5 PASSIVE INCOME SECRETS: MAKE $1,000 / Month - The Ultimate Guide

you need to know how dividends work you need to know what kind of reit it is and you need to know what does reit invest in and you as an investor as a regular person have the opportunity to be one of the owners of these big companies so now what has happened is you have already just doubled your wealth what's up everybody i am just believed singh from the minoritymazda.com where money minds rethink rich if you've ever wondered what passive income is and how you can start generating passive income you're in the right place because in this video we're doing a deep dive into passive income i've put together some of our best clips where i'm going to be going through all the things you need to understand about passive income so let's get right into it passive income is the holy grail when it comes to wealth building because now you are earning money while you sleep this is what wealthy people spend all their time building they want passive income we all only have 24 hours in a day and you don't want to spend 20 of those 24 hours working you want to have your money working for you and this is what passive income is all about you take your money you throw it somewhere and now your money's out making you money 24 hours a day while you're sleeping while you're on the beach and while you're watching youtube videos once you start investing for passive income it becomes addicting like you might just start off by getting a hundred dollars in passive income one year but the next year your goal might be how do you make a hundred dollars in a month then the year after that it might be how do you make 100 a week then after that it might be how do you make a thousand dollars a month you can get this type of passive income by investing one of two things you can either invest your time or your money you can invest your time into building this money making machine like let's say a guacamole business that you can eventually walk away from that will continue to pay you or you can just throw your money into this money making machine and have other people work to grow your money and pay you obviously the easier option is just to throw money at this money making machine because now you don't have to do any of the work but you do have to put in the time to get that money in the first place one of the biggest myths that people have when it comes to this type of passive income is that you have to be very wealthy or have a ton of money in order to get passive income but that's just not true i mean if you have more money then you can get more passive income but you don't need a ton of money to start investing for passive income that's why in this video i'm going to be going over 10 ways you can start seeing this passive income in your bank account right now with just a thousand dollars the first seven ways i'm going to be going over are completely passive these are things where you can just throw your money at something and then every month or every year every quarter you're gonna have money deposited into your account and the last three ways are suitable passive income which require a little bit of work up front but they can earn you a whole lot more passive income in the back end the first way you can get this type of passive income is by investing in dividend stocks when you invest in stock you are buying ownership in a company like if you go out and you buy just one share of the mcdonald's stock you are one of the owners of the mcdonald's corporation now you're only going to own like one 745 millionth of the entire corporation but you are still one of the owners of mcdonald's some companies like mcdonald's pay their owners their shareholders people like you dividends which are cash checks just for investing in their company when a company has a bunch of cash in the bank account at the end of the year there's three things that they can do with this cash they can save this money for an emergency they can invest it into their future so they can invest in more stores they can create new products or they can pay their shareholders one of the ways that they can pay the shareholders is through a dividend which is passive income for you so if you go out and you buy one share of the mcdonald's company then every three months every quarter mcdonald's is going to deposit a little bit of cash into your bank account this is your dividend your profit share check into your account just because you are one of the shareholders or owners of mcdonald's let me give you an idea of what this is actually gonna look like with a one thousand dollar investment because i think there's a lot of misconceptions out there on how passive income works because you have all these people on instagram and facebook talking about hey here's how you can make ten thousand dollars a month in passive income by doing nothing in 60 days that's a big lie by the way so let's go over how passive income really works mcdonald's pays a 2.4 dividend yield that means if you deposit a thousand dollars into the mcdonald's company today over the next year you can expect to make about 24 in passive income from mcdonald's ibm pays a 5.5 dividend yield which means if you deposit a thousand dollars into ibm over the next year you can expect to make something like 55 in passive income and a t at the time of me recording this video is paying a seven percent dividend yield which means if you invest a thousand dollars into a t the company they will pay you about seventy dollars in passive income over the next year now twenty four dollars or seventy 70 is not life-changing money this is not going to buy you the dream car or that fancy vacation or the private jet that everybody's talking about on social media but it's a start 24 is better than no money because if you didn't invest this money in mcdonald's and you spent this thousand dollars at mcdonald's you would be left with nothing except a very bloated stomach right but if you're investing this money into the mcdonald's company at least you make it 24 in passive income which you wouldn't have if you didn't invest it into mcdonald's plus you have to understand that you're investing into companies like you're investing into mcdonald's or ibm or at t and your goal with these investments is to see these companies grow so if mcdonald's is making more money their stock price is also going to go up which means your investment value also went up now if mcdonald's is making more money in the future then your dividends are going to go up as well which means you're going to be making more money and passive income so if you really want to win in this game you got to consistently keep investing in strong companies that way you can build wealth by owning a large share of a company and that way you can make money as the company makes more money so before i go on to the second way you can make money through passive income let's make sure our expectations are clear a thousand dollar investment is not going to make you a millionaire overnight okay a thousand dollar investment is going to make you some passive income but it's better than no passive income and it's the building block to help you build that wealth that way you can get that financial freedom that you're looking for the second way you can get this type of passive income is by investing in reits which are real estate investment trusts i discovered passive income when i became a real estate investor because when i bought my first real estate investment property this property paid me something like a couple hundred dollars a month in profit every single month and this was money i didn't have to physically earn this was money the tenants had to pay me because they were living in my property i love real estate investing as a way to generate passive income but there's a couple downfalls that come with real estate investing first you need a lot more cash because you have to buy physical real estate and second you have to deal with tenants if you're investing in real estate you're going to have tenants that slip and fall while they're taking a shower and then they're going to sue you because they will say that the bathtub was too slippery when it was wet this has happened to me if you invest in real estate you are going to have tenants who are cutting cucumbers on their countertops and then they're going to call you crying because they miss the cucumber and they slash the countertop and they're going to demand that you buy them a new countertop that has also happened to me now you can hire a property manager that way you're not super hands-on involved in your real estate investments but if you don't want to deal with the headache of investing and owning your own real estate properties the next best thing is by investing in a reit a real estate investment trust because now you're investing in a company that invests in real estate the interesting thing about reits for you is that they are required by law to follow something called the 90 rule which says that they have to distribute 90 of their taxable income to you their shareholders through dividends what that means is now you can go out and invest in a reit on the stock market so this reit is a company that invests in real estate you invested in this company and now this company is going to invest in real estate now anytime this company makes money through their rental income they have to distribute 90 percent of their profits to you through dividends so if i diagram this out this is you i'm gonna draw you a nice mustache and if you go out and you invest in this reit this reit is a company that invests in this real estate now this real estate let's assume this is an apartment complex these tenants are going to have to pay your reit this company rent and then this rate is going to have to pay their expenses and pay their bills and then out of what money is left they're going to take 90 of this money and they're going to distribute this money out to people like you shareholders through dividends let me give you a couple examples so you know what to expect when it comes to returns i'm not telling you what to invest in in this video i'm just giving you examples that way you can get an idea of how this type of passive income investing works and while i'm at it with the disclaimers i should also tell you that investing has risks you are never guaranteed to make money when you invest you might even lose money so always always always do your own due diligence and never blindly listen to a random guy on youtube spg is simon property group and this is a company that invests in a lot of mixed use and major property developments throughout the united states and they are paying a six and a half percent annual yield so if you invest a thousand dollars into this reit you are going to get 65 back in passive income without doing anything and you also don't have to deal with any tenant issues because your reit the company is going to deal with that headache so you're investing in a company that's investing in real estate and your company is doing all the work and all the headache and all the management stuff with the real estate you're just getting that passive income nli is annually capital management and they do something a little bit different so they don't actually own the physical real estate properties they own the loans they invest in commercial mortgage-backed securities and they pay an eleven and a half percent annual return so if you go out and you invest a thousand dollars into noi you will make about 115 and passive income while doing nothing while this company does the work and the bigger the dividends get the more risk there is so these are things you want to keep in mind at this point what a lot of people start doing is they start googling how to find the highest dividend yielding stocks and then they just invest in companies that are paying the highest dividends as somebody who did that during his college years let me give you a little bit of a warning you should never solely make your investment decision based off of what dividend a company is paying because that dividend yield can be very deceiving let's say you want to invest in this hypothetical company that is trading for a hundred dollars a share and they're paying a five percent annual yield so if you invest a thousand dollars into this company they'll pay you fifty dollars if you invest a hundred dollars into it they'll pay you five dollars over the next year now what you want to pay attention to is how strong the actual company is because let's say this company starts to do really bad they start losing money and they're on the verge of bankruptcy and this stock tanks in price they go from 100 a share to 20 dollars a share because they're doing really bad financially at this point if they have not adjusted their dividends yet it will look as if they're still paying this five dollar annual yield right this is how much money they were paying here and assuming they haven't adjusted their dividends it will look like they're paying a five dollar annual dividend for a 20 share price of the stock that is what a 25 return on your money so people might look at this and say wow this company is amazing they're paying 25 a year on my money but what you don't understand is that this company might be on the verge of bankruptcy so yeah you might make a little bit of dividends but then next thing you know this company could go bankrupt or if they don't go bankrupt they can also cut their dividends to zero and now you are owning a company that is not really doing anything this is why it's very important before you start investing in