1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Passive Income

Discussion in 'Skills, Business and Finance' started by BurtMeister3000, May 30, 2016.

  1. BurtMeister3000

    BurtMeister3000 Staff Member

    Joined:
    Dec 1, 2015
    Messages:
    1,618
    Trophy Points:
    113
    Location:
    Where the eye can't see.
    So, I don't know how many out there are like me, feel like you can work all the hours God sends + overtime and still struggle to squirrel away funds for rainy days and to put toward things like buying a house, a car or whatever you want to do. I was thinking about this earlier and have done many times, but haven't yet implemented my master plans. So I was tinkering around Google and came across this article..

    http://www.forbes.com/sites/laurash...-top-tips-from-expert-pat-flynn/#7ac32ad310a8

    Whilst I know most of the get rich quick sites are scams, I would like to try and set up some sort of passive income to take the pressure off bills and create a little extra cash when I have no work.

    Anyone have any plans or is anyone already doing something like this?
     
    Mebs and Party like this.
  2. Party

    Party Well-Known Member

    Joined:
    Mar 9, 2016
    Messages:
    537
    Trophy Points:
    103
    Location:
    Always under cloudy skies
    Well, all I can advise is live below your means. Like if you can afford a $400 car payment, buy something cheaper for a $300 payment, and PAY yourself the difference. What do I mean by that? It's an old theory , pay yourself first, and invest it. IRA s first off. I owed $12.000 in income taxes this year, so we opened two 6,000 IRAs and our tax debt dropped to $4000. After state taxes ,,another $2000. We basically doubled our money, instead of owing 12 g's, we paid 6, don't know any get rich quick scheme that can offer those no risk returns?

    Any other advise, Dividends. Get paid to wait.
     
    BurtMeister3000 and Mebs like this.
  3. Corvid

    Corvid Active Member

    Joined:
    Feb 8, 2016
    Messages:
    305
    Trophy Points:
    103
    Like Party says, make your system efficient first. A person should examine how they're spending money first and see if there's anything that can be tightened up.
    • Buy second hand as often as possible - cars, equipment, books, even clothes etc.
    • Take care of all possessions. Don't abuse equipment and appliances. Buy things with long warranties and cheap, available parts. Repair things, make them last. Always change the oil regularly in the car.
    • Avoid big debt. It's essentially a person buying things they can't afford with money they don't have, plus there's interest. Debt is fine if getting a larger long term financial return that the initial debt and the interest.
    • Avoid status purchases and spending, especially if in a relationship.
    • Eat out less often, eat in delis less often. Used to spend €50 a week on lunches in shops when working. Making lunches at home could save €2000 per year, or more. Go to Aldi or Lidl, and shop in local greengrocers. I eat very well for about €40 a week. This could be reduced further, it's possible to get food for free, and a person could grow some food.
    • Compost organic rubbish and use recycling centres. Saves a few hundred quid every year. Bin rates are up a lot in this country.
    • Don't drive a gas guzzler with expensive running costs.
    • Watch your home heating costs. A central heating upgrade might be worth the money. Insulate your house. Draftproof doors and windows. Use thick curtains. Keep internal doors closed. Wear thermal clothing in winter. Keep a close eye on your spouse and the thermostat, some people love light clothing and warm houses in winter, particularly if someone else foots the bill.
    • Don't waste electricity.
    Passive incomes
    Property is one of the best ways to make money while doing very little. Property makes money whether you're there or not. Rent out rooms in your home if you area a homeowner. Rent a reasonable house, live there and sublet rooms. At the very least, your own rent will be paid by other people and your bills will be shared and therefore much lower. If you own your own property and can get money, build a granny flat extension, put in a garden room and rent it out. It will bring in a nice bit per week if you're in an urban area with local jobs and colleges. Spouses may make this difficult, so it depends on your situation. There's a tax exemption of €12,000 per annum in this country on renting out rooms in your primary residence.

    Scrapping vehicles for parts can make a big return if you know what you're at and you've got the space to keep a few cars. Cars sit on your land doing nothing, you advertise scrap parts and other people will come to you and gut the cars paying you money for parts. Alternatively, you might be able to gut the cars for the most valuable parts at a friend's garage, keep them in your shed and a recycling centre will still give you a few hundred for the vehicle carcass when you're done. Crashed luxury cars like BMWs have a high return on scrap. The parts are expensive, so many BMW owners buy scrap. For example, alloy wheels alone from a scrap car could fetch €200 - €500. An engine might get €500. Seats, €100 - €250. Turbo - €100. Lights, bumpers, paneling, ECUs, doors, windscreens and windows, electrics and switching, also sell well. Old, rare vehicle types that are still in use have a big scrap parts following, like some old diesel 4x4s.

    There are all kinds of ways to make money online, but these are often not as passive as they look. They're rather active ways to make money for the most part. Some methods have a good return, others do not. Have read up on a few such as writing content, making a youtube channel, facilitating online advertising etc. These all require work though.

    That's a few I use and some I know of. Might help someone make a start.
     
