$5,000 Per Month In Passive Income By 30 – Here’s How
Building, maintaining, and then re-investing in passive income streams has always been something that has interested me. I mean who doesn’t want to get paid while they sleep?
Now, if you have read or watched any of my past content on passive income you know I say that half-way jokingly. Passive income will pay you while you sleep. Trust me I hear my Venmo notifications going off at the end of the month when my tenants pay rent. Sometimes in the middle of the night.
But behind that money going into my bank account is years of work setting things up.
Nothing passive about that.
Unfortunately I see passive income and the idea of earning money outside of your normal job get talked about like it is a mythical legend only available for the rich. This couldn’t be further from the truth.
In this article, I want to share with you my plan to reach $5,000 a month in passive income. I will share exactly where I currently stand and my plan going forward. My hope is that by reading my story and seeing my thought process you can get inspired to start building streams of passive income as well.
Passive vs. Active Income
When people hear the term passive income the first thing that comes to mind is someone sitting on a beach counting out stacks of $100 dollar bills. This visualization could not be further from reality.
We’ll get to what passive income is in a minute but first, let’s talk about active income. Many of us earn active income. We earn this by going to our job, performing our tasks, and then our company pays us. It is called active income because we have to actively be there performing the task to get paid.
If I don’t go to work I don’t get paid, simple as that.
The problem arises when you realize you only have so many hours in a day. I’ve worked 16 hour days before making $12 an hour as a farm hand. I enjoyed it and the money was good for my age but I was capped. It wasn’t physically possible for me to work more than those 16 hours without having some terrible effects on my health (I need my sleep).
So what do you do?
The answer is passive or semi-passive income.
Three big things I want you to take away from this article are:
1) Active income pays you for your time while passive income pays you for your effort or value that you create.
2) Passive income allows you to earn money anytime, anywhere, from anyone.
3) Passive income gives you freedom.
After reading those most people will nod their heads in agreement that it is something they want in their lives. Which they can, anyone can, but the work that needs to be put in must be done first. That is why I use the word semi-passive instead of passive income.
For something to be 100% passive it would mean you don’t have to touch, talk, or even think about it. I do a smaller investment that is just that but they are much more rare.
Most things that people would consider to be passive income are going to take some upfront investment of your time and money. As you’ll read later on the reward can definitely be worth it.
Why My Goal Is $5,000 In Passive Income A Month
For some reason, $5,000 has always stuck in my head. As the financial nerd, I am I know how much I spend and save each month. This number is currently far less than $5,000 but I know if I can achieve that I can sustain my same lifestyle forever.
Would I love to earn much more than that a month? Of course, and I plan to $5,000 is just my benchmark for my 30th birthday.
The typical route is to invest in something like an IRA, Roth or other investment account. I do this as well and so should you. But I don’t want to wait until I’m 65 to have the ability to live my life however I want. I want that sooner, much sooner.
By building out streams of passive or semi-passive income you can speed up the process of buying your freedom back 10, 20, or even 30 years quicker.
I’d encourage you to self-reflect on your situation and think about how much you would need to earn a month to sustain your current lifestyle. Better yet, get an estimate of how much you need to earn for the lifestyle you desire if you aren’t already there yet.
That’s a good number to shoot for in passive income.
Where I Currently Stand
I have tried many things to earn passive income and most have worked. When I say work what I mean is that they have earned me money. Usually, it isn’t a lot of money, probably less than $500 total, but it is still money.
For instance, I self-published a book on Amazon. That book sold over 100 copies and made me over $500. That book still sells a few copies a month but my profit is never over $10. That venture may not have been a huge success but it did open my eyes to what is out there.
I then sold an Excel spreadsheet that evaluated real estate properties for $250. I think I sold that file 5 or 6 times. These two examples are semi-passive. I put the work in upfront and then just had to hit send or in the case of my book, let Amazon do the work.
In the last section, I told you my goal was to bring in $5,000 a month in passive income by the time I’m 30. I guess I forgot to mention that I’m not 30 but actually only 26 so I have a couple of years to work with. Good thing too because my current total isn’t anywhere near $5,000.
The passive income I earn now comes from three main buckets. The first and as you’ll see the largest majority comes from real estate investing. Second, we have some oil/mineral investments (no, not essential oils) and third, we have Young, Dumb, and NOT Broke?! This is what you are currently reading.
