7 Ways to Make Passive Income (Even If You Have a Full-Time Job)

If you're working 40 plus hours a week and you don't feel wealthy on your salary, you're not alone. Being wealthy means you have some sort of financial freedom, but that's impossible if you're relying on a salary where you have to go into work to get paid. What happens if your company fired you tomorrow? How would you pay your bills? What happens if you broke your leg and you couldn't go into work for a little while? How would you eat? And what happens if you want to go and travel the world for two months? How are you going to keep paying your mortgage while you pay for hotels at the same time? This is where creating new streams of cashflow or passive income can be very valuable. And in this video, I'm going to show you seven ways that you can do it. And I'm going to start with the most difficult, which is number one, investing in rental real estate. And the way that this works is you're going to go out and you're going to buy a property. Now, you're not going to buy this property to live in yourself. You're going to buy a property that you can rent out to other people. So let's assume that you go out and you buy this house on sale for, let's call it $200,000. Now you might say, well, Jaspreet, where in the world am I going to find a $200,000 property? Look outside of where you're living right now. My office is in downtown Detroit. If you look around Metro Detroit, you will find these types of properties all day and night long. Now, if I go out and buy this $200,000 property in a decent area that is growing, I'll be able to rent this out for, let's call it $2,000 a month. By the way, you don't need all $200,000 to go out and buy this property. Stick with me for a minute. So rent this out for $2,000 a month. This now tenant is living in my property. They're paying me rent, but I got expenses to pay. You got to pay your property taxes. You got to pay your insurance. You got to pay your maintenance costs because sometimes a sink is going to break. Sometimes the window's going to break. You got to pay for your management fees because remember, I want this to be as passive for you as possible. When I buy rental properties, I don't manage them myself. My tenants don't know me. I don't know my tenants because they have a who does all the day-to-day stuff. And then sometimes there are going to be vacancy costs. And that vacancy cost, I don't want to be paying for out of my pocket. Now, all these expenses might cost me, let's call it $1,000 a month, which leaves me with a net of $1,000 a month of net income. Now, right now, I'm assuming that I bought this property all cash. If I got a mortgage to buy this property, this is where now I'm going to pay money for my mortgage out of this. But for the purposes of this video, let's assume that I bought this property all cash just to keep it simple. This is the money that I get for owning this property. Notice the difference. When I go out and buy a house, I have to pay money to live in the house. I still got to pay the same expenses. I got to pay for my property taxes, my insurance, my maintenance fees, but then I have to go to work to make those payments. Here, I'm making this money even if I'm not working. If I'm on vacation, my tenants are still paying me. If I'm at work, my tenants are still paying me. If I'm sleeping, my tenants still got to pay me. So now you can create a new stream of income that you get for just owning the asset and renting it out. Here's the tricky part. A lot of people like to explain real estate as this amazing passive income source, but it is a pain in the butt to get started. It took me a while to finally understand how to do this properly. I read a lot of real estate books and you can do the same, but the reality is getting started is going to take work. You got to find the right contractors. You got to find the right realtors. You got to find the right property managers. You got to learn how to deal with the city. I mean, you have to learn all the ins and outs of how it works, but once you understand it, well, then it becomes very simple because in the beginning, it was a lot of work and a lot of headache trying to figure out how to manage these deals. Now, when I find a property I like, I'll buy it and I'll hand over the keys to the property manager, and then I don't really hear about it. I have a quarterly meeting with my property manager. I also review the reports every month, but I have a quarterly meeting with them and we go over all the financials, make sure everything is looking correct, and that's pretty much it. It takes time to get there, but it can create a new stream of income for you if you are willing to go through that work, but it's not for everybody. This brings us to number two, investing in real estate without operating it. Some of you are going to say, Jaspreet, I really like this idea of investing in real estate, but either, A, that sounds like way too much work, or B, that sounds like way too much money, and I just don't have the ability to do that. Well, this is where you can invest in real estate without actually operating yourself, and there's a few ways that you can go by doing this. I'm going to discuss investing in syndicate real estate deals, investing in crowdfunded real estate deals, and then investing in REIT, Real Estate Investment Trusts, starting with a syndicate deal. If you go to a real estate investor conference in your area, which they happen all around the country, in fact, all around the world, a lot of times they'll be free. Sometimes you have to pay a little bit of money to get in, but these real estate conferences have investors coming to these conferences, and every time you go to this conference, there will always be investors that are looking for money to help fund their next