3 Millionaires Share Their 3 Favorite Sources Of Passive Income
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There is a reason why they say “the rich get richer.” For most wealthy people, that reason is creating passive income streams that not only balloon their wealth, but it also provides them the freedom to live as they see fit.
Passive income (AKA how to make money while you sleep) is the dream. Of course, passive income usually starts as active income (dividends notwithstanding) but once you start generating passive income, the money can begin to snowball. And making more money with your money becomes much easier.
Some passive income steams are better than others. And Business Insider spoke with a three millionaires about the passive income streams they like the most. Here they are.
3 Of The Favorite Income Streams Of Millionaires
Adrian Brambila is a 32 year old with a net worth of $4 million. We have featured his journey on our site before, and one of his 5 strategies to become a millionaire in 10 years is generating multiple streams of income.
Brambila’s passive income streams of choice are investing, rental real estate and affiliate marketing. In 2020, Brambila generated about $750,000 in passive income from affiliate marketing alone. He does this by posting affiliate links on blogs, social media and email newsletters.
Rental Real Estate
At 30 years old, Sharon Tseung has amassed an impressive $1.1mil net worth. Tsueng is the owner of a personal finance blog called Digital Nomad Quest, although that isn’t how she amassed her net worth.
Tsueng’s passive income stream du jour is rental real estate. She currently owns 9, cash-flowing out-of-state properties that contain 13 units.
Now, there is obviously work that comes with owning rental real estate. It isn’t completely set it and forget it, but if you use a management company you can be fairly hands off. Even if you spend 10 hours a month doing bookkeeping and other work for the properties, that is still considered very passive income.
Jeremy Schneider was the final millionaire who spoke with Business Insider regarding his favorite passive income stream. Schneider’s net worth has double from $2mil to $4mil in the six years since he sold his online business around rental properties.
Now, at age 40, Schneider doesn’t have a typical 9-5 job or income. He lives off of the money he withdraws every month from his target date funds. What are target-date funds, you ask? In the simplest terms, think of them as ETFs or mutual funds that change their asset allocation (for risk purposes) as someone ages. Essentially, the investments in the funds become more conservative as time goes by.
Target-date funds are ideal for retirees who have a large enough net worth where they can sit back and literally do nothing for the rest of their lives. They also allow the investor the ability to set it and forget it. Which, could make retirement a lot less stressful.
In the case of Schneider’s target-date fund approach, he is even withdrawing less than the traditional 4% (you know, the good old 4% Rule!). Instead he is withdrawing 2% each month and living off of a $60,000 annual income. Not exactly a lavish lifestyle, but hey, he never has to work again. So we’d say that is a win!