Passive Income Streams?

Investopedia defines passive income as; income that requires minimal effort to obtain. It is the opposite of active income, which is income received from a job or business venture that requires active participation.

It is almost like the golden goose most people are searching for. A way to generate residual, consistent income, with minimal to no effort expended. While I disagree with the premise that this income is entirely passive, I prefer to call it semi-passive, or less active income. As you will see throughout the next few paragraphs, there is always effort exerted in the pursuit of this income, the question really is, how much effort and is it worthwhile (is the return or yield commensurate to the exertion).

I will outline two sources I referenced in writing this article, ChatGPT as I was learning how to improve my workflow, as well as a mainstream media article. In the final paragraphs, I will reveal which income streams I currently, possess, and some that I am working towards acquiring.

ChatGPT when prompted: ‘What are 10 passive income streams’ spat out:

Passive income streams are sources of income that require minimal effort to maintain once they are established. Here are ten examples of passive income streams:

1. Rental income from properties - If you have a property, renting it out can generate regular rental income.

2. Dividend-paying stocks - Investing in dividend-paying stocks can generate a regular stream of passive income.

3. Peer-to-peer lending - Investing in P2P lending platforms allows you to earn interest on your money without actively managing the loans.

4. Affiliate marketing - Promoting other people's products and earning a commission on sales can be a good source of passive income.

5. Creating digital products - Creating an eBook, online course or software can generate a stream of passive income from sales.

6. Rental income from storage space - Renting out storage space, such as a garage or attic, can generate passive income.

7. Investing in real estate crowdfunding - Investing in a real estate crowdfunding platform can generate passive income from rental income or returns on investment.

8. Creating a mobile app - If you have coding skills, creating a mobile app can generate passive income from advertising or in-app purchases.

9. Creating a blog or YouTube channel - Creating content that generates traffic and advertising revenue can be a source of passive income.

10. Selling digital products on Etsy - Creating and selling digital products on Etsy, such as printable art or digital planners, can generate passive income from sales.

Compare this to an article from CTV News, “Top sources of passive income for Canadians looking to earn more”, where the author outlines very similar examples :

1. Dividend Stocks - When you invest in dividend stocks, you buy shares in companies that pay out part of their earnings to shareholders like you. Pick companies with a strong history of paying decent dividends. Dividends are usually paid quarterly, giving you a nice, steady cash flow.

2. Real Estate Investment Trusts (REITs)- REITs let you invest in income-producing properties without actually owning or managing them. They make money through rent and property appreciation and pay out dividends monthly. A good way to research dividend stocks and REITs is by using stock screeners. You can filter the stocks based on specific criteria, such as dividend yield, dividend growth rate, market capitalization, and payout ratio. Examples of stock screeners include Finviz and Yahoo Finance. Stock screeners usually have news sections about the stock so you can stay current with it.

3. Bonds and Fixed Income Investments- These investments, like government or corporate bonds and Guaranteed Investment Certificates (GICs), pay you regular interest and return your principal when they mature. By building a diverse portfolio, you'll get a predictable passive income with less risk.

4. Rental Properties- When you buy rental properties, you're making money by renting them to tenants. You'll get a steady stream of passive income through rent, and your property may even grow in value. You can choose to manage everything yourself or hire a property management company to take care of it.

5. Online Businesses- This category includes ventures like e-commerce stores and affiliate marketing websites. Once you've set up your online business, you can earn passive income through sales, ads, or commissions. It takes some effort to start, but the earning potential and flexibility can be worth it.

6. High-Interest Savings Account- These accounts, offered by banks and credit unions, pay you higher interest rates than regular savings accounts. Just deposit your money and watch your passive income grow through interest earnings while keeping your funds accessible and low-risk.

7. Royalties When you create something like a book, music, software, or patent and then license it to others, you'll earn royalties. These are payments made each time your work is used or sold, giving you a nice source of passive income.

