Passive Family Income » generate passive income

How to Make Over $400 per Hour in Passive Income

John S. — Wed, 04 Aug 2010 11:44:22 +0000

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.

Additional Tip – Look for other ways to reduce expenses to save even more, such as a mortgage refinance to get a lower interest rate.

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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10 Simple Reasons Why I am Building Passive Income

John S. — Thu, 22 Oct 2009 11:20:29 +0000

Will passive income make you rich? That all depends on your definition of “rich”. My plans for building passive income will make me and my family rich one day. But it is not necessarily the kind of rich that is monetary. It is a different kind of rich that is more meaningful and rewarding than money.

Establishing recurring revenue streams as a result of passive income will no doubt increase our wealth. Even more important though is the side effects that generating this type of income will bring. Those “side effects” will make our lives simpler.

Time and freedom are the two side effects that I am referring to. Creating recurring income streams that can cover our monthly expenses allows my family to make changes from our current situation. It allows me to break free from my current job and find one that is much less demanding. It will also allow my wife more time to herself to explore more of her interests. Our children will also benefit as they will have their father around more than they currently do.

Please keep reading to see a few reasons why I am passionate about building passive income and the side effects it can bring!

10 Simple Reasons Why I am Building Passive Income

My reasons for building passive income are not to become a millionaire (although I wouldn’t turn it down) or have expensive toys. It is reaping the side effects that come along with the income – most notably time and freedom. Here are 10 random reasons and motivators as to why I am working so hard to create passive income.

Coach My Son’s T-Ball & Flag Football Teams
Get More Sleep (more than six hours that I get now)
Have Morning Coffee with My Wife Every Day
Take Weekend Trips with My Family to see New and Exciting Things
Learn how to Cook the Right Way and Prepare Healthy Meals for My Family
Drop My Kids off and Pick Them up From School
Have Lunch with My Oldest Son Once per Week at His School
Start a Weekly Date Night with My Wife
Begin a Training Program and Qualify to run in the Boston Marathon
Help my Children Learn to Read, Write, Add, and Subtract

This list may actually seem a little funny to some, but are very important to me. I do have the time to do some of these things today. However, I don’t have the freedom to do them all, nor do I have the freedom or choice to do them everyday.

Daily Life Changes

As you can tell from the list above, my reasons for building passive income are really very simple. I want to have the time and freedom to participate in these daily and weekly activities. As the sole income earner for our family, I don’t have these luxuries based on my current job. Passive income is my solution for changing this!

What motivates you to create passive income?

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5 Ways Passive Income can Improve your Marriage

John S. — Sat, 17 Oct 2009 13:48:54 +0000

One of the most common arguments that married couples tend to have is over financial matters. Let’s face it, a marriage should not be dictated by money, but that isn’t always the case. Whether it be lack of communication over the family finances, struggling to pay the monthly bills, or over spending and going into debt – a couples finances can be a huge factor in the success or failure of a marriage.

There are some opportunities however that couples can take to help improve their marriage when it comes to money. One way to help improve your marriage is to create passive income. You may be thinking to yourself – How can passive income help improve my marriage? It doesn’t seem like the logical solution, but it really can help.

If you are interested in learning more, check out a few of the ways that passive income can improve your marriage listed below.

1. Spend More Time with Each Other

One of the most common reasons a marriage fails is a result of not spending enough time together with your spouse. This can be caused by many factors including work. In order to survive and pay the monthly bills, at least one of the partners in a relationship is usually spending a lot of time at their job. In many cases, both partners are working, sometimes different shifts!

Establishing solid passive income streams takes some of the pressure off of working so much. While this type of income may not allow married couples to completely quit working, it can allow one or both to reduce hours at work. It may also allow one or both members in a relationship to take a less demanding job. All of this extra time can really go a long way to improving your relationship with your spouse.

2. Raising Children

Anyone who has children can tell you the raising kids can get very expensive. Buying diapers, saving for college, and paying for day care are just a few extra costs involved with having children. These extra expenses can really put a strain on a couples marriage, as financial matters tend to cause many couples to split up.

Earning additional income through recurring passive income streams can help offset expenses associated with raising children. Even setting up an income source that can be put into a 529 College Savings Plan or help pay for day care can make a huge difference in your personal finances. Alleviating any concerns around paying for these costs can go a long way in improving your marriage.

