Automating Passive Income

In The Passive-preneure I talk a lot about automation, and you’d know that if you’d picked up your extremely inexpensive copy today. One of the ways I’ve gone about automating my own passive income streams is by using one to fund another, automatically. I’ve discussed ShareBuilder in the past, and how I utilize their automatic investing options to “set and forget” my investing plan. Well, I also utilize their direct deposit option to help this along.

In my Kindle Direct account I have directed all income to my ShareBuilder account VIA direct deposit. This lets me move all my money into investing, and never have to worry about accidentally spending it. Then, once the threshold is reached my automatic investments kick in. Then I’m able to keep track, and get my dividend reinvestments from these. Thus, one passive income stream (my eBooks) funds another passive income stream (my Dividend investing) which I’m also utilizing to build up the capital to purchase yet another passive income stream (my rental properties).

You can see from this that it’s a domino effect, and if you have multiple streams, such as eBooks and membership fees on a website, for instance, you can direct multiple streams into the same account, and build those streams faster. Turning them from a passive stream, to a passive river.

Pictured: Your income

Pictured: Your income

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The Passive-preneure Released

The Passive-preneur

The Passive-preneur

The Passive-preneure was released today, and will soon be available world wide (only in English) on Kindle. It’s priced at $2.99, and is easily worth every penny. We’ve discussed what it is in the past, but basically it’s an indepth look at passive income, and how to make a living using it. It’s no-nonsense, and no bullshit, you’re not going to “get rich quick” or “make millions online in just 6 short weeks” because those are called scams, and they don’t work.

No, what The Passive-preneure does is teach you the true, sustainable, methods of making money both on and off line, in a passive way. It shows you some methods, and gives you an idea of how risky or difficult they are to setup. If you’ve ever considered making money passively, you need this book. So go, now, go buy it. I’ll wait.

Pick Up Your Copy of The Passive-preneure on Amazon right now!

Drop Shipping and eBay

If you know anything about eBay, you’ve probably heard about drop shipping. If not, you’re about to. Drop shipping seems like such a simple thing to do, because it’s literally being a middle man. You take the money from the buyer, and you pay the warehouse, and they ship the product to the buyer. You never have to handle the merchandise yourself, and make a profit for your time.

If you haven’t guessed it yet, this can be automated, and I’ve covered this in The Passive-preneur, so I’m not talking too deep about it here. What I’m going to talk about here is my own experiences with eBay and drop shipping.

It’s not easy. Let’s get that out of the way right at the start. You can’t just assume you’re going to post a bunch of items and make a lot of sales. Because it doesn’t happen. I’ve sold some items, but I’ve never invested the time or money into the marketing side of things, and thus have not made anywhere near enough money to say that it’s been worth my time. That said, I know there is the potential for me to. I just haven’t had the need to do it, or the desire. I like to play around with different types of passive income streams, but I only invest in ones I want to have an investment in.

That said, I’m considering investing in drop shipping. I’ve started focusing a bit on a particular niche: Security and Surveillance, because the gadgets are cool, and it fills an actual need in the world. I like to make people feel secure, and safe, so this particular niche suits me. If I don’t make money, that’s fine, because I’ve not spent a ton of money on it ($0.80 currently in listing fees) but if I do make money on it, I might use some of that money to hire a virtual assistant to help me with the process.

I use a drop shipping company that allows you to insert excel spreadsheets of orders and will mass purchase the orders for you. This allows me the ability to hire a virtual assistant to compile these sheets for me, and list new items for me. I could also then put them in charge of a small budget for advertising, and if business became good enough possibly even a small website store. The possibilities are there, but the idea is to focus on a single niche, begin on eBay, build my reputation there, and use that social capital that I build up on eBay to build credibility into my own website, as well as eBay. Once I’m running my own website, I can not only remove part of the VA’s job by automatically compiling the excel files VIA website code, but I can also integrate with my drop shippers API system and automatically place orders.

This allows for automation, but it is not cheap. The API costs money, and I’m not ready to invest in it until I know I have a steady customer base.

This is why you’ll find in The Passive-preneure that I don’t discuss passive income as some get rich quick scheme. That’s bullshit. Passive income isn’t for the feint of heart, and if you think you’re going to jump out of the gate with a million dollars in a year, you’ve been sorely misled.

Stay tuned to see how this little venture works. I’m not investing a lot of time into it just now, but I’ll keep you posted.

New Book: The Passive-preneur

The Passive-preneur

The Passive-preneur

 

The Passive-preneur is set to release later this month. I’m finishing up edits, and waiting for responses from people whom I’ve sent emails to, but if all goes well you’ll be seeing it on Amazon by the end of February. I’ve consolidated a lot of knowledge into this book.