companies for the dividends that you're analyzing their financials and you're analyzing the fundamentals of a company that where you're investing in a company that you want to own that is going to be more profitable in the future than it is today and if this is very overwhelming or if you don't want to do this or if you don't know how to do this then you might want to consider looking at three index funds with an index fund now you don't have to find the perfect company to invest in you can invest in a fund or a group of stocks which give you exposure to a bunch of different stocks and now if you're investing for dividends as passive income you can invest in a fund that is giving you this passive income there's a few ways you can go about this one thing you can do is invest in a fund like voo that's going to give you exposure to the general stock market so voo invest in the top 500 companies in the stock market so if you invest in vo you're getting exposure to the top 500 companies in the stock market at the time of me recording this video voo is paying a 1.75 percent dividend so if you invest a thousand dollars into vo today over the next year you can expect to make something like 17 18 and passive income from dividends again this is money you're making by doing nothing except just throwing your money into this fund and you also have exposure to the top 500 companies in the stock market so the goal is also this year thousand dollar principle your investment go up in value as well vnq is the vanguard index fund for reits so if you want to invest in wreaths and get exposure to real estate but you don't want to do all that work to find the best read to invest in and risk your wreath going bankrupt one thing you can do is invest in vnq because this fund gives the exposure to a whole bunch of different reits at the time of me recording this video vnq is paying 3.85 a year in dividends vym is the vanguard index fund that gives you exposure to high dividend yielding companies so if you want to invest in companies that are paying high dividends and you don't want to go out and find all these companies you can just invest in a fund like voim which invests in high dividend yielding companies at the time of me recording this video vym is paying 3.62 percent a year in dividends again these are not life-changing amounts if you just invest a thousand dollars but it's the foundation to building wealth that way you can create a whole new passive income stream because this is money you're making without doing anything you just throw your money into these funds and then your funds are investing in companies which are doing the work to earn your money and this is what you're making without doing anything if you are interested in learning how you can grow this type of passive income even quicker stay tuned because i'm going to be talking about how you can amplify these things by doing something called pseudo-passive income investing but i'll get to that in just a little bit also if you ever want to learn more about how to invest in stocks or passively invest your money we have articles on this on our website the minoritymindset.com and i'll also link it for you in the description below the fourth way you can get passive income is by investing in crowdfunded real estate investing in crowdfunded real estate is similar to investing in a reit where you're investing in a company that invests in real estate but now with crowdfunded real estate you're actually investing into a fund that gives you direct exposure to the real estate itself you can't invest in crowdfunded real estate on the stock market you have to go through a third party platform which gives you exposure to these real estate investments this would be using something like fundrise and on their website it says that the historical returns for the last number of years has been something like eight to twelve percent a year now this eight to twelve percent figure is not just the amount of passive income you're getting this is the passive income you're getting through dividends and it's also depreciation in a property so the way this works is you are investing directly into a fund and this fund mimics the returns that a real estate property or a group of real estate properties is getting so if these real estate properties go up in value your fund goes up in value and if these real estate properties make money through rent then you make some money through rent as well this is what your dividends are again with this type of crowdfunded real estate you're not the one going out and finding real estate deals you're not the one going out and finding tenants you're not the one managing tenants or paying the bills you're just investing into a fund that gets exposure to this real estate and there's other people that are doing all the work and as these real estate deals make money so do you so this is an easy way for somebody to get exposure to real estate and get passive income from real estate without actually going out and spending hundreds of thousands of dollars or millions of dollars buying physical real estate investments if you are interested in learning more about how crowdfunded real estate works and how you can invest in real estate we have articles on this on our website the minoritymindset.com and i'll also link it for you in the description below the fifth way you can earn passive income is by being a banker without actually being a bank the way this works is you find people who want to borrow money maybe they don't want to go to a bank to borrow money or they can't qualify to borrow money from a bank and so you can lend money to these people and in exchange for them borrowing your money they will pay you interest every single month just like you have to pay the bank interest if you borrow money from the bank the interesting thing about this is that if somebody can't qualify to borrow money from a bank they're gonna have to pay you higher interest to make up for this higher risk there's a couple ways you can go about doing this i mean you can find somebody who wants to borrow a thousand dollars but then you're going to have to create all the paperwork and manage the investment which is a lot of time and a lot of paperwork which isn't very passive or you can use an online lending platform out there like lending club they're not paying me to say this i'm just giving you an example these are the return numbers i just pulled off their website to give you an example of how this type of lending works so they say the average return the average interest rate is 14 so this is the money the borrowers are going to pay to borrow money now out of this 14 you're not gonna get all this money because some people are just not going to pay their loans and other people are going to pay their loans off early if you pay a loan off early you pay less interest so this is less interest than you get so they say to apply an 8 factor of loss either from people not paying their loans or from people paying off their loans early and then they apply another one percent fee for their commission now after these fees you are left with something like a five percent return and so this is money making monthly through interest and you're also getting a little bit of principle back every single month and so you just lend this money out let people use your money and then they're gonna have to pay you interest to use your money the sixth way to make money is by renting out some of your home when i was in college my roommate would talk a lot about business ideas and one idea that we came up with was on weekends that we weren't in the apartment we could sublet our apartment out to other people who wanted to stay in our city and our campus when we weren't there it's an easy way to make money because if you're not in your home for a weekend you can have someone else stay there and they'll pay you rent for that weekend back then it was really hard to do because there was no such thing as airbnb or if there was airbnb i had never heard of it if you're not at your home for a weekend or if you have extra space like a basement or an extra room you can put this on airbnb for weekends that you want other people to stay there or the alternative if you're cool with other people living in your property is if you have extra space in your home maybe it's a basement or a guest room or an in-law suite if you have this extra space you can rent it out to somebody else and they will live there and then they're going to pay you rent every single month for using your property and you don't really have to invest that much extra money because you already have the space and it's sitting there vacant and now someone's going to use it and pay you passive income every single month for using your space that you're not using depending on where you live that can be an extra two hundred to a thousand dollars a month every single month in passive income and you don't even have to invest a thousand dollars to do that if you have the space the seventh way to get passive passive income is by investing in municipal bonds earlier on in this video i was talking about how you can get passive income by investing in stocks to get dividends now when you invest in stocks you become one of the owners of a company with bonds it's a little bit different because now you're not becoming an owner of anything you are just investing your money by giving loans and you're getting paid with interest if you didn't already know cities and states love spending money that they don't have so this might be used to build schools or build roads or build police systems and so in order to fund this they need to borrow money one of the ways that local governments borrow money is by issuing bonds to people like you investors this is what a municipal bond is a municipal bond is when you are loaning money to a local government this might be your city or this might be your state and now you are loaning your money to the city or the state and the city or state is going to pay you back with interest so every single month you're going to get paid with a little bit of interest and at the end of the loan this is called the maturity date you're going to get your thousand dollars your initial investment bank there's a couple things that make municipal bonds very interesting one is they tend to be very safe because nobody thinks that cities and states are going to go bankrupt and second they can be tax-free investments if you lend money to the government they are federally tax-free that means they're not going to have to pay any federal taxes but there's also a second layer of tax called state taxes so places like new york and california have very high state taxes but if you invest in a new york municipal bond or a california municipal bond and you live in new york or california then you also don't have to pay any state taxes on the income but in order to avoid paying the state taxes you have to live in the state where this bond is located so if you are investing in a new york municipal bond and you don't live in new york then you're going to have to pay state taxes on your income but if you live in new york and you're investing in a new york municipal bond then you're not going to have to pay any federal taxes on your income and you also don't have to pay any state taxes on your income people are always debating over tax rates because the more money you make the more taxes you have to pay and so if you're making a lot of money and passive income you might be subject to really high taxes this is where municipal bonds can come in handy because if you make a lot of money you can invest in a municipal bond and make money without having to pay taxes one example of this is fny qx this is a fund that invests in new york municipal bonds and it has a one thousand dollar minimum investment requirement so if you invest in this fund with a thousand dollars this fund will pay you just about 2.5 a year in interest on your money this is where things get really interesting because it's two and a half percent that you're earning is tax free so if you are a really high income earner and you're making something like 50 a year then there's two and a half percent that you're earning tax free is actually something like five percent that you would have been earning before taxes so as you start to generate your passive income and you build your wealth and you have the high income municipal bonds are things that you can think about using as a way to kind of shield yourself against taxes now the next three ways that you can make passive income so numbers eight nine and ten are what i call pseudo-passive income these aren't things where you can just throw your money at something and then walk away but these are things where you invest your time and your money and if you do this the right way then you can eventually create this new passive income stream where you're making money a whole lot faster than if you just threw your money into something and walked away the simplest example of this is number eight making videos i can tell you from first-hand experience then you can start a great youtube channel with less than a thousand dollars like we started this minority mindset youtube channel with my cell phone in front of a white wall we didn't have any fancy equipment any editing software any sound equipment i literally just started this with the cell phone that i had and i was recording videos on a tripod in front of a white wall i probably spent like 50 or 75 to getting this channel started and now we have kind of evolved into a full media company from a very small investment here's the caveat making