6 Passive Income Ideas That Normal People Can Do

The NO BS passive income video! Everything mentioned is realistic for everyday people like you!

Books I'm Reading

Chapters

00:00 Start Here
01:03 Index Investing
02:17 Dividend Payments
04:09 Evergreen YouTube Videos
06:21 Employer 401 Match
07:50 High Yield Saving Accounts
08:49 Frugal Living

There are two types of ways people generate income in life. The first way is called "Active Income," which is when the money you earn is directly tied to your time and labor. The second way is called "Passive Income," which is when the money you earn is not tied to your time and labor. In this video, I share six realistic sources of passive income that everyone can do.

1. Index Investing

Index investing is the truest form of passive income. If you simply choose to invest in a low cost index fund that tracks the SP500, in the long term, you can generate a 10% return each year. For example, if you have $10,000 invested, you might generate $1000 in passive income, which will compound over time. Investing has its risks so do your research before making a decision, but index investing is a great source of passive income.

2. Dividend Payments

Many companies that are traded in the stock market will give dividend payments to their shareholders, which are a percentage of the earnings. There are two ways people go about receiving dividends: the first is an active strategy by creating a portfolio of stocks that offer high dividends; the second way is a passive strategy of simply investing in index funds. Both strategies have their pros and cons, but I personally choose to get dividend payments through index funds because it's easy and effortless. Regardless over the strategy you choose, dividend payments are another great source of passive income.

3. Evergreen YouTube Videos

YouTube is not as passive as many people say it is because in order for your channel to perform well, you have to constantly be putting out new videos and most of those videos will not produce much income after the first week. However, there is a way to generate passive income on YouTube and that is by creating "Evergreen Videos," which are videos that are always relevant. If you set out to bring value into people's lives and choose video topics that are always relevant, those videos will continue to generate passive income; however, it is an extremely hard thing to do.

4. Employer 401k Match

Many employers offer a 401k match that is basically like free money to their employees (or passive income. The only thing you need to do on your part is to contribute your portion in order to receive the match. At my past job, I received a 10% match, which was like getting a 10% bonus every year. Making the most out of your employer 401k match is another great way to generate passive income.

5. High Yield Saving Accounts

Most banks are lying when they say that their savings account is "High Yield" because the interest you earn is often less that .5%. Certain banks like Ally or PNC offer savings accounts with interest rates that are over 4%, which can add up to about $500 on a $10,000 account. If you take the time to park your money in a bank that has a high yield savings account, it is a great way to generate passive income.

6. Frugal Living

Many people will say that living a frugal life is not passive income because by saving money, you're not generating money; however, you actually are. By keeping your living expenses low, you make you money last longer so you do not need to earn as much and you are able to invest more, which grows your money quicker. The easiest way to increase your pay is simply by spending less. The truth about money is that it is very hard to make $1, but very easy to save $1. If you focus on living a frugal life, you can double how far your money will go without even increasing your pay!

**I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You are responsible for the financial decisions that you make. Links above are affiliate links where if you click and order, I will receive a commission at no cost to you. **

[Riggsnic_co]

The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.

[jeremymontanez]

I’d say at this point, you gotta have cash on the side and exposure so that you don’t completely fumble during bearish times, just to come out with nothing but buying bags too high later on. Not a financial advisor, just my two cents of advice.

[tylerforeman]

Money makes you more of what you already are as Dave Ramsey says. But money and having plenty of it takes one huge stress out of your world. Especially when your money is working as you sleep and pours in no matter what on a monthly basis. My passive income is much more then what I need and I literally have to reinvest it and at least 30-40 % on a monthly basis. I saved hard when I was young I worked as much o.t. When I was young to save. Then once I learned how to actually invest wow that change my life. Now it’s like a snowball that can’t be stopped no matter what mr market does thanks to my FA Emily Lois Parker.

[SolidGold-djqj]

Before you start investing, it's crucial to understand the basics of investing, different asset classes (stocks, bonds, real estate, etc.) and the associated risks. Are you investing for retirement, buying a home, or building an emergency fund? Your goals will help shape your investment strategy.
Don't put all your eggs in one basket. Diversification means spreading your investments across different asset classes (stocks, bonds, real estate) and within those classes (different companies or industries). This helps reduce risk.

[workinprogresssince]

Frugal living has definitely been my best passive income maker. I earn the same, but have more left in the bank which I can put into higher yield savings accounts.

[Housestationlive]

the problem with being frugal is planned obsolescence. per example you have for 20.000 $ of electronic devices who goes obsolete each 10 years, that means you have to spend 2.000 $ per year for maintenance. it's like a car. it worth 25.000 $ on year one, 12.500 year 4, and near 0.000 year 8. so having a car in this example costs 3.125 $ per year, because you need to spend 25.000 $ to buy a new one each 8 years. so the less technology you have in your life, the richer you will be.

[sonickchri]

Thanks for this. I'm already doing everything outlined in this video except for Evergreen YouTube videos and the wife thinks I need to do more even though she estimates we will retire early. And so I'm trying to do more...

[Mikael]

Hey there! Just wanted to remind you that it's never too late to start taking your investment journey seriously. I remember struggling for years before diving into crypto last year. And let me tell you, it completely changed my life! So don't lose hope, my friend.

[ericallen]

I keep my emergency savings in a High Yield savings account. the amount of interest made at the end of the year is enough to make an extra payment on my mortgage each year.

[DanielHYNg]

I like your last passive income idea. Living below your means can actually bring a lot of benefits to your future especially during your retirement years.

[xyc]

Thanks for this great advice! One of the best passive income videos I've seen so far. On another note: The 401k plan ... funny how it works in different countries! For us in Europe it's completely normal the we as employees and our employers contribute a certain percentage of our income to our retirement fund, next to the fact that we have a working healthcare system.

[shess]

nicely down stuff. Have a terrific weekend El Augustin😊

[danicegewiss]

I don't watch fear based videos. They annoy me no end. Videos that say the banks are going to crash in September are ignored by me. I will keep investing in my ETF'S and watch myself make money daily.

[kaninma]

I like your videos, and I subscribe. I do not feel comfortable getting money for doing no work unless it was some kind of UBI, since everyone would get it from corporate taxes used to develop a better society. Somebody who does work is losing out when profits go to shareholders, and that is not good for society or anyone. Worker owned coops, where profits are shared or reinvested in the company if the workers choose, are something I feel better about.

[kwokweng]

i always watch your videos for motivation it up

[Luncheon]

I've been kind of fooled by so many passive income videos lately, but this video by Agustin is not clickbait. Thank you 🙏

[eSHOPFinds]

The idea of index investing is like planting seeds that grow into a money tree without having to break a sweat.

[goneretired]

A lot of dividend companies have dividend reinvesting which results in compounding so your dividends and value increase over time.

[patriciakochanek]

Hey Austin- Really great video! Your content is relevant, concise, and well laid out. Visuals you chose/provided are great too! You made really good points - One thing that would also be helpful is to tie it all together at the end by adding a quick summary of all 6 points you made. Also - why not include the link to the video you mentioned. I'm going to look that one up next now, but having a link would be even better! :)

[dianesullivan]

I invest in close-end funds that pay monthly dividends. The trick is to hold long term and reinvest the monthly dividends plus buy more shares on a monthly basis or when ever you can afford to. This can be easily done because close-end funds are bought and sold on the stock market just like regular stock. That’d be enough to create a portfolio that would pay you between $50k to $70k in dividend income