Successful passive income streams?

[pedanticromantic]

Thanks, yes, I'm familiar with these websites and active methods and investing. I was just wanting to hear if anyone here had any success with passive schemes.

[pgher]

I think there are very few actually passive income streams.

I've been thinking about this query a bunch, and I think Hegemony has it right. Aside from totally paper investments (stocks, bonds, etc.), rental properties are kind of the classic "passive" investment. But you can either spend time on them--dealing with renters, maintenance, accounting, etc.--or money--hiring a property manager.

What it comes down to is, anything that you want to do passively, someone else is willing to do actively, and will therefore beat you in the marketplace. You want to write a successful textbook? Better keep hustling doing promotions, writing electronic supplements, doing revisions, etc. Maybe patent something? You'll have to find a company who wants to license it, and they'll probably want you to help develop it into a product. Or, perhaps you'll need to do a start-up company yourself, the ultimate in "active" income.

[Hegemony]

And there are people who live off income streams that are now passive, though they required a massive amount of effort at one point.  I know people who wrote novels that keep on selling without any effort on their part, and I knew one person who wrote for an extremely popular TV show and receives residuals to this day.  However, the initial investment of time and effort is enormous, and only a very few hit the jackpot on the best-selling novel or teleplay-writing front.  But if you are Stephen King or Joss Whedon, you can put your feet up.

And a few people I know write niche kinds of books (fan fiction, oddball erotica) and sell them on various sites.  Even there you have to have some writing talent and you need a lot of work to build up the kind of reputation where your stuff keeps on selling.  What would the academic equivalent be?  Maybe some kind of "Here's how to get a good grade on To Kill A Mockingbird without reading it" or "Organic Chemistry without studying."  But you're still competing with massive free stuff out there.

So yes, it can be done.  Can it be done easily?  No.  Can it be guaranteed?  No.  Again, if it were easy and surefire, the whole world would already be doing it.

[pedanticromantic]

I know all of this. Once again, I was asking if anyone here had first-hand experience. That is all.

[polly_mer]

I can tell you that the "passive" income we get from renting our unsellable houses in dying towns almost covers the mortgage most years after we subtract the expenses.

Getting a much higher paying job for my rarer skills instead of continuing to be paid about average for my about average skills was worth the investment of my time to get that job and has been worth the trade-offs in other ways.  My employer is currently in a crunch because so many people are retiring early (mid to late fifties) in addition to the expected grey wave in their mid-60s.

If you don't like what you're currently doing and you do have skills that could be paid more on the open market or could face living somewhere with a dramatically lower cost of living, then changing jobs may be a better use of effort than wishing for passive income to bring decent money to supplement the current job you don't like that doesn't pay enough.

[simpleSimon]

I have had some good luck (and bad luck) with investments.  For example, I bought, sold or bought again Bank of America, Facebook, International Paper, Netflix, Square, and Tesla at the right time and was able to pay off my student loans and buy a second home.  I continue to dabble in this... with mixed results.  It is not for everyone, but it has given me a degree of financial flexibility and enabled me to do some things I have wanted to do.  Including gifts to my alma maters.

[tuxthepenguin]

I know all of this. Once again, I was asking if anyone here had first-hand experience. That is all.

It's not "passive" income, if such a thing really exists for most of us, but consulting is close to it. The difficult part is getting your foot in the door. You get the first job and you have to learn what you're doing. You have a lot of unbilled hours. After that, similar jobs don't require that much work and bring in quite a bit of income per hour worked, which is really what you want when you're looking for passive income. The real breakthrough is when you hire someone else to do the boring stuff and then charge the client a big markup above what you're paying them.

Truly passive income is more of a daydream than a plan. I wouldn't spend my time trying for that. Even the people that claim to have passive income constantly create new sources of "passive income", which means it's not passive income.

[nonntt]

I know all of this. Once again, I was asking if anyone here had first-hand experience. That is all.

I wrote a set of test questions for my field that paid on a royalty model, so I believe it fits your definition of passive income. Altogether it's paid out around $1200 over the last 3 years, or around $4/question so far, with the royalty amounts (based on student engagement) recently declining. The potential for passive income is much higher in other areas than in my small and declining field. Then again, the amount of income from writing 300 test questions has already equaled my royalties on 2 academic monographs, and it takes a lot less time to write 4-part multiple choice questions than it does to write a monograph. I probably wouldn't pursue question writing on a royalty payment model again, although it certainly served a purpose at the time.