youtube videos is hard and being consistent is even harder but if you work really hard at this and you make your videos and you constantly try to improve and you work very hard at constantly putting out content that people want to watch eventually youtube will see that and youtube will share your content with other people now if that happens the videos that you produce six months ago and a year ago and two years ago and five years ago will continue to generate you revenue today if you put in that work initially to build that youtube channel you can build a consistent revenue stream of at least a thousand dollars a month if not a thousand dollars a week or maybe even a thousand dollars a day that is very possible with youtube if you stay consistent and you keep putting in that work to produce quality content but it's not going to happen overnight this is why i call it pseudo passive income because it takes a whole lot of work in the beginning but if you put in that work in the beginning you can create a new passive income stream because all those videos that you created over the life of your youtube channel will continue to generate your revenue for years into the future nine is affiliate blogging every company on the internet wants more sales and one of the ways that companies can attract more sales is through affiliate marketing affiliate marketing is when you promote somebody else's product and anytime somebody buys that product through your link on your blog then you are going to get paid a commission now if you like working out then one thing that you can do is create a blog where you teach people how to work out and how to burn fat then within these articles you can link to your favorite supplements using your affiliate link that way anytime people read your article about how to burn fat and they click on your affiliate link and they buy the supplement you will get paid a commission the cool thing about this is it's very inexpensive to start you don't have to pay any money to start doing this type of affiliate marketing because you can just reach out to your favorite companies and say hey can i promote your products as an affiliate and they're going to give you a special link that anytime somebody buys their products with your link you will get paid and we're in the digital age where you can start a brand new website with literally zero dollars because there are so many free website builders out there that you can use and you can start writing articles on these websites and then when people come to your website and they click on that link you will get paid well they have to click on the link and actually make a purchase but you get the idea this brings me to number ten you can be an influencer now not everybody wants to be a celebrity like kim kardashian and you don't have to be to make money as an influencer when i say become an influencer essentially what i mean is you become an influencer on social media either as your personal self or through a business brand page it costs you zero dollars to go out and create an instagram page and if you go out and create an instagram page and you start producing content so this is going to take your time but you produce content that people want to see and they want to engage with and you start to build the following you can sell advertisements on your instagram page once you get to something like 10 000 followers then you can charge somewhere between 10 and hundred dollars per post that you put on your page every single time you post something on your page the amount of money that you can charge per post is going to depend on a few factors it depends on what type of niche your page is what type of product you're promoting and what demographic your audience is but once you build that audience based on instagram which is not easy to do it takes time but if you put in that work to build that audience now you can continually sell advertisements and keep putting out instagram posts because once you have the audience it is very inexpensive and very easy to make a new instagram post and you can charge brands a lot of money to do that before we get into the next clip if you are interested in learning more about how to manage your money and invest your money the right way you can read our free guide on money management and investing and if you want to read that i'll put the link where you can download this free guide in the description below what if you could get paid to do nothing are you telling me they're bringing the unemployment program back to us breathe here's the difference between how wealthy people and broke people spend their money wealthy people use their money to buy assets which are things that pay you with more money broke people use their money to buy liabilities which take money away from you sounds simple enough right but here's the catch when you're buying assets you look broke because all your money is going out buying investments which you can't show off like a brand new car when you buy liabilities you are broke but you look rich because now you got the new cars and your clothes and your shoes but you have no money left over to actually build your wealth i want you to use your money to buy assets that way you can actually afford all the nice things that you want without worrying about the price but focusing on the asset part when you buy assets there are two ways you can get paid you can get paid through appreciation which is when the price of your investment goes up so if you go out and you buy a stock for a hundred dollars a share and then some time goes by and it goes up to 200 a share and you sell your stock you just made a hundred dollars in appreciation but you don't actually make any money until you sell your stock the second way you can get paid is through passive income which is when you get paid just for owning an investment so let's say you buy an investment for a hundred dollars this time and now you get paid with a five dollar check every single year just because you put this hundred dollars into an investment that's paying you with passive income there's a few ways that you can get this type of passive income you can own dividend-paying stocks which is what i'm going to be talking about in this video you can invest in real estate i talk a lot about this on a channel or you can lend money out to other people and get paid with interest but the focus in this video is how you can go from zero to a thousand dollars a month in passive income from the stock market with dividends so make sure you watch this video until the end because you don't want to miss any of these key details but before we get into that hit that thumbs up button below because if you don't well then youtube will be much less likely to show you any of our other financial news and education videos when you go to the stock market and you buy one share of a company like let's say for example you go out and you buy one share of mcdonald's then you become one of the owners of mcdonald's and so now when people go out to mcdonald's and they spend a lot of money and mcdonald's makes a whole lot more money you make money too and like i was saying before there are two ways you can get paid if you go out and you buy one share of the mcdonald's stock for let's say 200 a share and then mcdonald's announces that they're going to start adding guacamole to their fries and now a whole bunch of people are buying these guacamole fries you might have a lot of investors who are interested in buying the mcdonald's stock and now these new buyers of mcdonald's talk are going gonna raise the price of the mcdonald's stock and let's say for this example that mcdonald's stock now goes up to three hundred dollars a share and then you sell your stock so you bought the stock for two hundred dollars a share and you sold it for three hundred dollars a share that means you made a hundred dollars in appreciation just for owning the stock but that's not all mcdonald's makes a lot of money right well at the end of the year they have all this cash sitting in the bank account and they need to do something with this money and typically a business has three options of what they can do with the money in their bank account at the end of the year they can save some of this money for an emergency they can invest this money back into their business so their business grows faster or they can give this money to their investors or shareholders one of the ways that mcdonald's can give someone this extra cash to you an investor or shareholder in the company is by just paying you a cash dividend this is where i want you to really think differently than the majority of people because when the majority of people think of mcdonald's they think i'm going through the drive through to get some fries when you think of mcdonald's from now on i want you to think of getting some dividends again i'm not trying to tell you what stock to buy or how to invest your money i'm just trying to get you to think differently because at the end of every quarter and every year mcdonald's is asking themselves okay how much money can we give our shareholders for doing nothing except just owning our stock the more shares you own the bigger your dividend check is at the time of me recording this video mcdonald's pays out a five dollar dividend i'll show you how to find this information in just a minute but what that means is if you own one share of the mcdonald's stock they will pay you five dollars just for owning their stock this year if you own ten shares of the mcdonald's stock they will send you fifty dollars this year just for owning their stock and if you own a thousand shares at mcdonald's that means they're gonna send you a check for five thousand dollars this year for doing nothing except owning their stock at first glance this is gonna seem almost impossible because you're gonna need some serious cash to go out and buy a thousand shares at mcdonald's today but i'm gonna show you some tricks that you can use to build up this passive income from dividends quickly but first let's talk about who's paying a dividend because not all companies pay a dividend most of the companies that pay out a cash dividend are going to be the more mature type companies because these older mature companies are going to be the ones that have a lot of cash sitting in the bank account at the end of the year your startup and growth companies not so much they're going to be less likely to pay you a cash dividend because if you remember there are three things that you can do with your cash at the end of the year you can save it you can invest it or you can give it to your shareholders well your startup and tech companies are growth companies which means they're going to be investing most of their money or all of their money back into their business because they want to grow as big as possible as fast as possible most of these startups slash tech companies are trying to grow big quickly so they actually have negative cash flows because they're using debt or investor money to grow their business as fast as they can and so they actually don't have any money left over in the bank account at the end of the year and if they do then their investors are going to think that they're actually hindering their growth because they're not spending money fast enough so if you're looking for big dividends then you're going to be looking for companies that have big profits your mature companies your reits and your high-yield dividend etfs a reit is a real estate investment trust and these are companies that invest in real estate so when you invest in a reit you're not investing in real estate directly you're investing in a company that's investing in real estate and by law reits are required to pay 90 of their taxable income out to their shareholders so you through dividends that's why in general reits tend to have much higher dividends than other stocks a high yield dividend etf is a fund that invests in high dividend paying companies so if your goal is to build up that dividend portfolio and you want to stack that dividend passive income one thing that you can do is go out and invest in a bunch of high dividend paying companies the alternative is you can invest in an etf like vym again not telling you what to invest in just an example which invests in high dividend paying companies now vym this etf is gonna go out and invest in a bunch of different high dividend paying companies and you can just invest in that fund that will get exposure to all these different high dividend paying companies you can see how big of a dividend a company is paying or not paying by using a stock brokerage like our sponsor weibull so if i want to see how big of a dividend that a company is paying i can just come onto weibo and enter in the ticker symbol in the search bar so if i want to search vym i can just click on vym or search it in there expand the information and then i can see okay vym pays out a dividend of 2.95 96 cents a share based off of the current share price so for every share that i buy they're going to pay me 2.96 for this year that's a yield of 3.58 based off of the current share price let's compare that to mcdonald's so if i come here to mcdonald's i expand the information it tells me that mcdonald's paying out a dividend of five dollars a share which is a yield of 2.36 okay not bad and i'm gonna compare that to one more tesla okay so if i open up tesla you can see that tesla pays out a dividend of nothing there's just a dash there because tesla doesn't pay out a dividend right like we talked about earlier they're investing all their cash back into their business so