What Are You Doing To Build Passive Income?

[james.hendrickson]

SA Forums Community - thought I'd pose this question to the board.

What are you doing to build passive income?

I'm working one obvious method - investing in stocks, I've also got an app called honeygain.com installed in my computer, but thoughts or comments would be appreciated. I'm interested in being experimental these days.

[disneysteve]

I'm investing in stocks, bonds, mutual funds, and ETFs. Once we are ready to retire, that portfolio will be our source of income in the form of interest, dividends, capital gains, and when necessary or with RMDs, selling of shares.

[srblanco7]

I'm investing in stocks, bonds, mutual funds, and ETFs. Once we are ready to retire, that portfolio will be our source of income in the form of interest, dividends, capital gains, and when necessary or with RMDs, selling of shares.

Pretty much the same approach. Invested almost entirely in mutual funds (roughly 80/20 stocks/bonds) with about a 50/50 split between retirement vehicles (401k's and Roth IRA's) and mutual funds in a brokerage account. Post-retirement, I'm targeting an approach where we would balance withdrawals from 401k's, receive (rather than reinvest) the dividends & capital gains from the brokerage account, and supplement with selling shares from the brokerage account as required to generate income while working to minimize tax implications.

[kork13]

Primarily stock mutual funds/ETFs, with a small bond MF position in retirement accounts. Also working to build up more rental real estate properties. Long term, the plan is to have our net worth held equally between retirement MFs, taxable MF/ETF, and real estate.

[bjl584]

Currently just investing in the markets.
I'm receiving a nice sum annually from dividends and capital gains
All are currently reinvested

[disneysteve]

Currently just investing in the markets.
I'm receiving a nice sum annually from dividends and capital gains
All are currently reinvested

Exactly. I was curious so I just took a very rough (and incomplete) look at our 2019 year-end income numbers from our portfolio. Without digging too deeply, I tallied up at least $47,000 in interest, dividends, and capital gains. And there are a few accounts I didn't bother looking at so the complete total was probably $50,000 or so.

[corn18]

I hate dividends and capital gains. Just costing me money in the form of 35% federal and 5% state taxes. That's why I like my index funds. They don't spin off a lot of dividends and capital gains. I had $3500 of dividend and cap gains on a $600k taxable portfolio last year. All my fixed income is in my deferred accounts. Once I retire and I'm in the 12% tax bracket, I won't mind as much, but the way I have it set up now is to minimize taxes.

[Fishindude77]

We do a number of things for passive income:
* Income from cash renting farm ground
* Income from ground enrolled in government wildlife habitat programs
* Serve on a board of a business for directors fees
* Own part of a business and receive quarterly dividends
* Take monthly draws from stock investments within our IRA

[amarowsky]

My Passive Income: (no retirement included)
1) Stocks, Bonds, Funds, and generally equities, = $340/month from dividends. <taxable accounts only>
2) Real Estate - monthly passive income (I'm the CFO of a very small LLC partnership) . = I think my monthly net cashflow /profit is close to $1096 net,month/ *$400-500 profit.
*3) Hobbies (started to grow weed for friends, wood working small projects (made chess boards & random things) , candle making [I make Bender the Robot candles for gifts], selling produce once in a while, and other various craft projects, Poker winnings,. (+/- $600 per month)
4) Royalties - I have some I.P. for sale on Amazon, and it generates a small (VERY SMALL) monthly income from clothing sales. (I want to increase this, but I've been lazy.) (+/- = $5 per month)
5) REIT - Wife has a reit that was worth like ~$12k ish (@ times) and pays us a modest, but reliable $80 per month.
**6) Side Jobs = Was mowing (2) lawns for $45 every 10 days (about 1 hour of work) + working as part time Bike Mechanic (8 hours a week * $12 p/h)
7) Small Loan(s) = I have 1 very small loan given to help out a friend (<$400 now @ 6% interest) and a 40k loan to my brother @ 4.6k % int (we paid off my moms house, he'd rather pay the int to me than the bank, and I was cool w/ it as its our inherited childhood home). Probably close to $150 per month in INT.
8) Selling/recycling things I no longer need/use online = $40/month

Puts my Roughly Passive income cashflows at about = 340+450+600+5+80+150+40 = $1,665. <----- HOLY POOPY! This is my 1st time adding these together.... One of my bucket list milestones is to reach $1,500 / month in passive income. I'll have to refine this calculation more precisely. I'd LOVE to Scratch another one off the list! (I'll repost in here if my data is accurate!) . TY for this thread, I needed some motivation! ** = Side job income not included, as the lawns are only during summer. And bikes are totally active work, albiet a tiny income.

