180 years. This is a different mindset to some people but after networking with many multimillionaires and angel investors, I can assure you this is the way rich people think. The sooner you start thinking like a rich person, the sooner you can make millions easy. A good book to read on this would be Rich Dad, Poor Dad by Robert Kiyosaki. That will change the way you look at money forever! Now let’s look at some of these tips.
1. Dividend Stocks
Getting involved in the stock market is the best way to start investing in your future. This should come as no surprise to some people but let’s look at some of Graham Stephan’s examples from this video.
If you were to buy 1 share(portion) of Apple stock, you now own 1/4,600,00000th of the company. Since you now own a portion or “stock” of Apple you are entitled to some of their earnings which is usually paid out every 4 months.
Apple’s dividend pays out 1.69% to you annually which means for every $100 you invest, Apple will give you $1.69 in passive income every year. Yayy you can buy some candy now.. lol
I know, $1.69 every year doesn’t sound impressive at all. But let’s take another example Graham poses. If you bought $1,000 of Apple stock and it goes up 8% you are looking at a dividend return of $80.
Apple stock is just one example at a dividend return of 1.69% but there are other stock options like AT&T at 6.44% dividend yield. Coca Cola at 3.15% and Wells Fargo at 3.92% div. yield. So imagine buying a variety of different stocks at the same time.
This can soon add up to a lot of different sources of passive income depending on how much you stock you end up buying. So instead of spending money on useless things like the latest fashion trends, imagine using that $500 on stocks. It all ends up adding up to your wealth.
If you want a way to get involved in the stock market its actually super easy now with apps like Robinhood or WeBull. I personally use these apps myself and even got a personal stock group on Telegram if you’re interested in joining.
Feel free to use these links to start making that passive income today!
2. Index Funds
Index Funds are another great way to create passive income with a higher potential of success. Why?
Because instead of buying 1 stock share of 1 company, an index fund is basically a bunch of companies all together in one fund so the success and earnings are potentially higher. Below is the definition according to Investopedia.
An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor’s 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
Index funds are generally considered ideal core portfolio holdings for retirement accounts, such as individual retirement accounts (IRAs) and 401(k) accounts. – Investopedia
3. REIT's
A REIT stands for Real Estate Investment Trust. This is another way to create passive income & get involved in the real estate market (9.6 trillion).
Basically it’s like Index Funds but for real estate companies that need your money/investment to go buy different properties like hospitals, restaurants, apartment buildings etc. That’s the simple explanation. Here is the more sophisticated definition from our friends at Investopedia.
A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs pool the capital of numerous investors(you). This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves. – Investopedia.
This means if you put your $1,000 in a REIT you would then have partial ownership in the real estate properties they buy so that entitles you to some dividend returns. Ca Ching.
4. Government Bonds
Bonds are another great way to make money with sure fire success. Why?
Because Bonds are an investment you can make with the government. This means unless a state or country goes bankrupt you will always be paid back your investment with interest. The drawback to this is that they set the terms of the type of loan you give them and it’s up to you to decide if you want to get involved. So it might be more than a measly $1,000 to actually seen some REAL money. Here is a better definition below.
A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer. Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments made by the borrower.
5. Youtube
Yes, YouTube is a great way to make money with out doing anything. Sorta.
Personally, I have made lots of money off of YouTube just by talking about random things I come up with on the fly. Now if you were to actually invest $1,000 into equipment, your return would definitely pay off in the end. It all depends on how SERIOUS you take it. Some people will try to get into YouTube and feel disappointed that they don’t make any money the first day lol It is HARD WORK and Consistency! You have to earn it.
Speaking from experience I’ve had months when I only made $2 and other months when I made $3,000 off of a literal hobby of mine! It varies for everyone and I know how much time it takes and how exhaustive it can get. I can assure you I still make money today off of videos I made 7 years ago. So my stream of passive income is definitely there and that’s after not making videos for a year and a half (don’t ever do that).
Graham Stephan goes into more details about this in his video and his own experience with Youtube but yup there are some Youtubers that make millions every month. Facts!
Final Thoughts
This video is definitely worth the watch and although I only gave you a very simplified or “frank” version of these tips, I would encourage you to watch the whole 15 minutes of it because there are some great nuanced thoughts that Graham talks about that I might have missed here. He goes into more specifics about these tips and of course there are plenty of other YouTubers that can talk more in depth on every single point because there is so much to each one you have to consider. Hope this article helps you start your journey on finding the best way to make passive income and growing your wealth. Please make sure to check out my YouTube channel for other tips and advice or entertainment if you need a break as well as reading Rich Dad, Poor Dad by Robert Kiyosaki. Enjoy!
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Frank Legend
Frank Legend is Youtuber with 100,000 subscribers, over 21 million views, an influencer in NYC and previously worked at The Wall Street Journal. Get to know him on Instagram @FrankLegend
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