tesla doesn't pay a dividend weeble is super simple to use all you have to do is create a free account fund it and then you can buy or sell whatever stock or etf that you want without paying a penny in commission because they are a commission free brokerage so you can use your money to invest instead of making your broker richer and the best part of all is that weeble is giving you two free stocks just for investing with them using our link in the description below you get your first free stock just for opening a free account and you get your second free stock valued at up to fourteen hundred dollars when you deposit a hundred dollars in your account so if you wanna learn more and see how you can get your free stocks i got the link to where you can do that in the description below minority mindset is a partner with weeble so if you use them we will get compensated but there's no additional cost to you it's free to create an account they don't charge you a penny to make a trade and they're giving you free stocks just for investing with them so if you want to learn more and see how you can start investing i got the link to where you can do that in the description below at this point this is what most people think okay i want to make a thousand dollars a month in passive income for my dividends which is like twelve thousand dollars a year so if i wanna make twelve thousand dollars a year and i can get a three percent dividend that means i'm going to need four hundred thousand dollars in my bank account to buy stocks so i can get my 1 000 passive income from dividends i guess i'll pass here's the secret if you really want to win in the passive income game you have to understand that this passive income dividend game is secretly a compounding game if you want to get to the thousand dollars a month quicker you need to do two things one you need to invest consistently into your dividend paying stocks and second you need to compound your dividends i'll show you what i mean and i'll stick with the mcdonald's example to keep things simple so 10 years ago the mcdonald's stock was trading for sixty five dollars a share and they were paying a dividend of two dollars and twenty cents a year which is fifty five cents a quarter if you spent a thousand dollars in 2010 buying shares at mcdonald's you would have bought about 15 shares at the mcdonald stock because their price was only 65 dollars a share and in 2010 you would have only made like 30 dollars over the year in dividends well in 2020 those same 15 shares that you bought wouldn't have paid you 30 dollars they would have paid you 75 dollars in 2020 because their dividends went up but now let me add in another variable to this let's say this time you don't just buy a thousand dollars worth of the mcdonald's stock you buy 10 shares of mcdonald's every single month so in the beginning that's about a 600 or 700 monthly investment that means over the last decade you would have bought 1200 shares of mcdonald's and in 2020 each year mcdonald's is paying their shareholders five dollars a share that means in 2020 you would make six thousand dollars in passive income through dividends just for owning the mcdonald's stock that you have picked up over the years now we're getting close to the thousand dollars a month but now let's do one more thing now okay you are buying 10 shares of mcdonald's every single month but every time you get a dividend check let's assume that you don't go cash it out let's assume that every time you get this dividend check you just take this dividend and you go out and you buy more shares at the mcdonald's stock now you're buying more shares of mcdonald's every single month but you're also putting more money back into mcdonald's because every time mcdonald's pays you you just use that money to buy more shares that means every single year you're going to be buying more shares which are going to be paying you more dividends which you can use to ultimately buy more shares now instead of owning 1200 shares of the mcdonald's stock you are going to own 1417 shares of the mcdonald's stock which means you're going to be making almost 7 100 a year in passive income so even if you don't put in another dollar into the company they're already paying you 7 100 a year and if you're doing this dividend reinvestment you are buying another 7 100 worth of mcdonald's stock every year without putting another dollar into the company so your wealth snowball is really rolling but if you continue buying stocks like normal and you continue reinvesting your dividends like you've been doing you will get to that one thousand dollar passive income mark in less than five years and then you'll be able to double that very quickly oh and i should also mention that if you do this and you own 1400 shares of the mcdonald's stock you're also sitting on a nest egg worth almost half a million dollars that you just happen to build up slowly as you're building your passive income now your snowball is rolling by itself and every time you add more money you're just packing more snow onto your wealth snowball that way it can roll bigger and faster and bigger and faster and make you wealth quicker if you want to speed the process up there's a couple things that you can do you can invest more money that way you're growing your money faster or you can invest your money into a stock or etf that's paying you higher dividends because there are funds out there that pay two or three times what mcdonald's is paying but mcdonald's is just an easy example because everybody knows what mcdonald's is but to get to that thousand dollars a month the regular passive income you need three things first you need the right financial education then you need the consistency and then you need the compounding because that's going to help you get there even faster i know this can be overwhelming but remember investing is a marathon it's not a sprint it's a long term game and the people that understand it are the people that win over the long term now before i let you go if you are looking for a way to up your financial education that we can learn more about money management and investing well that's why we wrote a free ebook on money management and investing that you can read for free when you sign up for financial education emails which are also free you can get our free ebook and start reading our financial education emails by clicking the link up here or by clicking the link in the description below by the way our financial education emails are separate from our financial news emails [Music] the whole idea of passive income is where you can make money without having to physically go to work when you go to work and you get paid this is called active income because you're having to actively do work in order to get this check passive income on the other hand is when you send your money off or you do this thing you have this kind of asset that is paying you with passive income because you own this thing or you have created this thing you have this machine that's printing money without you having to actually physically go to work you have two kind of general categories of passive income you have true passive income where you just buy something and you have this thing that's paying you and you don't got to do anything and then you have this kind of like pseudo passive income where you have to put in a certain amount of work to create this thing or have this thing and then once you create it then this money comes passively the reason i'm making this video particularly is because i released a video on youtube where i talked about different passive income ideas that you could do with less than a thousand dollars that video got a lot of love and so i wanted to expand upon that topic by going over 25 different passive income ideas that you can start today even if you don't have a whole lot of money i'm going to be going over a lot of different topics in this video and so i don't bombard you with a whole bunch of information that you might not need if you do want to learn more about anything that i do talk about in this video i'm going to have links for you in the description below the first passive income idea is by investing in dividend-paying stocks this is a type of true passive income so some of the biggest companies in the world trade on the stock market and you as an investor as a regular person have the opportunity to be one of the owners of these big companies by investing in their stocks on the stock market now some of these big companies will have a lot of cash in the bank account at the end of the year and there's three things that they can do with this cash they can save some of this cash for emergencies they can invest this cash back into their company or they can reward the shareholders you the investor by just giving you a check this passive income that a company pays you is called a dividend and most companies that pay a dividend pay out their dividend every three months so if you invest in a dividend paid company every three months or so you are going to get some cash deposited into your account for doing nothing except owning a company that pays a dividend not every company pays a dividend so this is something you got to do a little bit of research on because the companies that typically pay dividends are your bigger and more mature companies because these are companies that don't want to invest all their cash back into the company because they're already big they're already mature they're already established and so when they have all this extra cash in their bank account at the end of the year they just distribute this to the shareholders their investors people like you who own the stock and that way you can get your dividend without doing anything except just owning the stock i'll give you a quick example of what i mean so verizon pays out a dividend and at the time we'll be recording this video verizon's dividend is two dollars and fifty one cents a share which is right around a four and a half percent yield so if you went out and you spent a hundred dollars buying the verizon stock after one year they would give you four dollars and fifty cents in passive income this is purely passive income you don't got to do anything except just own the stock and that is in addition to you owning the stock so if the stock price goes up that's icing on the cake because this dividend is something they give you just for owning the stock some other popular dividend paying stocks include mcdonald's which is paying out a two and a half percent yield ibm which is paying around a five and a half percent yield dte which is paying around a three and a half percent yield and 3m which is paying out about a 3.3 dividend yield at the time of me recording this video the last thing that i want to mention about dividends is the amount of dividends that you're getting from a company does change like if a company makes more money which is the goal then the amount of dividend that you're getting will hopefully go up but if a company starts to struggle then you could see your dividend go down number two invest in rental properties this is one of my favorite ways to generate passive income the way this works is let's say you go out and you buy a house for a hundred thousand dollars now instead of you living in the house yourself you would rent this house out to somebody else another family and this family would live in your house and they would pay you rent for let's say a thousand dollars a month every single month for them living in your home the great thing about this is once you own this house once you own this asset you don't got to do any physical work to continue getting paid because now these people that are living in your home are going to have to pay you every single month for living in your property so once you own the ass at the home now this home is going to continue producing cash flow as long as you have people living there the thing about real estate investing i'll tell you from personal experience is in the beginning it is not going to be passive you have this kind of like hurdle that you have to jump over to understand how real estate investing works but once you get over the hurdle real estate investing can be completely passive because you can pass on all of your day-to-day duties to a property management company a property management company's job is to essentially handle all the day-to-day stuff with managing a rental property they will find you tenants they will qualify your tenants they will do the background check their credit check screen them and approve them and put them into your property then once the tenant is in the property your property manager's job will be to measure your tenant pays make sure they pay on time if there are fines to make sure they assess them to make sure the properties take care of to make sure the property bills are paid to make sure property taxes are paid and to make sure all the work if there's work that comes up is taken care of that way all you got to do is collect the checks again it takes a little bit of work to get there but once you get there real estate can be completely passive investing in rental properties real estate does take more capital but it's a great way for you to invest your money and own a physical asset that's paying you with passive income three put your savings into a high interest savings account most traditional banks are paying you next to nothing on your savings so if you save your cash at bank of america or chase or one of these big traditional banks chances are your savings account is giving you nothing no matter how much money you have sitting