4 Passive Income Stream Ideas That are Actually Passive

To preface this post. These ideas all require a fairly significant upfront cost ranging from $100 to a few thousand dollars unless you want to do the work yourself. Passive income is a dream for most, it’s really not that hard to achieve some supplemental income and build it incrementally over time to achieve your dream life. These four passive income stream ideas require very little work if your willing to provide the upfront investment to make this happen. These are all fairly risky and there is no guarantee of a return, ever. So bear that in mind while we explore these opportunities.

1. P2P Loans

P2P Loans are a way of cutting out the middle man(the bank) in the loans process. This does two things that effect you and your willingness to participate. 1. It increases the return on the investment. You can see a breakdown on investment returns for Prosper after creating an account, but they claim the average return is about 8.89% which is probably better than most of us did with our 401k or Roth IRA’s last year. The other thing it does? It increases the risk. If someone defaults on the loan you gave, your not getting it back. The plus side here is that Prosper, along with other players in the market will spread out your investment to as many lenders that meet your criteria as possible to decrease the overall risk, so that if someone does default, it’s such a small percentage of your portfolio that it won’t effect you.

This article at Financial Samurai explains P2P loans better than I ever could.

2. App Development (Reskinning in particular)

App development has been a trend for a while and I have written a good bit on the subject. See this article. Custom app development, meaning you create the idea for the app, have the design done, and then have the development(coding) done on it can be a very expensive project that your not likely to see a return on at any point. Why not? Well you might have an excellent idea, the best idea in the app store, the problem is that you may not be able to afford to hire the talent to make it a reality and it get’s poorly executed. It might also be the case that it get’s executed perfectly and ends up exactly how you wanted it. The problem is that it still may not ever get noticed. The app market is incredibly saturated and spending a ton of money on one app that may be a complete failure is just poor business sense.

This is where the very controversial app reskinning comes into play. Many indie developers hate app reskinning because it dilutes the ecosystem and causes the problem to get even bigger. The flaw with that logic is that apple is not trying to clean out the ecosystem, they could care less. They use it as a marketing ploy to get more people to buy iPhones, having 15 million apps is way cooler than having 5 million to the unsuspecting end user. The only way to make your money back on a project like this is to get involved in app reskinning.

Basically, you buy an app that has already been developed and just change what it looks like, and change it’s name. You leave the functionality entirely alone. You can make this an incredibly simple process. Buy some code for 15-20 dollars from codecanyon, then decide what you want it to look like or a theme for it to be designed around along with a name. It could be themed around anything, Christmas, Football, A celebrity, etc.. Then hire someone on elance to do the design for it and reskin the app. You can probably get this done on elance for around $150 dollars. I can’t speak to the quality because well, it depends on the freelancer you choose, so take care in deciding that. It should also be noted that to release an app on the apple app store, Apple will charge you $99 a year to sign up and be able to publish apps.

So what’s the return look like? It depends on a lot of factors. For example, the most obvious is how is it monetized? Most apps are monetized through advertisements these days, banner ads, interstitials, etc. This is probably the most effective way to do it. It also depends on how many ads show per session. For example, a game that has levels that last 30 seconds and shows a banner ad on each level and an interstitial in between every level means your getting about 4 impressions per minute. That’s a pretty high amount and will net you a lot more than having a flashlight app that shows just a banner ad, all the time. Think about this when your getting your app reskinned, you might find that you can pay an extra $50 dollars or less and build in some new logic for displaying ads more often.

So how much will it make me? Good question. Again it varies wildly. Most people refer to the app store as a lottery, you could get lucky and make a lot, but the truth is that most app developers barely break even on these things. The best thing to do is go for quantity. Learn to do the design for the reskin and have a developer insert your designs for practically nothing, maybe 20 dollars. Use the same code base for 5-10 apps and multiply the income from each using the same ad networks. You’ll see your cost continue to decline if you can eventually learn to add the code as well, then you only need to buy the codebase, which if you looked at the Code Canyon link above, you can tell it’s very affordable if you look in the right places.

Let’s say you do the design and development for some reskinned apps. Let’s say you buy two apps from codecanyon putting your cost at $40. Add the apple developer license for $100, now your at $140. Let’s publish those apps, lets say you do the work to get 10 reskins each out of your codebase. That means you now have 20 different apps published on the app store. even if your 20 apps make an abysmal 10 dollars a month, your making $200 bucks a month now. At this point, we can take some profits and expand it further, buy another app using your profits, and have a developer do the design(because it’s cheaper) 5 times and you reskin it 5 times and add the code 5 times, we just cut our work almost in half and increased our app library by 30%. You spent roughly 50 dollars per app design making the investment $250, and now your making $300 bucks a month, assuming they are all still doing terrible. you now can recoup all of our cost. 250+140 = $390 dollars in two months. and then continue to make profit the rest of the year, make one a month from here on out, and outsource the entirety and in another year, we’re up to 42 apps, or $420 a month if they are all still terrible. I think you get the picture by now, It doesn’t make a lot of sense to make 1 app, but if you get into this with the intention that your going to create an app library, you can do very well for yourself in a year or two of putting some effort into this.

3. Mutual Funds

Investing in mutual funds is a pretty obvious one. If you have the cash, it’s a good idea to put a sizeable investment into a dividend based mutual fund. This is gonna net you the highest income quarterly. Obviously this one takes a lot of money to be making alot of money, but it’s alot safer than the options I’ve listed previously. There is plenty of information out there on getting started with this that I recommend you research before diving into.

4. Use Credit Cards

Yep, I said it. People hate credit cards with a passion and I’ve never understood it. Maybe it’s because I grew up in a family that was fairly financially savvy, but credit cards can do wonders for your financial health that go far beyond the scope of this particular article. As far as making passive income goes, just using these creates income for you and your family. Spending $2,000 dollars a month and paying it off at the end, nets you 20 dollars you can use on anything from travel and entertainment to dog food and toiletries. You say well that’s only a 1% return. Yeah I know, but the thing is, your not doing anything different than you would normally do to make this money. What I mean is all of the options above require research, applications, choosing investments, possibly meeting with investors, managing apps and freelancers, etc.

This idea literally requires no thought. Wait for a good bonus signup offer from Chase (my personal favorite), usually around 35,000 or 50,000 points for spending 1,500 in 3 months or 3,000 in 3 months depending on the card, both of which should be very easy for most of us and sign up. Then all of the sudden you have $350 or $500 dollars on top of that 1% ROR for again, doing absolutely nothing but spending money, just like you normally would. Chase allows you use the points on Amazon, which means you can literally buy anything except maybe groceries. They also allow you to pay off a portion of your balance with the points, so for example. If you want to buy something that isn’t on amazon, Groceries for example. you can go spend $110.00 at the grocery store, wait for the charge to show up, and then apply the points to your statement balance on the rewards page, so you would apply 11,000 points to your statement balance and suddenly the charge disappears on your statement. Just like magic, free, money making magic.


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