Do you own a home that you are paying a mortgage on? What about other forms of debt that you may have? Wouldn’t you like to pay off your debts sooner so that you could use that money on other things? Think of all the extra cash you would have coming in each month just by eliminating your mortgage payments!
What if I said that you could make $400 per hour or more by building passive income streams? Sounds to good to be true – I know. However, if you break down the numbers (as I have below), you can see the power of passive income and the importance of paying down your debt early.
We are going to look at an example of how we can devote some time and hard work upfront creating a passive income stream that will pay us over and over in the future. Each month after we have received our passive income earnings, we will use that money to make additional payments on a mortgage which will show the importance of paying down debt and how much money it can actually save us!
Hypothetical Mortgage
The following is a hypothetical mortgage payment that we will use as an example. All of the numbers are fictitious and are simply being used to show the importance of passive income and paying down debt.
- Total Mortgage Amount – $250,000
- Interest Rate – 6.5%
- Length of Loan (Years) – 30
- Monthly Payment (Principal & Interest) – $1,580.17
- Total Amount to be Paid on the Loan – $568,861.20
Passive Income Stream
For the purposes of this article, we will be using eHow as our passive income stream because of the low barriers to entry with this tool. If you are just starting out or don’t know anything about eHow – all you need is a computer, internet access, and a creative mind. If you don’t like eHow, then feel free to plug in any passive income stream of your choice.
- “How To” Articles to Write – 100
- Total Estimated Hours to Complete – ~75 hours
- Estimated Months to Complete – 2 months
- Estimated Earnings per Month – $50
Are you looking for some ideas on how to maximize your eHow earnings? There are people just like you earning over a $1,000 each month on a recurring basis from eHow. Here is a great resource that can help – How to Earn Passive Income on eHow.com: Maximize Your Online Earnings. I purchased this resource several months ago and have made my money back within the first month using the guidelines laid out.
I have estimated that it would take an average person approximately 45 minutes to write 1 eHow article. For more advanced eHow contributors, it may take as little as 15 minutes to write one article compared to 60 minutes for someone who is new to the tool.
Based on spending 45 minutes per article, I am estimating it will take approximately 75 hours (4,500 minutes) to write 100 eHow articles. In addition, I am estimating that publishing 100 quality eHow articles should allow you to make at least $50 per month (.50 cents per article per month). This number is definitely on the low side and some authors earn several dollars per month per article.
I am also estimating that it would take an average person between 2 – 4 months to publish these articles if they remain dedicated. That would translate into about 5 – 10 hours spent per week over the course of a couple months.
Pay $50 Extra per Month on Your Mortgage
Since we now have spent around 75 hours building our passive income stream, we can sit back and start watching the money flow in. The only thing we need to do at this point is to funnel our earnings from eHow into our monthly mortgage payments.
- Updated Monthly Payment (Principal & Interest) – $1,630.17
- Length of Loan – 27 years & 5 months
- Total Amount to be Paid on the Loan – $535,950.18
- Total Savings – $32,911.02
Assuming we can maintain at least $50 each month in passive income earnings that can be including in our monthly mortgage payment, we would save $32,911.02 over the lifetime of the loan. If we calculated out how much we made back by dedicating that 75 hours upfront, we would have made $438.81 per hour for our time spent.
Assumptions
We obviously made some assumptions in figuring out our calculations and savings noted above. Here are some of those assumptions we made.
- We can maintain a $50 per month passive income stream until the mortgage is paid off. This is probably unlikely using eHow – but you never know.
- The $50 additional payment is made on your mortgage starting in the first month.
- Your passive income earnings don’t exceed $50 per month. This is also somewhat unlikely as your earnings from eHow should increase month to month.
Final Thoughts
The example of earning over $400 per hour above is based on a ficticious mortgage and passive income stream. However, based on personal experience, these numbers can be achieved with some upfront hard work and dedication. As stated earlier, the mortgage can be replaced with any type of debt (i.e. car payment, credit card debt, etc.) and the passive income stream could be anything you have found success with. There are obviously some passive or alternative income streams that can earn you thousands of dollars each month. The key is what will you do to maximize your earnings from this income?