I’ll go into each group a little more but enough teasing here is my current breakdown of passive income.
|Young, Dumb and NOT Broke?!||$300|
The Details Of My Passive Income
As you can see my current monthly total in passive income is just over $2,000 a month. Well shy of my $5,000 goal for my 30th birthday but I believe in the long-term plan. Let’s dive into each so you can understand how I got to now.
– Real Estate
I bought my first property over 6 years ago now with the intent to rent out three rooms to my buddies and live in the other. I didn’t know it at the time but this would start a chain effect of interest in real estate.
Since then I have sold that home, bought another one in 2017, and just recently purchased a duplex with my fiance. I do manage these properties myself so they aren’t truly passive income but the time I spend on them per month is less than 5 hours. If you get this down to a dollars per hour scale I’m earning $200-$300 hours ($1500/5 hours).
This doesn’t take into account the tax benefits or equity that is being built in those properties either.
– Oil/Mineral Investments
In 2014, I was introduced to a friend of a friend who drilled for oil around where I live. I was working a corporate job and making decent money so I decided to invest. I had heard of people getting crazy returns on their investments and of course I wanted in. Now, if you are familiar with the price of oil you are probably laughing at your screen because you know what happens next.
For us normal people what happened is oil went from over $100 a barrel to under $50. Making it almost impossible to profit off of. I won’t say how much I invested but it was a terrible choice back then. I just went in with too much and should have been more conservative.
Saying that I do still receive a check every single month. I have had checks as high as $1,000 and as low as $13 (seriously). It all just matters one what the market is doing. Over the last year things have settled down and the passive income check has been in the range of $200-$300.
This is my example of truly passive income. I don’t have to do anything anymore to earn this money I just get my check in the mail every month.
– Young, Dumb, AND Not Broke?!
This website along with the associated YouTube channel, courses, etc. is my last major form of passive income. For all the long-time readers you know it hasn’t exactly exploded like I hoped it would but the site does make money.
Just not a lot.
Saying that this is my biggest bet going forward. Obviously I’m working on this actively and will continue to do so until traction starts or I find ways to branch off. Nathan Berry’s most recent post, The Billion Dollar Blog, put everything into perspective for me. People start by getting their ideas out there whether that is through a blog, YouTube channel, podcast, etc. then they find ways to branch off with their audience or skills they have acquired.
Young, Dumb, and NOT Broke?! has always been about educating people on their finances in a simple, easy to learn manner. That is why I continue to create content, courses, and coach individuals.
How can this be passive though?
Without getting too specific online content becomes passive income because once it is built it will be there forever. Take my course Money Made Easy for example. It took me about a month to build but now my audience can go purchase it whenever they want.
Giving them a ton of value in teaching them finances and giving me value in the form of money Sometimes even when I sleep 😉
Or take this video I did on Tiller Money. Tiller is a money management app that I currently use and love so I created this video and put an affiliate link in the description. That link will pay me every time someone signs up for a free trial on Tiller.
They don’t even have to buy anything and I get paid.
All I know is I’m going to keep betting on this source of passive income and see where it takes me. The internet is packed with a low barrier to entry products and opportunities to make money specifically passive income. So I’m going to do what I can to create value for the world and get paid in the process.
Where I’m Going From Here
Have I piqued your interest? Are you ready to start learning different ways you can start earning passive income?
Sure, I could have stuck to the old fashion advice of investing in high dividend-paying stocks but that takes years to start earning any real money. As for me, I’m going to double down on my internet business just as thousands have done before me. This doesn’t mean I won’t diversify, as my early lesson on oil taught me. Real estate and other ventures can still be great forms of passive income.
We live in a world full of opportunity for anyone that is willing to go out and work a little bit for it.
Think outside the box or do a simple Google search to see what else is out there and what fits your personality.
The question is are you going to be one of those people that take a chance and try to build your future or just sit back and let life go past? I’m choosing the latter and that is why I’m going to have $5,000 in passive income per month by the time I turn 30.
If you liked this post then please share by hitting the icons above and if you want to read more articles here are my latest:
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- $5,000 Per Month In Passive Income By 30 – Here’s How