Passive Income Calculator
Passive Income Calculator Results
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What That Would Be Worth Today
Adjusted For 2% Inflation
Annual Income
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Did you know?
You Can Earn Up To 20% Annually
With the New Silver Income Fund
- 15 – 20% Targeted Returns
- Quarterly Payouts
- Outperform the S&P 500
- 401K and IRAs accepted
What Is Passive Income?
To answer this question, it is helpful to consider the definitions from various highly established sources.
Passive income is revenue that takes negligible effort to acquire. It includes earnings from rental properties, limited partnerships, and other projects where you’re not involved in the continued generation of earnings.
Passive income is money that you don’t have to actively work for; it comes in from something that already exists and continues to work for you.
While active income is earned by working a job or owning a business, passive income is earned without having to work too much for it on an ongoing basis. It’s a way of keeping money rolling in after you’ve clocked out.
Passive income refers to earnings derived from activities in which a person is not actively involved on a regular basis. It’s income that comes in regularly with little to no effort required to maintain it.
Examples include:
- Rental income from real estate
- Royalties from intellectual property such as books or music
- Dividends from investments in stocks or mutual funds
- Income generated from certain online businesses or affiliate marketing where automated systems handle much of the work.
The idea is to build assets or systems that generate income even when you’re not actively working.
As you can see from the definitions above, passive income is the direct opposite of active income. In other words, it requires minimal effort on behalf of the investor.
To help decide whether income is passive or active, ask yourself the following question. Can this entity generate money while you are asleep? If the answer is yes, it’s safe to classify that entity as a form of passive income.
Passive Income Examples
Rental Properties: If you rent out a property that you own in a personal capacity, that is considered passive income.
Investing In A Business That You Don’t Participate In: In this scenario, you are taking a strictly financial role, providing capital for a business to grow. In most cases, passive income is received through a profit sharing agreement.
Renting A Room In Your House: You don’t have to rent out your entire home. Instead, you can start by renting out a single room within your home. This strategy caters to both short term and long term rental agreements.
Renting Your Yard Using Sniffspot: Sniffspot allows homeowners to host a private dog park on their land. Depending on the size of the yard and the suburb that you are based in, you can earn up to $3,000 per month.
Renting Your Parking Space Using Spacer.com: The goal of Spacer is to provide the easiest way to rent parking from residents and businesses across the US. For people hoping to generate passive income, Spacer offers a way to turn your existing parking areas into a low effort income source.
Real Estate Debt Funds: With a real estate debt fund, you are essentially buying a part (tranche) and of an existing mortgage loan. You then receive payouts based on how much you have invested and the interest rate of the loan you have effectively bought into.
Importantly, this form of income requires minimal effort on behalf of the investor, and it can generate annual returns of up to 20%. You can learn more about real estate debt funds here.
REITs: Real Estate Investment Trusts (REITs) are similar to real estate debt funds. They effectively allow you to invest in funds (which usually own substantial amounts of commercial real estate) and then receive income in the form of dividends.
While the payouts aren’t as attractive as a real estate debt fund, it is a less risky option that might appeal to more conservative investors.
Please note, you can learn more about how generate income with your house here.
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