Do you use your passive or alternative income to pay down any debt? What has your experience been doing this?
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I’ve never written an eHow article, but your success has inspired me. I’ll have to look into this. Thanks for the idea.
Corporate Barbarian’s last blog post..My Own TPS Report Story
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pfincome Reply:
June 18th, 2009 at 6:30 am
@Corporate – Thanks. Hopefully I can inspire some others to check out eHow as a few fellow writers inspired me. Once I saw people making $1K+ per month on this revenue stream I figured I should try.
I will say that eventually I will start writing less for eHow as other streams that I own outright take over. I am using my earnings now to outsource other projects as well as reinvest into additional passive income streams.
pfincome’s last blog post..Micro Loan Status – June (2009)
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If this article does not inspire people to start creating passive streams of income, nothing will.
Dusty’s last blog post..198 Day Passive Income Challenge – Day One
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pfincome Reply:
June 18th, 2009 at 6:32 am
@Dusty – Thanks! There are so many ways to play this and pay down debt or reinvest back into more passive income!
pfincome’s last blog post..Micro Loan Status – June (2009)
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It was your writing about E How that got me going writing articles for that site. This is a very encouraging and motivational post to illustrate how well this could happen. You might want to consider adapting this post into a specific article for E How on your way to the $400 per hour
Steve’s last blog post..How To Get Off Your Butt When You’re In a Slump
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I LOVE this! $50 seems like such an insignificant amount of money until you put it to work like this.
Julie @ Write for eHow’s last blog post..eHow Earnings: My First $100+ Article
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This is a very interesting way to make money. After reading this article, I think I will check into this. I’d thought of writing articles for eHow, but thought it took so much time and the payout wasn’t that great. Maybe I’ll revisit this idea. Thanks so much for sharing this.
Debbie’s last blog post..Michael Jackson and Farrah Fawcett’s Deaths
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I love the power of passive income. What a wonderful post you’ve written here, showing everyone how powerful even a little bit of passive income can impact their lives.
Cyn’s last blog post..eHow Contest Prizes
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bullsh*t
no way will your original investment of 75 hours continue to generate $50/month – your articles will get buried by all the other clowns jumping on the same band wagon.
you’ll have to keep investing 75 hours periodically to sustain that $50/month – so your $400/hour is a pipedream.
more like – you’ll make $1.50 / hour (that’s IF you can get $50/month)
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passivefamilyincome Reply:
September 29th, 2009 at 9:40 pm
@TheShadow – I actually wrote 72 articles in August and made $124.27 from those just in the first month. Based on the time I spent, I earned about $2.95 per hour. Not great, but it cannot go any lower! In fact, I have made about another $100 in September just from those 72 articles bringing my earnings per hour up to $5.35.
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I found this a really thought provoking take on how passive income can work for you. It doesn’t even take into account additional income you can earn promoting affiliate links and from backlinking, so I would even say it errs on the conservative side.
I’m just starting out into developing a passive income, but will certainly investigate eHow as part of the mix.
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Interesting math. You can make a few dollars with targeted Resource links. Sometimes I look for a good resource with an affiliate program and then write the article loosely around that (without making the article read like spam). Always enjoy reading your posts.
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The best thing about your article is that it shows how wonderfully lucrative passive income can be. Instead of trading hours for dollars, you begin to move into an entirely different sphere of earning income and your mindset changes. You do the work once which requires a set number of hours to complete but as time progresses, you generate more and more income so your original hourly wage that you figured just continues to increase. Once people really grasp this concept, how could anyone ever go back to the 40-hr rat race for a fixed income?
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Thanks for your article on using Ehow. I somehow had forgotten this was an option for some extra money! I have setup a personal goal to write 100 articles. I just wrote my first eHow article this afternoon. 1 down!
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pfincome Reply:
March 8th, 2010 at 5:57 pm
@Laura – Congratulations on writing your first article! Just remember to back all your articles up in a separate file in case something happens to them!
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