there but thanks to the internet there's been this growth of online banks which will pay you a much better return on your savings than you're gonna get in one of these traditional banks because these online banks don't have the same retail presence they don't have to pay for rent they don't have to pay for tellers they don't have to pay for utilities at all these physical locations and so they can reward you with a higher interest rate on your savings the reputable online banks work just like your traditional physical banks the fbic insured your money is protected and you can access your cash whenever you want the real difference is one is online one isn't i have an account at an online bank and a physical bank where i keep most of my savings in my online bank because it pays me a better interest rate while my checking account is at a traditional bank right now one little caveat that i want to give you about these high interest savings account is that this high interest savings account is not a substitute to invest in your money this is just a way for you to save your money and get a little bit of a better return and not get all of your savings eaten away by inflation because now this online bank account gives you a little bit of a better return that way you can earn more money in your savings fourth you can monetize your knowledge by selling a class online at udemy or skillshare or coursera these platforms are marketplaces for education and so let's say you go out and you create a class on how to be good looking now you create this class one time and then you can put it on one of these platforms once it is on one of these platforms if people search how to be good looking your class might pop up and then they can purchase your class and if people purchase class or watch your class then you will get paid now each platform works a little bit different as to how the actual monetization process works but in general that's how it works kind of interestingly minority mindset originally back in the day started on udemy because i was working on this other business at the time and i got scammed by this fake marketing company and i had lost a whole bunch of money and after i lost this money i went to udemy and i created this class called how to launch a business without getting screwed over i charged like seven dollars for it it's not available anymore but people started enrolling in this class and they created this kind of passive income for a little while until i removed the class because i created this class and i put it on udemy and then people started buying it now we've become more mature instead of me signing a class and you demi i ask you to smash a thumbs up button below number five is you can invest in crowdfunded real estate the alternative to investing in physical rental properties which can take a lot of money and a lot of time and a lot of effort is to invest in crowdfunded real estate but now you're investing in a fund which gives the exposure to a whole real estate investment portfolio this is what crowdfunded real estate is and as the properties in your portfolio become more valuable you make more money and as these properties make income from rent you make some dividends the great thing about crowdfunded real estate is you don't got to do any of the physical work you don't got to find the property or do the renovation or deal with tenants all you got to do is invest your money into this fund and you don't need as much money to invest in crowdfunded real estate because you're not buying the whole property you can invest a little bit of money and get a piece of the pie again if you want to learn more about how to do this i'm going to link some resources for you in the description below number six is you can sell an ebook on amazon if you like writing this could be a great one for you because the way this works is you're going to write a book it doesn't have to be super long but you're going to write this book and then you're going to get it published on amazon as an e-book you don't got to worry about getting a publisher or do all that marketing or anything you just got to get it on amazon once it's on amazon you can do a little bit of seo work so when people are searching topics related to your book your ebook will pop up and then anytime somebody buys your ebook they will be able to download it and you get your royalties depending on how good your book is and what the topic is once you get it up and running this could be a way for you to make a few hundred dollars a month consistently without really having to do much work once it's listed number seven rent out your car if you have a car that you're not using all the time you can use a platform like touro and rent your car to somebody else and let them pay you for using your car you can add in whatever restrictions you want when people are driving your car but if your car's just sitting there doing nothing you might as well make some money off of it by letting somebody else drive it number eight if you got some extra space run out your home if you have a basement that you're not using or an extra room like a guest room that you're not using or you're not going to be home for a little while you can use this space to generate your some passive income by listing the space on a platform like airbnb or vrbo because then somebody else can stay in your home your property or extra space and they'll pay you for staying there number nine so this one isn't exactly passive income but it can be an easy way for you to save a lot of money if you have a mortgage you can refinance the whole idea behind refinancing your mortgage is you're going to take a current loan and you're just going to move it to a new lender and hopefully a lower interest rate so now you have the same loan as before but you're just paying less money because interest rates hopefully came down when it came time for you to refinance so you can save a whole lot of money i mean some people can save hundreds of thousands of dollars by doing nothing except just refinancing their mortgage again if you want to learn more about how to do that the right way i have some resources for you in the description below number 10 you can do peer-to-peer lending and get that passive income through interest the way banks make money is by lending you money if you borrow 100 000 from the bank and you spend 10 years paying it off then over those 10 years the bank is gonna be getting passive income from the hundred thousand dollars that they gave you because you're going to be paying interest to the bank every single month on the 100 000 that you borrowed well you can copy the bank's model by doing peer-to-peer lending where now you're using a platform there's a bunch of these online where you're lending your money to somebody else and now somebody else is borrowing your money so you give them your money and then they're going to do something else with it maybe they're going to buy a car or maybe they're going to pay down their debt they're going to do something with your money and then they're going to pay you interest every single month until they pay your money back just like everything else there is risk involved here i mean there's a risk that the person who's borrowing your money can default but this is where you got to do your own due diligence find somebody good to lend your money to and use a credible source and if you do that then this can be an easy way for you to generate passive income just by lending your money out number 11 you can enter the vending machine business so the way this business model works is you can create your own vending machine company or you can buy a franchise to a vending machine company or you can buy an existing vending machine company that already has the machines out there and you're going to put these machines into different places maybe stores wherever there's a lot of foot traffic then when people buy candy they buy pop they buy these things from your vending machine then you will get a percentage of the profits your job is to make sure the vending machine is full and make sure that you're getting paid the nice thing about the vending machine business is you don't need a ton of money to start like you don't need the same type of capital you need to go out and buy a rental property and it can generate you the pseudo passive income because you don't got to physically be there to sell the candy and pop from your machine number 12 is you can make money through affiliate marketing affiliate marketing essentially is when you are a commissioned salesperson on the internet so let's say you start a blog where you're talking about how to burn fat one of the things that you can do now is you can find a protein supplement that you really like and market the supplement on your blog if people buy the supplement from your blog then you get paid every time somebody buys a supplement the key to making money here for affiliate marketing is you need digital traffic so you need eyeballs you need people to click on the link that you're marketing and you need people to actually go buy whatever it is you're selling and so you need some kind of consistent traffic source on the internet maybe you have a popular instagram page or a popular blog or a popular podcast and so you got to put in the work to kind of build this kind of presence on the internet and once you do that you can just place your affiliate link there and it will continue to drive you revenue as long as people are checking out your content number 13 is you can sell digital files on etsy if you're good at design this could be a great one for you because now you can go out and you can create different digital files maybe you create a travel guide or maybe you created some wall art you spend some time creating this digital file and then you can put it on sale at etsy which is a marketplace so if people are searching for motivational wall art and your image pops up and they purchase it now you get paid number 14 is use your bank cd or certificate of deposit now personally i'm not a big fan of the cd as an investment source because the returns on cds aren't the greatest but it is a way for you to generate some passive income you can think of a bank cd kind of like a glorified bank account where you put your money into this account it's called a certificate of deposit or cd for short and when your money is in this account it's going to be locked up for a certain amount of time maybe it's six months maybe it's five years you get to decide how long and the longer your money gets locked up in this account the better your interest rate is the good thing about cds is they pay you a better return than your savings account because you're not supposed to access it if you access it early you got to pay a fee but because it gets locked up in this account you get a better interest rate there's no real work on your end because you don't got to do anything except go to the bank and tell them that you want to put some money into a cd you're not going to get the best rate of return but if you're scared of investing your money then this could be an option for you number 15 you can be a strategic digital marketer so this was actually something i learned from one of my friends who was doing this so my friend he has a lot of connections with business owners and he's made a lot of friends with these entrepreneurs who are starting these businesses some of them digital some of the physical and he used to go and do their digital marketing but then he wasn't really a fan of it he got kind of tired of doing the digital marketing so what he found out that he could do is he could partner with other companies and other people and have them do all the digital marketing because he wasn't doing super complex stuff it was mainly just creating social media posts and posting them and so he found these people that could do this digital marketing for them and so now all he does is he finds his businesses that want digital marketing done and he gets them on a retainer maybe it's a thousand dollars a month or two thousand dollars a month and then he gives these companies to the people that he's working with and he'll pay these people half of whatever he's making so if he's making the thousand dollars a month he'll pay these people 500 a month to do the digital marketing and he'll keep the other 500 and he doesn't really do anything except make sure that the work is done but now that he's found good people it doesn't really take that much work at all number 16 is use a cash back credit card whenever you shop if you are a disciplined spender and you will use your credit card like cash and you're not going to use a credit card to buy anything that you normally would it with cash and you're going to pay off your entire credit card balance in full every single month and you never pay a penny in interest on your credit card then you can get rewarded for using your credit card the right way because you can use a cash back credit card that's gonna pay you something like one percent to five percent in cash back every time you swipe your card so if you go to the restaurant and you spend 100 on dinner you spent a hundred dollars but you're gonna get a little bit of cash back just because you use your credit card instead of paying with cash again the key for this one to work is you gotta make sure you're a discipline spender because if you start getting excited about this cash back and now you're spending 10 more just because you think you're gonna get two percent cash back you are losing in the credit card game the whole purpose of this is to make a regular purchases with