How to make $30-150 dollars a day making small investments

I’ve been doing so much research on passive income streams that I’m glad it’s a long weekend.  There are literally hundreds of different things you can do that will generate passive income!

A major franchise business or restaurant is a great example of a single source of income, but most need somewhere between $1-2 million in order to qualify. The advantage is your buying into a guaranteed (usually 6 -7 figure) income and business model. Another one is land lording. Buying a house  and renting it for passive income won’t be enough to retire, but a small apartment building might bring in enough to live comfortably.

The average american income is around $50k. After bills and expenses there is not much left to save, even in the best case of saving $25k a year on average. There’s tens of millions who are below the average income in America. Many people are living month to month, unable to save much or at all.

The truth is there are very few single things that you can buy into or invest in that that will give you a guaranteed steady income without first having millions of dollars in the bank. The good news is, it still may be possible to break free within a few years by purchasing lower value investments with lower returns, and amassing 3-4 of these over a period of five years.

There are a franchises that are much cheaper, like Vangaurd Cleaning, ReMax Reality, and Liberty Tax Service. The drawback is the return is not high enough to retire immediately- but it will boost your annual income. They start at $3K, so they could be a good in for some people that don’t have much spare cash. You can also sell them to other investors if invest and don’t think it’s right for you after a while, so that lowers risk.

It seems that the best thing to do is to set up multiple sources of passive income across time. You can’t afford much now. So, you have two options which you must execute in tandem. You must save your money for a long time, and invest in something big. Or, you can save your money for a while and make a series of smaller investments.

By doing this, you can more quickly expand your portfolio of investments. Let’s say your an average American who’s been saving your money for three years. After unforeseen financial impacts, the $75k you should have is in fact $52K. There’s still at least 50 investments you can make today on this list.

If you make an extra $3600 a year from one of those investments, you’ve added 14% to your annual base income. You’d now make $28.5k. Was your last raise that much of an increase?

Now, where did I get $3600 from? If you look each franchise on the list, you see that the net gains are often higher than that

I say $3600 because that is the first milestone you should set- try to make $10 a day via passive income. It’s very likely in the first year you will exceed this. The next goal is $20 a day, then $30, and so on. If you can make $100 dollars a day, you will bring in a considerable amount of passive income.

dollday

Assuming you have $50,000 now- or will soon. These two table show business plans based on making small investments. On the left, we assume $10 dollars a day for each investment. On the right, one $20 and three $30. You can make your own and mix and match daily net gains. Please note that investment income should be separate from savings. I deducted 20% for unforeseen expenses. On the right, if you notice, you will bring in $37,000 of passive income annually. That’s more than you make in savings. Two more years of this and you could quit your day job.

capture

Is investing in a Small Business VS a Franchise

A few weeks ago I made a post about investing in small franchises to add to your current income stream. Today’s posts goes a step further and explores the idea of buying an exiting small business that is not a franchise. No business is the same. There is often little or no documentation like that a franchise would provide when buying a small business. Buying a small business requires much more research and attention- but can be very rewarding. Another term investors use is investing in a ‘business opportunity’.

Similarities to Franchisees:

  • Potential to earn a living income
  • You can be very independent because you run your own business
  • Can vary in price from $30,000 to $10,000,000.
  • You’re usually also buying a clientele stream along with the business.

Differences from Franchisees

  • You don’t get a Uniform Franchise Offering Circular (UFOC). The UFOC is essentially a document that outlines the businesses performance history, profits, losses, etc. Some business can provide records, but not nearly as detailed.
  • Don’t have to deal with corporate rules or pay dues and fees.
    • And as such, you have the very real reality of managing the business with so support line.
    • As a positive, you have a lot more independence and control over your image and product/service.
  • There is no “Brand” per se, or at least not in most cases.
    • This provides the opportunity to build a brand, or to change it upon acquisition very easily.
  • You usually need to invest a lot more time in the image and upkeep of the business. Sometimes, you must even manage it full time yourself (which is a great option for some)
  • There is often seller financing.
    • Seller financing is great, because it makes it easier to negotiate the mortgage and down payment. In these scenarios you work with the seller directly as a lender instead of a bank. The catch is it’s a little riskier and you will want the contract reviewed by a lawyer.
  • They can be used as a “starter package” for a different business
    • You can buy out a small business to save money on buying various equipment they may already have.
  • Can vary in net cash flow, but you can often expect to make about 1/3rd the upfront cost of the business the first year. In some cases much more, or some less depending on the service. Franchises vary as well, but tend to have more stable profit projections with a lot of math to back it up.

Buying a small business usually requires more time and effort, but can often cost less money upfront. If you want to learn more about buying a small business I can’t recommend this guide enough: HBR Guide to Buying a Small Businesss. You will need to learn how to properly value the business as well as understand the market and clientele. Unless you have the assets to hire someone to properly manage your business, you better be prepared to figure it out for yourself- of risk losing it all. Often times, buyers will manage it themselves in the beginning and until they can train someone else to do it for them.

All in all, a small business is a good investment- but as an investor you need to be savvy and understand the product. Buying a small business is usually easier than buying a franchise, thus it is more accessible to potential investors.

I’ve considered recently what kind of starter businesses I could get behind. Pizza, I think, is my favorite. In high school and college I worked for a local pizza shop and I loved it. Usually, Friday and Saturday nights in the pizza kitchen were very exciting! Making pizza is actually very rewarding and fun. I even have a my own super secret recipes for delicious fluffy dough and sauce(s). Recently, I looked around Washington and found a few pizza places were for sale. I may jump in and just enter the restaurant business one day. I have the advantage of already knowing the business. That may be a quick way out of the 9-5 and on the road to independence. 🙂

I am officially debt free today!!! (Save your money!)