**(not included) * (included) = not truly passive. But these are things I would likely be doing weather paid of not (exception maybe w/ the hours put into lawns and bike shop). I enjoy all the hobbies and recycling (i despise lazy waste) so I think of them as tokens of value for things I wanted to do anyway.

***Also not included = My 14 hour per week part time job as a photographer ($500 / week ) & my wifes income in corporate office working credit, she's making Mid 50's there annually. But these are our active jobs, so not too fair to include. (although our active numbers ought to increase, when I trade my part time bike repair job, for a more full time effort as a real estate agent. Gonna try to put i n about 20-30 hours a week doing that, so I'm busy again, and hopefully earning more per hour than $12 for my time). I'm fascinated w/ real estate and love talking to people, so this should have been a no brainer job!

[disneysteve]

I hate dividends and capital gains. Just costing me money in the form of 35% federal and 5% state taxes.

Only if in taxable accounts. A lot of what I mentioned is in our Roths and 401k accounts so no tax impact to those earnings now and it's all getting reinvested.

[amarowsky]

We do a number of things for passive income:
* Income from cash renting farm ground
* Income from ground enrolled in government wildlife habitat programs
* Serve on a board of a business for directors fees
* Own part of a business and receive quarterly dividends
* Take monthly draws from stock investments within our IRA

Would you be kind enough to elaborate (or share helpful info) on ----> * Income from ground enrolled in government wildlife habitat programs . I'm looking at buying some acreage , Ideally adjacent to state land in michigan. I'm looking at getting between 10 and 100 acres (depending on the price & location). And leasing to farmers and/or hunters was already in consideration. But I never considered gov't wildlife habitat programs! I was planning on turning a signifcant portion of the land to improve the wildlife carrying capacity (feed lots, bee boxes, clear some areas for passage, etc). So maybe i'm already in the correct wheel house!

[LivingAlmostLarge]

I hate dividends and capital gains. Just costing me money in the form of 35% federal and 5% state taxes. That's why I like my index funds. They don't spin off a lot of dividends and capital gains. I had $3500 of dividend and cap gains on a $600k taxable portfolio last year. All my fixed income is in my deferred accounts. Once I retire and I'm in the 12% tax bracket, I won't mind as much, but the way I have it set up now is to minimize taxes.

this is us as well. It's a pain.

[Fishindude77]

Would you be kind enough to elaborate (or share helpful info) on ----> * Income from ground enrolled in government wildlife habitat programs . I'm looking at buying some acreage , Ideally adjacent to state land in michigan. I'm looking at getting between 10 and 100 acres (depending on the price & location). And leasing to farmers and/or hunters was already in consideration. But I never considered gov't wildlife habitat programs! I was planning on turning a signifcant portion of the land to improve the wildlife carrying capacity (feed lots, bee boxes, clear some areas for passage, etc). So maybe i'm already in the correct wheel house!

Best advice I can give you on this is to visit the local soil conservation USDA office where your ground is. They will you advise you regarding what programs are available, if any.
We've taken farm ground (row crops) and put it into habitat; planting trees, shrubs, grasses, etc. following the guidelines of the particular program (there are many) and enrolled the ground in 10-15 year conservation reserve programs. We get an annual payment so long as we comply with the requirements of the program. Some of these actually pay much better than cash renting for row crop farming.

There are some minimum acreage requirements for most of these programs (probably 15-20+), and the ground typically has to have been in use for crop production. There are also some wildlife habitat programs you can enroll rough or wooded ground into designating it as permanent wildlife habitat or classified forest which generate no payment but will drastically reduce your property taxes. Good luck !

[amarowsky]

We've taken farm ground (row crops) and put it into habitat; planting trees, shrubs, grasses, etc. following the guidelines of the particular program (there are many) and enrolled the ground in 10-15 year conservation reserve programs. We get an annual payment so long as we comply with the requirements of the program. Some of these actually pay much better than cash renting for row crop farming.

!

Thank you so much for mentioning this! Were I live in Michigan, I'm told the average price (what my buddy pays) to lease farm land to farming is in the neighborhood of $75-90 per acre.

Not certain where you live in the states, but Could you give me a ballpark @ what the USDA was paying per acreage for what you're doing? (just want to quickly weigh the options). Also TY for the mention to 15-20 acres, I was thinking 10 @ a minimum, but knowing this I'd happily make my "floor" acreage w/e the lowest offering is @ the USDA [pending the availability of the programs where I am planning on buying].

[James4]

stock investment. Still, you need to take action every now and then, which doesn't make it 100% passive. In addition it can be quite stressfull. The more often you trade, the more stressfull it is.