8. Blogging When you start a blog, you'll be writing about a topic you love and sharing your knowledge with others. As your blog gains traction, you can monetize it through ads, sponsored content, or affiliate marketing. It will take some time to build an audience, but a successful blog can provide a solid source of passive income. I started a Canadian personal finance blog several years ago that generates passive income for me.

9. Annuties-are financial products from insurance companies that guarantee you a stream of income for a certain period or even for life. You can buy annuities with a lump-sum payment or a series of payments and choose between immediate or deferred options based on your needs.

10. Exchange Traded Funds (ETFs) are investment funds with a mix of stocks, bonds, or other assets. They trade on stock exchanges just like regular stocks. By investing in ETFs, you can easily diversify your portfolio and earn passive income through dividends and potential capital appreciation.

11. Robo-AdvisorsThese automated investment platforms use algorithms to build and manage a diversified portfolio for you based on your risk tolerance and financial goals. By investing with a robo-advisor, you'll earn passive income through dividends, interest, and capital appreciation while benefiting from professional portfolio management and low fees.

12. Vending Machines -If you own and operate vending machines, you'll buy or lease machines, stock them with products, and take care of maintenance. As people purchase items from your machines, you'll earn passive income from the sales.

13. Youtube Channel- Starting a YouTube channel means creating and sharing videos on a topic you're passionate about. As your channel gains viewers and subscribers, you can monetize it through ads, sponsorships, or even affiliate marketing. It takes time and effort to grow, but a successful YouTube channel can generate a nice stream of passive income. I have a small YouTube channel that is still generating revenue on videos I made years ago.

14. Stock Photography and Videography - If you have a talent for photography or videography, you can sell your images or footage on stock photo and video platforms. Each time someone downloads or purchases your work, you'll earn royalties, creating a passive income stream. It may require an initial effort to build your portfolio, but as your collection grows, so does your earning potential.

Currently, I possess the following revenue streams, do note, that I do not characterize them as passive, as they all involved effort (some more than others) to create and maintain.

1. Dividend Stocks and ETFs- I hold this as part of my traditional asset portfolio in blue chip and tech-based companies. They provide readily reliable dividends that I use either to re-invest (called a DRIP,- which I discuss more in my intermediate course, or to pay brokerage fees)

2. Bonds and Fixed Income Instruments- Almost for the exact same reasons as dividend stocks and they ‘traditionally’ serve as a counterbalance of risk that stock (equities) provide. However, 2022 was not a great year for bonds as they lost value in tandem with most equities.

3. Rental Properties- traditional long-term tenant rental properties provide me with a certain monthly income that I use to offset the expenses of owning a home. I do also run a short-term rental, through Airbnb that provides me with irregular income (seasonally dependent).

4. Affiliate Marketing- yes! Through this platform, I have been able to receive monetary compensation for referrals to certain products/services (only companies I have a relationship with). These funds are used to offset the online costs of running this business (i.e hosting/domain fees) with the remainder being donated to charity at year’s end.

5. Online Business- ta-da, this is precisely what I am doing now. Whether it be offering recorded courses, through Embodia, or live in person courses and strategy calls, this avenue allows me an active revenue stream outside of the clinic.

6. High-Interest Savings Account: this is where I park my emergency fund, it does offer a small nominal return ( a negative real return considering inflation).

7. Stock Options Trading- through ThetaTrading Co, this active revenue stream allows me to earn a modest, variable income irrespective of my location.

8. Creating Digital Products- My Beginner and Intermediate Course E-Bundles are great examples of this. Highly variable sources of income but nonetheless, a stream of income (after my initial time investment in creating and maintaining them) provides me with residual income.

9. Private/Peer-to-Peer Lending: Another concept I discuss in the intermediate course. Acting like the bank, I lend out capital and earn a monthly rate of return on that

These are two other ‘passive revenue streams’ I’m looking to pursue:

1. Royalties: Through a company called Royalty Exchange, you can purchase the rights to assets and sit back and collect the residual revenues from them.

2. Vending/ATM Machines: Through a company called ATM Together, owned by Paul Alex Espinoza, you can purchase physical ATMs and position them in desirable locations to derive residual income from them.