3. Gifts, Surprises, and More!

Do you ever surprise your spouse with gifts or special weekend getaways? Sometimes a nice long weekend getaway is just what a marriage needs. Unfortunately it isn’t always in the budget to account for these special gifts or occasions.

Earning passive income is one way to help supplement your income that can be used for these special times. While money should not dictate any marriage, giving small little gifts and surprising your spouse can improve your marriage.

4. Simplify Your Life Together

Bills, bills, and more bills. Does it seem like every time you get finished paying off your monthly bills, the next ones start coming in? Earning passive income can actually help you and your spouse simplify your finances and daily life.

As a test, identify a monthly bill that you receive every month. This could be a car payment, cable or cell phone bill, credit card statement, etc. Just think how much simpler your life could be if you had enough passive earnings coming in each month that could make your monthly car payment. Making your personal finances simpler will no doubt have a positive impact on your marriage!

5. Retire Early and Enjoy Life

Planning for your retirement may not always be the first thing that comes to mind in a marriage that is in jeopardy. However, if both you and your spouse can set some realistic financial goals that involve the planning of your future (including retirement), you will both be on the same page. Communication is one of the most important parts of marriage and can make or break its success.

Passive income can play a huge role in any retirement or financial planning between you and your spouse. Sit down with your spouse and create a financial plan that includes the building of passive income streams. Communicating and planning with your spouse can go a long way in improving your marriage and help with your personal finances.

Can Passive Income Save Your Marriage?

Telling someone that passive income can save their marriage probably seems like a strange statement. A marriage should not be dictated by financial matters at all. If two people truly care about each other, then money should never cause any conflict. Unfortunately, that isn’t always the case, as financial issues can cause stress and problems in a marriage.

Since money matters tend to cause conflicts in a marriage, taking actions to avoid these concerns can really help the relationship between you and your spouse. Generating consistent passive income is just one opportunity couples can take to improve their relationship and marriage by taking money issues out of the picture!

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Why I May NEVER Outsource Again

John S. — Mon, 05 Oct 2009 10:54:02 +0000

Over the past several months I have outsourced several projects and tasks associated with building passive income streams. In an effort to save more time and maximize my earnings potential, I decided to take some of my eHow earnings that I had accumulated and reinvest them. On paper (at least to me) this seemed like a great idea.

Unfortunately things didn’t work out so great for me. I had three main projects or tasks that I had decided to outsource which would help me focus more time and attention on other tasks. The details of my experience are highlighted below and are reasons why I may NEVER outsource again!

Keyword Research

One of the first jobs that I outsourced was conducting keyword research for a niche site I wanted to build. I outsourced this job with a set of guidelines (unfortunately not too specific) to conduct some extensive research on keywords and domain names. My plan was to eventually take this research and build a website that would earn a steady monthly income.

The intent for outsourcing this job was to save time. In the end, I probably spent more time working with my virtual assistant (VA) on figuring out what exactly I wanted. I paid my VA less than $4 per hour which seemed great. However, if you throw in the time that I spent plus the double work of my VA, I ran up a ton of hours on this project.

I did find an alternative that has turned out to be much more reliable and affordable. For just a little more money than what I paid for my outsourcing job, I purchased Micro Niche Finder. I have been using this tool ever since and have postponed any outsourcing of keyword research!

Ghost Writing

Another brilliant plan that I thought I had was to begin outsourcing articles using Elance. The idea was to take passive income earnings from eHow and begin paying others to start writing content for various niche websites that I planned on building.

Of the three projects that I outsourced, I found this one to be the most successful. I found that the average rate being charged is about 2.5 cents per word (give or take) for a written article. So for a 500 word article, I paid about $12.50 for someone else to write it for me.

Because of my frugal nature and unwillingness to pay for things, I probably won’t do this again for a while. I got some good articles that I used on a few niche sites (not on PFI!), but am not sure they are worth the cost at this point. Sure, I could probably find someone who would write an article for less than that rate, but the quality would be poor.

I still think this may actually work for eHow, but have decided to continue writing my own content – at least for now!

Thesis Customized Design

The most recent job that I decided to outsource was for a customized look for PFI. I have been (and will be for some time) using Thesis as my WordPress blog theme and think it is great. The only problem is that the majority of other bloggers who think Thesis is great have a site that looks similar.