Basically it’s a book explaining different types of passive income in detail, rating each. It also explains exactly what a Passive-preneur is, which I’ve touched on in the past, but felt it needed further explanation in book-form. If you ever intend to make money passively, you need to read this book. It will help you get through the haze of starry eyes, and get your shit straight, so you’re prepared for the reality that is the Passive-preneur lifestyle.

You’ll be able to find the book on Amazon, and potentially other marketplaces, before I’m finished. But for now, keep an eye out here and on the Books page.

Alternate Forms of Investing

On average my dividend paying stocks return a yield of around 6%. In plain English, that means for every dollar I invest in, I earn $0.06 per year. Sounds like a lot, but there are a few things you don’t think of. First and foremost, stock price changes. So if price goes up, value goes up, if price goes down, value goes down, so I never know exactly what the return is, unless I want to sit down and do the math.

Ain't nobody got time fo dat

Yea…what she said

I’ve started looking out for different ways to invest my hard earned cash. First I swung by the race track, and quickly realized that doesn’t work. The next step was a guy named Tony out behind a bar, but his eyes were just a bit too red and twitchy for me to trust my cash with him.

Then I looked at Kiva, again. Kiva is a great program, and if you’re the altruistic type, like I am, you should sign up and join the Capitalist Cares Kiva Team. Together we can help many, many, people. But the thing is, you won’t be making a return on your investment. So, it’s more of a donation that you end up getting paid back. Which is great, don’t get me wrong, because I can drop some spare cash into the account, send it out into the world, help people out, and get it back to help someone else. That’s fine.

But I want investments. But looking at Kiva, I knew I had Microplace that I could fall back on. Or, so I thought. Turns out Microplace stopped doing new investments in January.

You and me both...

You and me both…

So what was I supposed to do? No interest from Kiva, no Microplace to fall back on…of course I went to Google. You know me too well, digital reader. You little scamp.

So I hit Google with the very narrow search “microlending platforms” and, of course, it returned a gazillion results that meant absolutely nothing to me. So I hit it again with the better term “microlending platforms that will make me a millionare” and Google laughed at me. Audibly. Through the speakers. (This may be an exaggeration.)

I eventually stumbled across LendingClub.com, which, obviously I wouldn’t be allowed to join, because Maine is run by a fucking idiot. But when I stumbled across that, I also found Prosper.com[?], which I did a little research on, and it is a microlending platform that allows you to purchase portions of debt, or notes, from borrowers. They even have a trading platform which lets you trade said notes with other lenders. All this for the minimum investment of $25. Sounds a lot like Kiva to me.

Squirrel-lelujah!

Squirrel-lelujah!

So I’ve got an account all setup now, and I’m waiting to get my account verified so I can deposit some cash and get to investing. I’ll let you know how it works. If it does work, though, the yields are promising. They narrow down each account type by it’s risk, with the lowest risk having lowest reward, highest risking having highest reward. Lowest risk also has the lowest rate of default, with highest risk obviously having the highest rate of default.

I think I’ve found the sweet spot right in the middle, though. Their yield after expenses and defaults for their C rating (ratings are AA, A, B, C, D, E, and HR) was around 11%. Which is much higher than that money would be making in dividend paying stocks. Don’t get me wrong, I’m not replacing my stocks with this, but I might use it as an alternative, possibly take a portion of the money that I would be investing and deposit it to my Prosper account, and see how that works.

For now, though, I’m risking $25, and seeing how the entire process works from start to finish.

Another note, just for some transparency, I’ve also signed up to become a Prosper affiliate. I’ve not yet been approved, but if I do get approved, and I fall in love with the service, you can be sure that there will be a link to click, a link that will let you sign up for them, and give me some money for the trouble. Don’t worry, if I don’t care for the system, or find it too risky to suggest, you will not see that link. That is my promise to you.

Make George Washington Work For You

If you work, you most likely get a tax return. If not, I feel sorry for you, now go stand in the corner and feel shunned.

Kidding.

Anyway, what I’m doing this year with my tax return is this: Making it work for me. I worked my ass off for that tax return, and now I’m going to give it the same treatment it gave me. Hard work, and a bit of flogging.

I’ve taken $1,000 of my return and sent it up to my stock portfolio. That’s about 10 times the amount I invest on a normal basis, but that’s the point. Investing is long term. Which means, if you’re doing it a little at a time, even fucking longer. I love it though. I love to watch the little numbers go from little numbers to big numbers, growing up and spitting out little numbers of their own.

Yes…I did just refer to my dividend paying stocks like they were children. And that’s how I treat them. I watch over them, I make sure they’re growing and doing the things they should, and I guide them as needed, but for the most part I let them do what they do, and live their own lives.