deal. They might be developers. They might be investors. They might be some rehabbers. These are people that need money to do some sort of real estate deal, and you can come in and give them some money. You don't need to fund the entire real estate deal. You can fund a fraction of the deal, and in exchange of you giving them the money, they give you a piece of ownership in the property. You don't have a say in the day-to-day stuff. You're not really somebody who's operating it, but you give them the money, and then you get your share of the return. Maybe they'll pay you with cash flow if that's the intention of the goal, or if they're trying to sell the property, you'll get your share of the profits, again, if there are any. Investing is risky. You're never guaranteed to make money when you invest. In fact, you will lose money at some point, so make sure you always do your own due diligence and never blindly trust a random guy on YouTube, but this is what syndicate real estate is. A syndicate real estate deal is you are investing in somebody else's deal. You give them a little bit of money, sometimes a lot of bit of money, and in exchange, you don't got to manage the property. They're doing the legwork. Then we have crowdfunded real estate deals. This is similar to syndicate, but crowdfunded deals are a little bit more passive. There are platforms on the internet that allow you to invest sometimes as little as $10, sometimes as little as $100 or $1,000 into a fund of real estate or into something that gives you exposure into a fund of real estate. Now, again, you get your share of appreciation. You'll get your share of cash flow, and you don't have to do any of the physical work. If this type of real estate crowdfunding is interesting to you, you could check out one of our sponsors and affiliates that I have worked with in the past. I have their link for you down in the description under the recommended section. And then we have REITs. A REIT is a real estate investment trust. This is a way for you to get exposure to real estate directly on the stock market. And the way that this works is you are investing in a company that invests in real estate. So you're not exactly getting exposure to the real estate. You're buying the company that's holding the real estate. Now, some people like investing in REITs because REITs are required to follow what's called the 90% rule, which means the real estate investment company, the REIT, is required to pay out 90% of their taxable income, meaning their profits, in the form of dividends, meaning they're generally paying out higher forms of cash flow, higher dividends, and other stocks, just because of the 90% rule. But again, this is a much simpler way if you just want to get some exposure to real estate without having to worry about operating real estate. So with all three of these, you don't have to operate the real estate. This gets you closest to the real estate deal. This gets you next closest. This REIT gets you exposure to the company that's investing in the real estate. But now, this is a bunch of ways you can invest in real estate, which brings us to number three, dividend paying stocks. Now, if you've been keeping up with Market Briefs, which is my free financial newsletter for investors, where every day, my team is breaking down what's happening in the financial markets into a quick five-minute read. We have hundreds of thousands of investors that are reading Market Briefs every day. And if you join Market Briefs, you'll also get access to our free masterclass on investing your money. So if you want to join for free, all you got to do is click the link below to sign up. But now, when you start to look at what's happening in the financial markets, like you see with Market Briefs, you'll start to see a lot of different types of companies which trade on the stock market. But what is the big difference? Let's talk about this now. What's the difference between a company like Uber and AT&T? Now, you might say, well, Uber is involved in the rideshare business and AT&T is involved in this telecommunication business and all these other things. But if we dig a little bit deeper as an investor, the reason why these two companies are very different is Uber is in the business of taking their cash and reinvesting all of their money back into the company. They're still in that growth phase versus AT&T is in the business of taking their extra cash and giving it away to the shareholders. AT&T is in the dividend phase, which means when you invest in AT&T, you will get dividend income. When you invest in Uber, you will not. Why? There are two different phases of their business model. Now, I'm not saying one's a better investment or not. You have to understand the game that we can find the right investment for you. The way a dividend works is some companies, for example, AT&T, for example, McDonald's, these companies have been established and they're making big profits. They have billions of dollars of extra cash at the end of the year. Now, there's three things they can do with that cash. They can save some of this cash for an emergency. They can reinvest this cash back into the business to hire more employees, invest it in research, or they can take some of this cash and just give it away to their shareholders. Their shareholders are regular people like you that invest in the company. When you buy one share of AT&T, you become one of the owners of AT&T and you get paid dividends in proportion to how many shares that you own, meaning the more shares you own, the more dividends that you get. Well, when you invest in dividend paying companies, these are companies that are making those big profits and they're giving it away to shareholders. This is all public information. So, you can invest in dividend paying stocks as a way to create