a credit card that way you can make some money in cash back number 17 is you can start a drop shipping e-commerce store now look if you've been on the internet and you've ever kind of searched these entrepreneurial things before chances are you've seen a bunch of people sign classes on drop shipping and it has been very saturated recently but the thing you got to understand about drop shipping is at the core all it is is you are selling a product on the internet whether it's through your own e-commerce store or whether it's through amazon all drop shipping is is now instead of you creating your own product and having to manage the inventory and having to buy all the inventory up front you're working with a manufacturer where anytime somebody buys something whether it's through your amazon store or through your physical online store you are not the one that's having to physically ship it out this order should go to your manufacturer and the manufacturer is going to ship it out so if you can find a good product maybe it's a kitchen product maybe it's a clothing product and you can market it on amazon or your own store maybe on amazon you do good seo on your own store you do some instagram marketing and people start to buy it well now these orders should go directly to your manufacturer and the manufacturer is going to ship them out and you get to keep the difference number 18 is you can invest in reits which are real estate investment trusts this is another way for you to invest in real estate without having to physically invest in rental properties a reit is a company that invests in real estate and these companies these reads some of them trade on the stock market and so what you can do is you can find one of these reits on the stock market and you can buy shares of this reit now when you own shares of the suite you own shares of a company that invests in real estate so you're getting indirect exposure to real estate because now you're not getting direct exposure to the property you're getting exposure to the company that owns the property but the thing that makes reits unique is reits are required by law to pay out 90 of their taxable income in dividends to their shareholders so the shareholder is you the person that owns their stock and if you own the stock you will chances are get a higher dividend than most typical companies because reads are required by law to pay out 90 of the taxable income through dividends and their taxable income comes through rent number 19 is you can start a lead generation website if you're a tech savvy person and you're a fan of digital marketing and seo then what you can do is you can create a website that is generating traffic and then you can sell this traffic to different businesses for example let's say that you have this partnership with an appliance store in your area and then you can go out and you can create a website that's generating traffic for people that are interested in getting a new microwave or a new stove then what you can do is you can sell this traffic to a store and apply a store in your area that's looking for people who want to buy a new stove or a microwave the whole idea behind this is you're probably going to work with a few appliance stores in your area because these companies might not have the best web traffic and then they're going to pay you for every lead that you send them and so this will all be digitalized so anytime somebody from your website goes to one of these stores or fills out a form at one of these stores websites you will get paid number 20 is you can sell photos on shutterstock if you like taking pictures and you go on vacation and you take these beautiful photos of the grand canyon now you can just keep these photos in your photo album or you can also take some of these photos put them on shutterstock and if somebody uses one of these photos they're going to have to pay you money you're not going to make a ton of money if one person uses your photo but if you like taking pictures and you take a lot of pictures this can be another place for you to put your pictures and now you can monetize on the pictures that you're already taking number 21 you can rent out your parking spot so this one's reserved for those of you that live in big cities because if you have an extra parking lot you can rent it out to somebody else let them use a parking lot and they're going to have to pay you every single month one of my good friends lives in downtown seattle and the condo that he lives in gives him two parking spots but he only has one car and so he rents out his second parking spot for 300 a month and this is no work that he has to do he just lets somebody else use his parking spot and every month he gets an extra 300 number 22 you can be a house sitter this one takes a little bit of work to get started but the whole idea behind house sitting is somebody might not be home for a week or a month and they don't want to keep their home empty and so they would pay you to kind of live in their home for the time that they're not there the thing with this is you got to verify yourself as being a credible person and a trustable person but once you can do that then you can get paid to just live your life in somebody else's house because they just want somebody to live there while they're gone number 23 you can buy an online blog that's already generating revenue so blogs on the internet can make money a few different ways they can make money through advertising they can make money through sponsorships they can make money through affiliate deals and so if a blog is already making money sometimes a blog owner is going to want to get out of the business and they'll just sell this blog take the cash and then go do something else this is where you can come in find a blog that's already generating revenue that's already established and purchase it and now you have just bought a new income stream there are a ton of sites on the internet to help facilitate these type of transactions where you can go and buy an already existing business on the internet like a blog the thing that you want to understand here is if you've never operated a blog or if no idea of what the niche is like if you're buying a fitness blog and you know nothing about the fitness industry it's going to be a little bit tough because once you buy the blog you do got to make sure it's maintained and if you're not doing it you can hire somebody else to do it but you got to have a little bit of expertise because if this blog just kind of goes stale then you're going to see his revenue go down number 24 you can use your car as an advertising billboard if you don't mind using your car as a billboard for somebody else then you can go to a website like carvertize and rapify and voogo and these companies will pay you because they work with other companies they'll pay you one to two hundred dollars a month depending on how much you advertise and what you're working with to just market somebody else's company on your car and finally number 25 i couldn't make a video on this topic without mentioning creating digital content so this one isn't like pure passive it's more kind of like pseudo-passive because it takes a ton of work in the beginning but if you can build this content hub on the internet that people are going to whether it's an instagram page or a blog or a podcast or maybe even youtube then you can continue to generate advertising dollars or sponsorship dollars or affiliate dollars without you really having to do that much more work because you have built this central hub of content and anytime people go on it you will get paid here's the thing you can make a lot of money creating digital content but in order to continue growing the revenue you got to keep creating more content like for example this video that you're watching right now will make me money for as long as this video is up there like if you're watching this video a year from now or two years from now that means our company is still generating revenue today for the video that we created back in 2021. anytime somebody watches our video youtube pays us a little bit of money now it's not a ton of money that we're making per view i think youtube pays on something like a penny per view so it's not a ton of money per view but it's something that continues to generate your revenue for years into the future because once you create this content once people can watch it for years and years and years crowdfunded real estate is when you and a bunch of other people invest your money into a fund that gives you exposure to a handful of real estate properties you cannot invest in crowdfunded real estate on the stock market you have to typically use a crowdfunding service and once you invest your money into a crowdfunded real estate fund you're not going to get your money back typically for years a reit is a real estate investment trust and this is where you are investing into a company that's investing into real estate investment properties unlike crowdfunded investments you can invest in reits on the stock market so you can buy and sell reits whenever you want if you're subscribed to this channel you know that i love investing in real estate if you're not subscribed to a channel you should probably do that but i invest in rental properties i have invested in crowdfunding real estate and reits and all of these real estate investment options have their own pros and cons this video is all about investing in reits now while i'm not going to go over crowdfunded deals in this video if you do want to learn more about crowdfunded real estate i have an article on our website where our team goes over everything you need to know about investing in crowdfunded real estate deals and if you want to read this article you can do it on our blog by clicking the link up here and i'll also link it for you in the description below the reason that people love real estate as an investment is because you can create for the most part predictable passive income you buy a property and to keep things simple let's say you buy a house for a hundred thousand dollars and then somebody moves into this house a tenant and this tenant is now going to pay you a thousand dollars a month every month for living in your house but buying and operating your own rental properties is a little bit more extensive because one you need to have access to the cash to buy the property and two you need to have the team built so that means you need to have access to the real estate agents and the contractors and the attorneys and the accountants and the property managers so it's more involved this is where reads come in handy because you can invest in a reit which is a company that is now going out and investing in real estate and making money through rent the cool thing about reits is that they are required by law to pay out 90 percent of their taxable income or their rent to you shareholders through dividends reits make money by buying real estate properties and then leasing them out to other people that way they make rent so now they take all this rental money that they get and they pay their bills and now they take ninety percent of whatever money is left and they have to pay this money out to you and other shareholders through dividends a dividend is a cash payment that a company gives you so now instead of you going out and getting rent from a tenant you are investing in a company that's going to manage the property and do all the work and this company is going to pay you a share of their profits through dividends reits are a popular way for you to invest your money if your goal is passive income because reit stocks tend to pay much higher dividends than regular stocks some reits pay 10 dividends that means if you invested 100 you will get 10 back this year just through dividends but before you just jump in and invest in a reit just because they're paying a high dividend there are three things that you need to know you need to know how dividends work you need to know what kind of reit it is and you need to know what this reit invests in before i get into what these three things are i need you to do me a quick favor and smash that thumbs up button below because if you don't well the way the youtube algorithm works if you do not hit that thumbs up button below then youtube will be much less likely to show our financial news and education videos to you and everybody else when you invest in a high dividend paying reit what you'll typically see happen is that when a dividend is paid out this is called the ex-dividend date so when the dividend is paid out you will typically see the stock price of the reit fall by the amount of the dividend so if a stock is trading for 200 a share and it pays out a twenty dollar dividend you will many times see the stock fall to a hundred and eighty dollars a share the day that the dividend is paid out if it's a really strong reit you'll see the stock price climb back up because investors will use this dip as a buying opportunity to buy the stock and when it comes to dividends we have to talk about taxes dividends that you get from reits are typically taxed differently than the dividends you get from regular stocks typically if you go out and you buy a stock and this dog pays you a dividend you get to pay a very low tax rate on this dividend called the long-term capital gains rate this long-term capital gains rate is usually a lot lower than the tax rate you pay on the money you make from your job which is called ordinary income well the irs says that you have to pay taxes a little bit differently when it comes to reits the government said okay because