With today’s paycheck, I am officially debt free!!!

… However, only in the cash positive sense. I still have debt, but the cash balance of my accounts is enough to pay off all of my debt right now (and then some). This is because I spent late 2015 and 2016 aggressively paying off my debt. I was unable to save much more than a few months rent until late last year. The advantage of this is that I was able to reduce the amount of interest will I pay and secure lower monthly payments very quickly into my career.

Had I been making the minimum payments, it may of only been $600 -$700 a month between my student loans, car payment, and credit cards. I now only need to pay $300 a month. In one year, by throwing all of my extra income at my debt, I dropped my payments in half.

I won’t count anything on credit cards as debt anymore. At this point I will only use credit for cash back benefits, and pay it off in entirety every month so I can save money. e.g. I won’t keep a balance on it and I wont pay interest.

For the record,  I haven’t paid any interest on my credit cards to date. But I’ll save that for another post. 

By front loading my expenses, and paying more upfront rather than the minimum payment, I saved a ton of money and lowered my monthly debt bill in half. Thus, I’ve made it easier to make a large investment early in my career. My goal is to become financially free and escape the 9 to 5 rat race. 

I can’t say this enough, making the minimum payments is a debt trap! Most people have no concept of saving anymore. As the result of decades of abuse of loan systems and market crashes, the debt system has exploded making it difficult for the majority of people to escape and get a head in life. Most people in America can’t afford to buy a starter home!

Saving is important, because the more capital you have, the more options you have. If you want to generate income – passive or not passive – you will need both money and time. For example It costs millions of dollars to buy a McDonald’s franchise. (There are also much cheaper franchises under $50,000 that I am seriously considering)

Most people won’t save a million in their life time! Hell, I am making just over $100,000 as a software engineer in Seattle. After taxes, housing expenses, holiday travel, and other bills I have about $33,000 left over pear year.  I’ve paid of about $24,000 in debt since I started working and have about $19,000 more to go. I am also very frugal with personal expenses. After ten years, assuming no raises, I would have $330,000 saved up. Assuming raises and bonuses, probably $450,000. In Seattle, family homes cost $1-3 million easy.

By paying significantly more than the minimum payments, I reduced my total debt quickly. This, in effect, allowed me to lower my payments. As a result, I can now save money faster. More importantly, I have minimized the amount of interest I will need to pay.

You may be wondering: “Well, since you can pay everything off now, why don’t you just do that?”

Because I have significantly minimized how much interest I will pay (and how fast it grows). The amount I pay per month will be much closer to the principal balance. The image below illustrates this concept well (sauce).

loan-amortization-emi

Most loans are structured like this, or similarly to this. They try to maximize interest profits. You pay mostly interest the first half of the loan with just minimum payments. Later in the duration of the loan, you begin to pay mostly the principal balance.

By aggressively paying off debt, I am now only paying much less interest with much lower minimum payments (Although I will definitely pay more than that). This is a technique that ANYONE with both debt and expendable income (no matter how little) needs to take advantage of. I will also be able to save more of my income to use as investment capital *hopefully* later this year or early next. This is the first step of my plan to become financially free in the next five years.

How to make $30-150 dollars a day making small investments

I’ve been doing so much research on passive income streams that I’m glad it’s a long weekend.  There are literally hundreds of different things you can do that will generate passive income!

A major franchise business or restaurant is a great example of a single source of income, but most need somewhere between $1-2 million in order to qualify. The advantage is your buying into a guaranteed (usually 6 -7 figure) income and business model. Another one is land lording. Buying a house  and renting it for passive income won’t be enough to retire, but a small apartment building might bring in enough to live comfortably.

The average american income is around $50k. After bills and expenses there is not much left to save, even in the best case of saving $25k a year on average. There’s tens of millions who are below the average income in America. Many people are living month to month, unable to save much or at all.

The truth is there are very few single things that you can buy into or invest in that that will give you a guaranteed steady income without first having millions of dollars in the bank. The good news is, it still may be possible to break free within a few years by purchasing lower value investments with lower returns, and amassing 3-4 of these over a period of five years.

There are a franchises that are much cheaper, like Vangaurd Cleaning, ReMax Reality, and Liberty Tax Service. The drawback is the return is not high enough to retire immediately- but it will boost your annual income. They start at $3K, so they could be a good in for some people that don’t have much spare cash. You can also sell them to other investors if invest and don’t think it’s right for you after a while, so that lowers risk.

It seems that the best thing to do is to set up multiple sources of passive income across time. You can’t afford much now. So, you have two options which you must execute in tandem. You must save your money for a long time, and invest in something big. Or, you can save your money for a while and make a series of smaller investments.

By doing this, you can more quickly expand your portfolio of investments. Let’s say your an average American who’s been saving your money for three years. After unforeseen financial impacts, the $75k you should have is in fact $52K. There’s still at least 50 investments you can make today on this list.

If you make an extra $3600 a year from one of those investments, you’ve added 14% to your annual base income. You’d now make $28.5k. Was your last raise that much of an increase?

Now, where did I get $3600 from? If you look each franchise on the list, you see that the net gains are often higher than that

I say $3600 because that is the first milestone you should set- try to make $10 a day via passive income. It’s very likely in the first year you will exceed this. The next goal is $20 a day, then $30, and so on. If you can make $100 dollars a day, you will bring in a considerable amount of passive income.

dollday

Assuming you have $50,000 now- or will soon. These two table show business plans based on making small investments. On the left, we assume $10 dollars a day for each investment. On the right, one $20 and three $30. You can make your own and mix and match daily net gains. Please note that investment income should be separate from savings. I deducted 20% for unforeseen expenses. On the right, if you notice, you will bring in $37,000 of passive income annually. That’s more than you make in savings. Two more years of this and you could quit your day job.

capture