I ended up outsourcing this work to a freelancer who specializes in customizing websites and blogs. As you can tell, the new look is unique from other Thesis users which I am very happy about. Overall, the designer did a good job finding out what I wanted my site to look like and built the customized look.

Unfortunately there is not a happy ending to my experience. There are still several little things that have not been finished on my site. For example, if you use Internet Explorer to view PFI, then you can see what I am talking about. I have not been able to include several other features that I had originally planned on with this site because of some coding issues.

Originally the freelancer agreed to fix everything on my site at no additional cost. Six weeks and five unanswered emails later with no response, I am now tasked with fixing these issues on my own.

Overall I think I got a good deal for what I paid for my customized look (compared with other freelancer bids). However, I now have a site that is 80% complete and will have to devote my own time to finishing the remaining 20%!

Saving Time vs. Spending Money

In the end, outsourcing for me comes down to saving time versus spending money. The three projects that I recently outsourced cost me a few hundred dollars combined. When I look back a few months later, very little of the money I spent has been able to bring in more income for me. Furthermore, the amount of time I thought I was going to save was not as big as what I had hoped for.

Overall this has been a good experience for me that I wanted to share with my readers. I still believe that outsourcing can be a great tool when building passive income. I will probably be holding off from outsourcing any new work for some time. However, if I can learn from my mistakes, then there still may be a place someday to outsource some of my work!

How successful have your outsourcing jobs been?

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How to Buy Internet Real Estate on Sale

John S. — Mon, 28 Sep 2009 11:34:22 +0000

Have you ever bought something from a store that you didn’t plan on? My wife and I do it all the time. Every week, we check up on the advertisements that come out from our local grocery and department stores. This is one of the factors on how our family can live comfortably on a single income.

We are not buying items that we don’t need or won’t use just because they are on sale or on clearance. Instead, we purchase items we will use and have a need for. Each purchase is carefully calculated to ensure we are not just buying to buy (within reason of course).

This same shopping philosophy can be used when creating passive income. While there are some free passive income opportunities available to start, the majority of them require some up front costs to launch. One example of how I recently saved money launching a new passive income stream is detailed below.

Passive Income Tools on Clearance

One of the favorite and more successful passive income streams used by many people today is niche blogging. This form of passive income building usually requires the purchase of internet real estate. There are actually some FREE resources available to setup a niche Blog like Blogger, but there are many advantages to owning your own site versus using a free one.

Over the past several weeks, I have been working on researching keywords for a new niche site I plan to launch sometime this year. I had just completed my research and had the details mapped out on my plans for this site. My plan was to go-live with the site sometime later in the year, once things slowed down at my current job.

Then I came across a deal that was being offered by Go Daddy for setting up a new hosting account. For less than $5 per month, Go Daddy was offering the chance for me to get this site started for very little out of pocket expense. In fact, they were also offering a few other additional features that helped make my decision very easy.

In addition to the cheap hosting costs being offered, the current deal also included -

$1.99 Domains – For a limited time, Go Daddy was offering $1.99 domains when you purchased a non-domain related product. Since I needed to purchase a domain name for my site, I decided to jump on this deal!
WordPress Installation – I use WordPress for all of my sites. If you sign up for a WordPress Hosting account through Go Daddy, they will do the complete installation for you! I actually don’t really mind doing this setup, but I know that this is one area that people dislike the most. In less than 24 hours from my purchase, I had a fully functional installed WordPress site for less than $5 per month! I would highly recommend this service to anyone who dislikes the WordPress setup.

I had never intended to go-live with my new site for a couple of months. However, when the recent deal from Go Daddy came out, I couldn’t pass up this opportunity. My total cost per month for the domain name and hosting account will run me $4.42 per month or about $.15 per day.

Low Barriers to Entry

As an investment, the barriers to entry for internet real estate are very low compared to other opportunities. The potential return on investment is very high for the little amount of money typically required for start up. This makes it much easier for the average person who does not have a lot of savings or capital to get started. All that remains is your hard work and dedication to make it a success!

So what are you waiting for?

GoDaddy.com! Resources

Blogging made easy – WordPress Hosting from GoDaddy.com!

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