more cash flow. Now, you have to the game. Right now, AT&T is paying around 4% a year in dividend income at the time of me recording this video, which means if you invested $100,000 today into AT&T, you're making $4,000 a year in cash flow that you don't have to actually work for. Now, you might say, Jaspreet, that's a lot of money you got to invest for not that much money out. But you got to know the game. The game here is not investing all of your money today and then hoping that it's going to make you rich tomorrow. It's slow, steady, consistent investments week after week after week, month after month after month, year after year after year. Because when you invest your money into a good stock, what happens is, number one, the stock price goes up. So, your investment value is growing because you invested into a good company. Number two, because the company is growing, they're making more profits, they also pay you more dividends. That means the stocks that you bought three years ago are paying you a lot more dividends today while you continue to accumulate more shares. So, the way that you really become wealthy as a dividend investor is not to just invest a ton of money one time. It's to slowly, steadily, consistently keep investing your money. That way, you can continue building this machine that will keep spitting more money out at you because you stayed consistent at buying more of that money printing dividend machine. But there's a risk here because the risk here is if you invest your money into AT&T and you do this for years and decades, is that AT&T then goes bankrupt. Now, not only do you lose all the money that you invested, you lose all the gains that you thought you had, but you also lost all the dividends, which is why if you're investing in individual stocks, it comes with more risk. You have to understand that and accept that and put in the more work to keep up with the company if you're because the alternative is number four, investing in dividend-paying funds. Again, I can't tell you what to invest and I'm just giving you hypotheticals here, but a few examples of dividend-paying funds are SCHD, VYM, I'm personally invested in both of these, and NOBL. But look at how this works. With SCHD, this is an ETF created by Charles Schwab. VYM is an ETF created by Vanguard. An ETF is a fund. It's an exchange-traded fund, but all it is, it's a basket of stocks. And these two funds are investing in high-dividend-paying companies inside of the United States. So now, instead of investing in one stock, you can invest in one fund, which gives the exposure to dozens or hundreds and sometimes thousands of stocks. In this case, we're talking about dividend-paying stocks, particularly if your goal is cash flow. So now, instead of trying to find the perfect company, you find a fund that you want to invest in. That way, now, if one company goes bankrupt, it's balanced out by all the other winners that are in the fund. Now, you don't have to worry about trying to manage the company, trying to find the perfect company and keep up with the company. So it's a very different game. Or you can start to get a little bit more niche. For example, NOBL invests in S&P 500 dividend aristocrats, which means it invests in S&P 500 companies, which are the 500 largest companies in the stock market. But then it adds a qualifier, S&P 500 dividends, meaning dividend-paying companies in the S&P 500. So you're one of the 500 largest companies that is paying a dividend. But then it says one more thing, dividend aristocrats. A dividend aristocrat is a company that has paid out and increased their dividend every year for at least the last 25 years. That's the companies that this is investing in. So if you want to invest in those more security, those more safe, those more proven dividend-paying companies that have been around for a long time and paid dividends and increased their dividends every year for a long time, this can give you exposure to that. Then we have number five, lending your money out. And for full transparency, I don't have a ton of experience here. Most of my experience in lending has to do with selling a real estate property on a land contract, meaning extending a note, a loan, to somebody buying one of my properties. But the way lending works is your bro cousin Bunty, or somebody a little bit more financially sophisticated, wants to buy something, but they don't have the money to buy it. You can lend them the money, and in exchange, they pay you interest. So you essentially become the bank, but you can't say that because that runs into a lot of regulatory issues. Now here's the key. The key is not to lend your money to your bro cousin Bunty who wants to go out and buy some Gucci. The goal is to lend your money to somebody sophisticated who wants to buy, say, a rental property or a real estate flip. You pay them some money, and then they pay you interest, and you have collateral on that property. There are plenty of platforms on the internet that allow you to do this type of peer-to-peer lending. Go out and try them. Just go to Google, search peer-to-peer lending. You'll see a bunch of different options out there, and then you can see what types of interest rates that you get. In general, the higher the interest rate that you get, the higher the potential risk, meaning the higher risk that the person doesn't pay you. But there's a lot of people that have built their entire business around just lending money out and getting interest back. This brings us to number six and seven, which I'm going to call pseudopassive income because it requires you to go out and build an asset first that can pay you for the rest of your life. Let me explain, starting with number six, royalties. This is where you work to create some content that can pay you for weeks, months, and even