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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The Power of Passive Income – How Passive Income Saved Me At Least $27,880

John S. — Fri, 13 Feb 2009 12:13:29 +0000

This is a guest post by Dusty from Chasing The Bull. Please check out his blog and subscribe to his RSS Feed.

When I first began to gain control over my financial destiny, analyzing my monthly budget was a humbling experience. I quickly learned that personal finance experts, such as Dave Ramsey, suggest spending no more than 25% of your take home pay on your mortgage. Unfortunately, my wife and I had already purchased our dream home which eats up about 40% of my monthly take home.

I needed a way to either decrease my monthly payment or increase my monthly income. As the current real estate market in our area is terrible, I opted to increase my income. I did not, however, want to get another job. Spending time away from my friends and family is not something that I am willing to sacrifice. Luckily, I learned about the power of passive income.

In October of 2008, I began writing articles for a few revenue-sharing websites, such as eHow and Today dot com. While these sites will not make you rich overnight, they can provide additional income to help pay a few bills.

On average, it takes me about 30 minutes to create an article. Through the end of January, I have written 85 articles, which equates to about 42 1/2 hours of work. These articles earn approximately $50 a month and should continue to produce the same income indefinitely, which makes them truly passive streams of income.

For the sake of the following examples, please assume a 30-year mortgage of $200,000, fixed at 6%. Adjust these numbers to your personal situation as needed.

My wife and I have elected not to spend this money each month on ourselves, but to send these passive earnings as an additional payment to our mortgage company.

By paying an additional $50 per month towards the mortgage principle, we will save $27,880 in interest AND knock off 3 years from our loan. When you increase these numbers, the savings become even more exciting. An additional $100 per month will save us $49,139 in interest and knock off 5 years and 5 months from our loan. I hope to get to this level within a few months.

It is my experience that most people who write for eHow have set a goal of earning $1,000 per month from eHow alone. If you were to apply that amount to your mortgage principle each month, you would save $164,269 and knock off 19 years and 10 months from your loan. As you can see, with a little hard work and a lot of dedication, creating passive streams of income can be extremely worth while!

How much money could you save with a little effort? How much is 30 minutes a day worth to you?