Earning Offline Passive Income

In my opinion, there is a lot of attention focused on generating passive income online.  This is not without justification, but it is limiting in the sense that there are also offline strategies for earning, and many of them are hardy and battle-tested.  Below are just a few:

 

Interest-Bearing Accounts
We all know that these aren’t paying much these days.  However, I don’t think there’s any argument that a little is better than nothing at all.  Moreover, interest rates are not likely to remain at their current lows forever.  I think it’s reasonable to expect them to rise at some point in the future, so you should keep knowledge of this potential income stream in your hip pocket for future reference.

 

Book Publishing
Almost all of us at some point feel like we could write the Great American Novel.  Well, now you can turn that dream into reality.  Self-publishing has become shockingly cheap – especially with publishing partners like CreateSpace.com (Amazon.com’s publishing division).  It cost almost nothing to get your book published and out to the world.  Plus, you don’t have to spend thousands printing copies, warehousing inventory, etc.  You can print on demand – the book isn’t printed until ordered.  This is what residual income is supposed to be:  an up-front investment of time and effort (writing), and long-term, or lifetime, returns (royalties).

Dividends
In my opinion, this is the original passive income strategy.  You buy a dividend-paying stock, hold it, and just let the dividends keep coming (or reinvest them) forever.  Unfortunately, most people don’t give very much consideration to dividends these days.   In comparison to the fortunes that you hear about being made online, the quarterly dividends you might receive from investments seem rather meager.  But consider this: 

In 1990, Johnson & Johnson’s split-adjusted quarterly dividend was 3.6 cents per share.  If you had invested $1000 in J&J back then, you would have received 17 shares, making your annual dividend payout about $2.45.  (Chump change, you say.)  Fast forward to today, and that same quarterly dividend is now roughly 57 cents per share.   Moreover, thanks to stock splits, you would now own 186 shares (worth over $12,000) instead of the paltry 17 you started with.  And your dividend payout?  That’s now $424 per year.  In other words, you’re now getting back – just in dividends – almost half of your initial $1000 investment every year!  (Who’s the chump now, chump?)  And it’s just going to keep growing…  In short, dividends can ultimately play a major role in your income strategy, so don’t laugh at those pennies you could be receiving.  As they say, if you take a penny and double it every day, at the end of the month you’ll be a millionaire.

(You can confirm my J&J figures using the Johnson & Jonhson Investment Calculator.)

 

Needless to say, these are just a few ways that you can earn passive income offline.  There are many others – T-Bills, Bonds, etc. – that you could utilize as well.  The point is, there are benefits to diversifying your earning strategy, and – as you can see form the dividend example – some can have a handsome payoff.

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