years into the future. The most popular example of this is writing a book, and then you can sell this book around the world forever. But I've never written a book before, so I don't have any firsthand experience, so I don't want to spend too much time talking about it. But you get the idea. If you write a book and it gets published, you can get paid for somebody reading that book and buying that book on the other end of the world three years from now. But I want to talk about YouTube and podcasts because this is very similar, where you can work to create content one time. I can work to make this video today, and if it generates views three years from now, it will continue to put some money into my pocket. The tricky part with this type of content is it takes a lot of views before you actually make any significant money. Like my channel here, Minority Minds, I make something like a penny per view around that. So unless you're making thousands or hundreds of thousands of views, it doesn't really add up very fast. But if you can work to create better content and you can work to get better views, now that royalty starts to kick in because you can make videos today while the videos that you made two years ago continue to drive views for you. And now it's starting to get even more interesting in this economy today because there are so many new media platforms that are popping up. And I'm just going to tell you from personal experience that companies will now pay you for this content. They'll take your YouTube content, they'll take your podcast content that already exists, and then they'll go want to put it on their new platforms, their competitors to YouTube or these other streaming and content platforms, and they'll either pay you a flat fee for the content you created six months or two years ago, or they'll pay you some sort of other royalty or revenue share, and you don't have to go out and create any new content. That content that you made years ago is now making those views, those pennies on YouTube today, but it's also then being licensed onto other people's platforms where they're also working to pay you as well. So if you can create valuable content that people want, you can create multiple streams of income out of that content, but the difficult part is creating the content that people actually want. It is hard. It took me about a year and a half before I got my first YouTube check. I didn't make YouTube videos with the intention of making money. I did this as a hobby because I really wished somebody would have told me this financial education stuff when I was getting started. I graduated law school. I didn't have to work as an attorney because I saw the other side, and I was deep in real estate investing, and I was working on some other business. So YouTube was really just a hobby as a way for me to talk about the things that I wish somebody would have told me and kind of like a vent because I was frustrated by the system. About a year and a half into me making YouTube videos, I got my first YouTube check. It was a little bit under $500, and I'm a licensed attorney. So yes, I could have made way more money not making YouTube videos, but now my YouTube channel makes me a whole lot more money, which did not happen overnight. It took years before we started to make any decent income, and by decent income, I mean $1,000. It took years to make $1,000 off of YouTube. Fast forward to now, if my YouTube channel made $1,000 in a day, we would be wondering what broke. And the pseudo option number seven that we have here is content licensing. This is sort of similar to creating these royalties, but instead of creating a book or this type of content yourself, you're capturing content by taking pictures and then licensing out to some of those platforms on the internet, or you're working to create music that people can then license from you. Again, more niche, more work, but if you're willing to stick with it and it's something that you're actually passionate about, after a while, you might be able to create a whole new stream of steady income from the content that you've already worked to capture or create. And the whole thing about this, the pseudopassive income, is it takes a whole lot of work in the beginning with no returns, no results, and just no money. But if you stick with it and you get past that hump, well, now you can start making money from all the old content and the new content, but you've got to be willing to put in all that initial work to get started. And with that, we have covered seven ways to create new cash flow, generally passively, without you having to go to work. The first five are much more passive, where you take the money that you generated and you put it to work. Number six and number seven require you to put in the work in the beginning, but then once you get it going, you can create a machine that continues to pay you even when you're not working. But the whole idea here is being smart and intentional with your money and your actions. That way, you can work to create new income streams so you don't have to keep relying on your salary. Now, with that, I want to hear from you. What are you more interested in? Are you more interested in learning how you can work to create more income actively or how you can invest your money passively? Let me know as we work to decide what types of content I should be creating more of. Do you want more of the how do I create more active income or how do I invest the money to create more passive income? This is how the majority of Americans statistically manage their finances. Let's assume that you make as a household $60,000 a year, which is $5,000 a month. Now, who's the first person that you're going to pay? It's not Chipotle and it's not Amazon. It's the government because if you're working a job...