reits pay higher dividends it's almost like another income stream for you so we're not going to give you the long-term capital gains rate which is a special lower tax rate you have to pay the ordinary tax rate which is the higher tax rate on reit dividends if you have an accountant or a tax offer filing your taxes for you this isn't really something that you have to worry about too much when you're filing your taxes because this should automatically be calculated this is more something i just want you to be aware of so you understand how the tax game works now i also do have to tell you that while i am an attorney i'm not your attorney so if you have specific tax questions make sure you talk to a tax professional in your area if you want to see how big of a dividend that a reit or any stock is paying out you can use any stock analysis website or you can use a free stock brokerage like our sponsor weibo so if i go into weeble and i look up agnc which is the stock that i was showing you earlier this is a reit and i open this up i can see that they're paying out a dividend of a dollar and 44 cents a share which based on the current share price at the time we're recording this video is a 10.12 yield now i'm going to compare this to one more reit so if i come here to spg and i open this up i can see okay that this stock is paying out a dividend of five dollars and twenty cents a share and this is a yield of eight percent based on the current stock price then if you find an investment you like you can buy or sell whatever stock read or etf you want right off of their app or your computer and they don't charge you a penny to make a trade it's free to create an account and the best part of all is that weeble is giving you minority mindset fans a free stock value between eight and sixteen hundred dollars when you deposit a hundred dollars into your account so if you wanna learn more and get your free stock i got the link to where you can do that in the description below fair warning i don't know how long this promotion is gonna last and minority mindset is a partner with weeble so if you use them we will get compensated but there's no additional cost to you it's free to create an account they don't charge you a penny to make a trade and they're giving you a free stock just for investing with them so if you want to learn more get started and see how you can get your free stock i got the link to how you can do that in the description but out now let's move along and talk about the different kinds of reads because you have two different kinds of reits on one hand you have equity reits these are reits that go out and they operate and they own real estate investments and they have tenants that pay them rent then there are mortgage rates which invest in loans and mortgages these mortgage rates make money when land owners and property owners pay interest on their debt both type of reads come with their own fair share of risk i mean the mortgage market is going to go through their own cycles just like how the real estate market is going to go through their own cycles and some mortgage rates are going to invest into more risky loans and some equity rates are going to invest in more risky properties you got to know what kind of investment you want being a mortgage rate or an equity rate doesn't necessarily change much when it comes to researching a reit it changes more of how the company operates like a g and c which i talked about earlier was a mortgage rate and spg which i also talked about is an equity read again i'm just giving you these reads as examples i'm not telling you what to invest in but once you understand what the different kinds of reits are that's when you can look at what these reits actually invest in some equity reads so these are the reits that own and operate their own real estate will invest in residential real estate so apartments and homes other reits will invest in hospitals other retail investment office space other reads will invest in malls ask yourself if you had an unlimited amount of cash what kind of properties would you want to own you do not i repeat you do not want to buy into a reit just because they're paying out a high dividend a really high dividend yield could mean that a company is making a ton of profit and the stock price hasn't caught up to it yet which is good and it could also mean that the stock price is tanking because the company is having problem and the dividend hasn't adjusted yet that is bad with mortgage rates you got to look at the same thing some mortgage rates will invest in mortgage-backed securities some will invest in commercial loans some will invest in commercial mortgage-backed securities and others will invest in high risk mortgages the mistake that a lot of people make when they invest in reits and this happens for any stock for that matter but especially in reits is that they think that they're investing in a ticker symbol as opposed to a company they think wow this stock is paying out a 10 annual dividend let me just throw all my money into the stock because i'm gonna make 10 of it back every single year but if you're getting a 10 annual dividend while the stock price is falling 20 a year you're in a losing situation but if you know what you're doing you have the opportunity to win twice because now you're going to invest into a strong company which means your dividends are going to go up because they're making good acquisitions and the stock price is going up because the company is becoming more valuable so now you're winning twice now if you've made it this far in this video and you're thinking to yourself man i would really like to invest in reits but i don't trust myself to do the research or i don't know how to do the research or i just don't want to spend the time doing this research then you may want to consider investing into a reit etf an etf is a fund that invests in a whole bunch of different stocks so now instead of you going out and trying to find the best rate to invest in you can invest in a reit etf which is an etf which invests in a whole bunch of different reits this would be like investing in vnq again i'm not telling you what to buy just giving you an example vnq is an etf that invests in reits so now if you bought shares of vnq you will have exposure to 180 different reits because vnq is a fund that invests in more than 180 different reads so reads are a way for you to get exposure to the real estate market without having to actually manage and operate your own real estate investment properties and unlike crowdfunding reits allow you to access your money whenever you want and like with everything else if you want to make the smartest decisions with your money it helps when you're staying up to date on what's happening in the finance and business world and if you're looking for an easy way to do that well that's why we created the free market briefs newsletter which is our minority mindset finance and business newsletter where our team first breaks down the top finance and business news and then we show you how this news affects your wallet that way you can be smart with your money this market briefs newsletter is completely free and you can subscribe to our newsletter by clicking the link up here or by clicking the link in the description below by the way our financial news emails are separate from financial education emails before we get into the next clip if you are interested in learning more about how to manage your money and invest your money the right way you can read our free guide on money management and investing and if you want to read that i'll put the link where you can download this free guide in the description below [Music] the stock market is a place where you and i can go and invest in companies like if you really like chipotle or you'll be like mcdonald's you can go and invest in these companies and buy shares in these companies and then you become one of the owners of these companies then once you are one of the owners of chipotle or mcdonald's or one of these companies if they have a big profit at the end of the year they will distribute some of this profit to their owners as dividends you can think of a dividend essentially as a profit sharing check if a company has a bunch of cash in their bank account at the end of the year there's three things they can do with this cash they can save it they can buy back their own stock which makes the stock price go up or they can give this money to their shareholders their owners you the people that own their stock as a thank you for investing in their company not every company pays a dividend like you're not going to see a lot of tech companies and growth companies these startups pay dividends because these companies are investing every extra dollar they have back into their company because their goal is to grow as big as possible as fast as possible so the companies that pay dividends are typically your larger kind of more stable companies however dividends if you do them the right way can be a great way to create a new passive income stream or even replace your current job income if you know how to do it the right way so let's calculate how you can get enough passive income from your dividends that way you can replace your job income now before we do that i need you to do me a quick favor and smash that thumbs up button below because the way the youtube algorithm works if you do not smash that thumbs up button then youtube is much less likely to show you and other people our financial news and education videos all right let's say you make 60 000 a year from your job so if you want to replace your job income with dividends you need to make sixty thousand dollars a year passively from dividends now let's assume that dividends pay a three percent annual return a year so for every dollar you invest in dividends this company is going to pay you three cents in dividends that means if you wanna make sixty thousand dollars a year with this three percent return and dividends you're gonna need to invest two million dollars right now to make sixty thousand dollars a year in passive income from dividends now before you get angry and say but just breathe i don't have two million dollars let me go smash that thumbs down button well we're not done yet as you can see this video has a lot of information left if you wanted to go out and get the sixty thousand dollars a year in passive income from dividends today and the stock is paying you three percent a year then yeah you're gonna need two million dollars in cash to buy shares of the stock that way you can get a three percent return which is sixty thousand dollars a year but this isn't the only way to get this dividend money now to get an idea of how much companies actually pay in dividends let's take a look at some numbers so a t pays out a dividend of seven percent a year annually at the time of recording this video verizon pays about four percent a year annually pepsi pays about 2.9 a year annually and mcdonald's pays a two and a half percent dividend annually that was just to give you an idea of what types of companies pay dividends and how big these dividends are but you should never invest in a company solely because of the size of the dividends i'll show you why let's say this hypothetical company is trading for a hundred dollars a share right now and it is paying a five dollar annual that's right div five dollar annual dividend so based off of this current share price that means this company is paying a five percent annual yield because for every hundred dollars you invest you get five dollars a year in dividends now let's assume that this company starts tanking it does not do very well and it starts losing money and the price of this stock falls from 100 a share to 50 dollars a share now if they haven't adjusted their dividend price yet because they haven't gotten to that point in the calendar year then what you can see happen is they're still paying this five dollar dividend because they haven't adjusted this yet and based off of the numbers they're paying a 10 annual dividend right now but the part that you're missing is that this company has fallen from 100 a share to 50 a share because they're having internal problems they're losing money and maybe they're on the verge of bankruptcy who knows so you should never invest in a company just because of what dividend deal they're offering because there's a lot more to it than that sometimes a company's dividend is going to look artificially high because the share price has dropped drastically so now back to the original question how do you replace your income so let's say this company is trading for a hundred dollars a share and their goal is to pay out a three percent annual dividend well off a hundred dollar share price that means they're going to have to pay three dollars a dividend i'm gonna do div three dollars per share for this dividend so for every share you buy you're going to get three dollars now again if you wanted the sixty thousand dollars today you're gonna have to go in and buy two million dollars worth of stock but i'm going gonna assume that you don't have two million dollars in your bank account to throw into this random company the interesting thing about dividends is that they compound and they grow let me start by talking about how dividends can grow when you invest in this company if you paid attention to what i said earlier you're not investing because of what their dividend price is you're investing because of how strong the company is you're investing because you believe in the strength of this company and what they're producing maybe they're