    Last edited: May 30, 2016
    Party, BurtMeister3000 and Mebs like this.
  4. Mebs

    Mebs Active Member

    Joined:
    Dec 1, 2015
    Messages:
    1,217
    Trophy Points:
    123
    I have done a lot of research of on-line methods to earn income and while there are quite a few different routes, none of them are really passive. They involve long hours doing work, whether it is taking on-line tests, writing articles or doing other work. There are options of doing work on-line, is this what you meant or do you want to keep it strictly to passive ways of earning money?

    p.s. great topic for a thread, I know we had the ways to save money thread, but a passive income thread might be useful as I think most of us have spoken about this topic before and it is always good getting money for doing nothing :)
     
    BurtMeister3000 likes this.
  5. BurtMeister3000

    BurtMeister3000 Staff Member

    Joined:
    Dec 1, 2015
    Messages:
    1,618
    Trophy Points:
    113
    Location:
    Where the eye can't see.
    Thanks for the input gents.

    Party I'm not entirely sure what an IRA is, but I googled and it said about some retirement fund. Does this sound right? Sounds like you made some smart plays with your funds there though, good work!

    Good savings tips Corvid and also good ideas!

    Yes mebs, I get that most will not be completely passive, but like the article the blogger made huge efforts to begin and kind take his foot off the gas after a while and his efforts appeared to sell themselves.

    I was thinking of an idea. I remember that Martin Lewis guy from money saving expert talking about transferring any bad debt to credit cards with 0% interest for the first year and 0% balance transfer to stop only paying back the interest and never getting rid of the amount owed.

    Anyway, I was thinking what if you took out two credit cards paid an amount from one of them into a high yield savings account that had good yearly returns and pay back the balance of the one card with the other card until you got the interest at the end of the year and then paid back the original amount (keeping the interest) or just kept it going for another year or so.

    Having the two cards would mean you are paying back any balance owed on the other before the end of the month to prevent charges whilst your interest accumulates in your savings account. The repayments from one card to the other would be staggered, say one cad would be paying back the other every two weeks. This might work even better with three cards paying each other off so the banks don't catch on?

    The only draw back is low returns in interest rates in savings accounts. You would have to take out a rather large amount on the credit cards to be able to deposit it in the savings account to make it worthwhile, the larger the better and would be made even simpler if you could set up standing orders on those credit cards to pay each other off before the end of the month. Also I imagine if this worked it would be a rock solid way to build your credit scores and you could eventually take out larger credit and gain bigger interest on the money you invest in your savings acccount.

    Anyway, this is just a theory I came up with and I'm sure you guys might find some holes in it? Please shoot away!
     
  6. Tow1994

    Tow1994 Well-Known Member

    Joined:
    Mar 3, 2016
    Messages:
    125
    Trophy Points:
    53
    Everytime I see "passive income" I immediately think about creating phishing mails and sites. Nowadays that's the real deal :D That's the black hat in me^^
     
    BurtMeister3000 likes this.
  7. Mebs

    Mebs Active Member

    Joined:
    Dec 1, 2015
    Messages:
    1,217
    Trophy Points:
    123
    I think your idea is a little mad to be honest Burty! Do you realise the abysmal rates of interest the banks pay back on savings accounts? In Ireland they are typically gone down to around 1% to 1.5% nowadays, AT BEST. Bear in mind there is tax on interest of 40%. So for every €10,000 you save you are getting back a measly €60. Hardly going to be going to Vegas any time soon on that. Also, you are hedging your bets and playing two banks if you are getting a lend from one bank to pay back the other. You are chasing your tail by constantly remembering when you have to pay one back and when you have to withdraw from the other. Missing payments and getting charged to fuck on your repayments then is an inevitability. Also, to my knowledge, credit cards would never let you take out vast sums of money to begin with. Definitely not in the region on €10,000+. The banks would definitely smell something fishy was going on and at best they would flag your accounts, making you a suspicious customer for the rest of your life with the bank. And at worst you could be blacklisted from both banks and any chance of getting loans or credit with them again.

    Now these are just a few of the downsides to your idea before even looking up the ins-and-outs of it.
     
    BurtMeister3000 likes this.
  8. BurtMeister3000

    BurtMeister3000 Staff Member

    Joined:
    Dec 1, 2015
    Messages:
    1,618
    Trophy Points:
    113
    Location:
    Where the eye can't see.
    I dunno if they could do anything if they found out what you were doing, it isn't illegal. Also, the interest rates here are a little better, I think average is around 3%- 3.5% or thereabouts. I did do a check before I wrote the article and it is possible to get £100,000 on a credit card. as for the forgetting to pay thing, that was why I suggested setting up standing orders, so you wouldn't have to. If something went wrong with one of the payments, you could always close your savings account and pay back the original amount and you shouldn't be any better or worse off.

    I might consider this, if for no other reason than to build up my credit score. If you have a history of paying back, you are considered a better risk. As Martin Lewis says "debt isn't bad, bad debt is bad".

    I'm not actually sure there is that much risk if you are doing nothing illegal and making payments before the end of the month. I think if you can make the system work for you instead of you working for the system, you should!
     
    Mebs likes this.
  9. Mebs

    Mebs Active Member

    Joined:
    Dec 1, 2015
    Messages:
    1,217
    Trophy Points:
    123
    Good luck man, but personally I would avoid a scheme like this like the plague.
     
    BurtMeister3000 likes this.
  10. BurtMeister3000

    BurtMeister3000 Staff Member

    Joined:
    Dec 1, 2015
    Messages:
    1,618
    Trophy Points:
    113
    Location:
    Where the eye can't see.
    It was something I just thought up, no scheme.