You can expect that this month’s portfolio evaluation will be greatly in the negatives, but don’t let that fool you. Negatives are fine. Negatives below cost-basis are not. And that’s the idea.

What’s cost-basis you ask, oh digital reader who I can apparently hear?

Cost basis is the price that you paid for those stocks. Meaning, if you dropped $1,000 on stocks, your cost basis is $1,000. Now, if you’re smart like me (which you are, because you’re here) you know that you need to also figure in commission. So, for this $1,000 investment I’m losing $4 per trade, on 4 trades that totals $16. But the total amount I’m spending is $1,000 for that cost-basis, meaning only $986 of it is going towards actual shares of stock.

So if you decide to go ahead and use the Capitalist Cares Stock Portfolio as your way of tracking stocks, you’ll need to know a few things. When you look at cell B3, you’ll see it’s labeled Portfolio Profit. You might believe that’s simple cost basis with current value subtracted. That is not the case. That is all expenses subtracted from Current Portfolio Value. By all expenses, I mean I include future expenses into it. The value there is the dollar amount that I would have as profit if I were to sell every share that I owned at the current prices without any change. It sounds hard to calculate, but really all I did was add the sell commission to the cost basis. I did that by subtracting that from the value for each row. You can see that figured in on the F row. The part of the formula that reads “- $E$2” is the defining calculation for removing the sale commission.

This post has gotten a bit long and boring. So here is a picture of a cow. Because, you know…cow.

Moo, bitches...

Moo, bitches…

Improving Revenue (and profits) for Rental Properties

Quick: Think of one way to increase revenue for a rental property.

If you thought of increasing rent, you’re not alone. I was the same way until I started digging deep into the subject. Increasing rent is the easiest thing to consider, but it’s definitely not the easiest thing to do! For instance, your rental, no matter how great it is, only has a set value, and even though real estate prices are going up, rental values are not following that trend! Which makes the entire process of purchasing rental properties a lot harder.

So what do I do?

You have to change the way you think! Before I got into thinking this way, I was among the majority. When I thought revenue, I thought it was a synonym for rent. It’s not! Revenue is simply the amount of money that your rental property brings in.

But isn’t that the rent?

If you’re allowing your rental property to go untapped, than I suppose for you it is.

…I’ll just pause here and let that sink in…

Ok! So, what’s happening is this: You’re focusing on the stigma of being a landlord, and letting a ton of money go untapped because you’re not thinking like a Passive-preneur. Yes, you are technically a landlord, but does that mean you also cannot be a power company?

Wait… What?

Solar power is quickly becoming a fascinating–and cheaper–alternative to grid-based power. It’s so good, in fact, that if you install it into your rental property, and then change you rentals so that you’re charging for utilities, you can become a private power company! And the best part is most power companies will actually pay you to stay on the grid!

Why would they do that?

Because power companies have a lot of things in abundance: Influence. Access. Money.

You notice the one thing I didn’t include in that list? POWER!

Power companies are in constant need of new, and increasingly cleaner, sources of power! So they’re willing to pay you to stick your property onto the grid after having panels attached, and any excess power you generate that you don’t use, will earn you a paycheck from most power companies. (Obviously you’ll want to contact them before making the investment, but it never hurts to ask, right?)

Benefits of this

Go back to thinking for me. Now, let me set the scene for you. You’re in middle of summer. Your tenants lease is coming up, and they’ve made it clear they don’t intend to renew. You advertise, but no one seems interested. Suddenly your property is vacant.

Now, someone not versed in the industry might think here, “So what, it’s vacant. Not like it’s costing you money!” and then give themselves a hearty pat on the back, and presumably walk into a bar for a celebratory drink for being so intelligent.

Those of us that know, understand that vacant properties have all kinds of expenses, including but not limited to just the taxes alone!

If you’re attached to the grid, and generating solar power, that doesn’t end when your tenant leaves, it simply sends more to the grid!

And if you passed elementary math class, you’ll pick up on that. Yes, you won’t be making as much from the grid sale as you would charging for rent, but it just might be enough to make that vacant property be a break-even property, instead of a debit property!

Any more ideas?

I have a ton of ideas, but you’ll have to wait for the eBook for the rest of them! It’s not quite finished yet, but I’ll be making a few posts here and there about it. If you don’t want that, but you’re still interested, you can shoot over to AmericanVillageManager.com and join the mailing list to be notified when the website launches, and also receive periodic email hints on this very topic!

I give very exclusive information to my mailing list, and only email when I have something useful for you, so get on that list, and get your rental properties paying you, even when the tenants don’t!