innovating some new technology maybe they're creating some new guacamole that everybody wants who knows they have this product that everybody wants that you think is going to grow so let's assume you buy in at a hundred dollars a share and then five years go by and then this company starts to make more money and what happens is over those five years it goes from 100 a share to 200 a share so now what has happened is you have already just doubled your wealth in the stock you might feel pretty good here but you have to remember if this company is paying dividends they might want to attract more investors who want to buy into this company because of their dividends and if they're paying three dollars a share for the dividend at a 200 stock price that's not a three percent annual dividend that's a one and a half percent dividend so if they want to maintain this three percent annual dividend they're going to have to double how much money they're paying out in dividends too which means now they're not paying three dollars a share they're paying six dollars a share in dividends but you didn't buy the stock at two hundred dollars this year you bought in at a hundred dollars a share so yeah while the people that are buying it today are getting a three percent return on their money you bought in here so you're actually getting a six percent return on your money because you bought the stock for a hundred dollars a share and now they're paying you six dollars a year in dividends per share that you own so if this company is making really good guac and the value of their company doubles you're going to see the stock price double as well which means you have just doubled your investment but if they want to keep attracting these investors who are investing for dividends they might have to raise a dividend price and if they want to keep it at this three percent annual yield they're going to have to double their dividends but we're not done yet because i want you to be a long-term investor because the investors who make the most money are the people who have the long-term mindset and so now let's assume this company continues to make new guac and they create this new guac variations and now five years later this company doubles again so now they're not trading for two hundred dollars a share they're trading for four hundred dollars a share and so for the people that bought here yeah they double their money but you are not quadrupling your money because you bought an early and so now let's look at the dividends if they want to keep this 30 dividend yield because they want to keep attracting those dividend investors what are they gonna have to do they're gonna have to double this dividend price from six dollars a share to twelve dollars a share you bought in when they were paying three dollars a share in dividends now they're paying twelve dollars a share in dividends you bought in when they were paying a three percent dividend yield now it's going to be a 12 yield based off of the investment you put in initially so if you bought into this company at this point and you held your stock for 10 years and the stock doubled twice and they wanted to maintain their same dividend yield now you're making a 12 return on your money at a 3 return on your money which means you just 4x the amount of money you're making in dividends by doing nothing except holding the stock and these returns really are not that unreasonable remember we're talking about a 10-year span so we're talking about a decade it is not unreasonable to see a company double their share price twice over a span of 10 years is this guaranteed no of course not investing has risks you are never guaranteed to make money when you invest you might even lose money maybe this company will go bankrupt but you are never gonna make any money unless you take a risk and this is not an unreasonable never heard of returns these type of returns do happen but you have to remember this is not something that happens over six months or a year we're talking about a decade now if we go back to the original example where your goal is to make sixty thousand dollars a year in dividends originally it took you two million dollars over here if you bought two million dollars worth it would take you that much money in order to get a three percent return which would give you sixty thousand dollars a year now if the company you invest in follows this type of growth where they can double twice and the dividend value doubles twice over the course of you holding it now you don't need to invest two million dollars to get the sixty thousand dollars a year you need to invest half a million dollars five hundred thousand dollars because now if you invest five hundred thousand dollars at this price and the dividends go up to twelve percent now this twelve percent return on five hundred thousand dollars worth of invested cash is going to give you sixty thousand dollars a year and now you might be thinking just breathe i didn't have two million dollars to invest to get the 60 000 a year and i also don't have half a million dollars sitting in my bank account to invest to get the 60 000 a year well we're not done yet i'm going to show you how you can scale up your investments slowly that way you can get this goal of building this income stream from dividends that way you can replace your job income it is not something that happens overnight this is a long-term process so let's talk about how you can scale your investments up but before we do that i want to talk very briefly about how you actually get dividends in order for you to get these type of dividends you have to invest in companies on the stock market and in order for you to do that you have to use a stock brokerage that lets you invest in companies and you also want to make sure that the stock brokerage also lets you reinvest your dividends automatically that way you can accelerate your growth i'm going to be talking about that in just a second but one of the most important things when it comes to getting this type of dividend growth is to consistently keep investing into the dividend stocks that you want and you want to make sure your brokerage can automatically do this for you which is why i recommend you use something like a sponsor m1 finance m1 finance is a tool that lets you passively invest in stocks for free and they also let you passively reinvest your profits from the dividends back into the stocks that way you can get more dividend profits the way it works is very simple all you have to do is create a free account with m1 finance and then you can create this pie which is a portfolio of stocks or funds that you want to invest in now every time that you invest money into m1 finance or every time this money is automatically invested into m1 finance because you can create a system where every week or every month money is automatically invested into your stocks every time this money is invested now it's automatically going to be distributed amongst your stocks and funds then when a company that you invest in pays a dividend you can either have this money deposited into your account that way you can use this money and go and buy a nice dinner or you can use this money to buy back more stocks this is called drip drip the dividend reinvestment plan and m1 finance doesn't charge you a penny to do that that way you can accelerate your growth and get more dividends this is a great tool for those of you that are looking to build a dividend income passively because now it happens mindlessly your money will automatically be invested and your profits will automatically be reinvested that way you can grow your dividends quickly plus it's free to create an account and they don't charge you a penny to make a trade so if you want to learn more and start investing passively that way you can build this dividend income i got the link to where you can do that with m1 finance in the description below minority mindset is a paid partner with m1 finance so if you use them we will get compensated but there's no additional cost to you it's free to create an account and they don't charge you a penny to invest your money so if you want to learn more and start investing passively with m1 finance i got the link to how you can do that in the description below so we talked about how dividends grow and we talked about how you can invest in dividend stocks now let's talk about how dividends can compound so we're going back to this hypothetical example of a company trading for a hundred dollars a share that's paying three dollars per share in dividends which is a three percent return if you come in and you buy five thousand dollars worth of the stock that means you're buying 50 shares so if you buy 50 shares and each share pays a 3 dividend that means after one year you are gonna make a hundred fifty dollars passively in dividends now when you get this 150 dollars i hinted at this a minute ago there's two things that you can do with this 150 one thing you can do is go out and eat a nice dinner so i'm gonna draw you a nice plate of food this does not look like food but this is a nice plate of food so you can go out and use 150 and buy some dinner i'm clearly no bob ross the alternative which you can do is you can take this 150 and use it to buy more shares of the stock well i guess this error should go over here to the number of shares you have but you can automatically have this money that you just got to go out and buy you more shares of the stock now what's going to happen is you're not going to have 50 shares of the stock you're going to have 51 and a fraction shares because if you use something like our sponsor m1 finance you can buy fractional shares of a company which means next year if assuming the stock price doesn't change you're not going to make 150 you're gonna make more than 153 dollars three or four dollars might not seem like a huge difference in the scope of one year but you have to remember we're doing a few different things here first we're going to be buying shares of the stock every month or every week okay so you're going to be accumulating more shares consistently second we're buying into a company that we believe in for the long term so we're hoping that the share price is also going to increase which would also drive this dividend price up and third the money you make from dividends every year is also going to be buying you more shares so that means you're accumulating more shares three ways you're going to be accumulating more shares just because every month or every week you're putting more money into this investment that way you can accumulate more dividends second every time you get paid from dividends you're going to be using this money to buy you more shares and third assuming that share prices go up and you get bigger dividends you're going to make bigger dividends which allow you to buy back more shares too so the name of the game now is accumulating equity or shares or ownership in this company because you believe in this company and the more ownership you have in this company the bigger the dividends are that you get so when you combine these three things first you're investing into a company that you believe in which will hopefully cause appreciation in the stock price which will make your investment more valuable and will hopefully drive your dividends higher second every time you get paid dividends you're reinvesting this money to accumulate more shares and third every week or every month you're using more money to buy more shares of the stock so every time you get a paycheck a little portion of your paycheck is going to go to buy you more shares of the stock that way you can accumulate more equity more ownership that way you can get more dividends if you do that you're not going to need two million dollars invested to get you this return because of all the things i just talked about you're not even going to need the 500 000 figure that i talked about if you do this you will be able to reduce the amount of cash that you need to do this to get this income that you need to replace your day job income by another 10 percent or 20 or 30 percent but the key is this is a long-term play this isn't something that's going to happen in six months or a year this is something that's going to happen over the course of 10 15 maybe 20 years and you're gonna see that real growth towards the end because then you're going to be able to accumulate more shares much faster it starts with your mindset the goal is long-term wealth creation and in order to do that you need to accumulate equity or ownership in this company if you enjoyed this video here's a video on investing that i think you'll love and while you're at it download a free guide and invest in your money in the stock market and as always keep hustling but in the long run what really affects the stocks price is its fundamentals that's how much money is the company making how are their profits looking are the revenues growing are the profits growing how is the management and are they innovating for the future so these are the things that really affect the company's stock price over the long term

Channel: Minority Mindset

Views: 462,477

Keywords: minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, passive income, passive income ideas, passive income investments, passive income lifestyle, build wealth, become wealthy, investing 101, investing, stock market investing, stock market investing for beginners, dividend investing, dividend, stock market dividends, reit, investing in dividend stocks, dividend stocks

Id: ab9G_MHCXFE

Length: 88min 8sec (5288 seconds)

Published: Sun Apr 04 2021