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I have touched on that I run a couple of business ventures outside of my full-time job. And there are some very important points to drive home:
- These ventures require a lot of time to start up and maintain
- Two of them offer passive income
- Make sure you’re able to properly manage your time for these businesses
The first thing I should explain is the concept of “Passive Income.” Essentially, passive income is money you’re able to generate without directly working for it. For example: I have written articles for Vocal Media, which is a submission-based platform where income is generated from views on the article. Within my first month, I calculated that I worked roughly 75 hours on writing, editing, and promotion. There are about 720 hours in a thirty-day month. That means I only spent a little over 10 percent of my month on my articles, and I generated about $5 my first month. But considering most of my views came from when I wasn’t working, roughly 60 percent of my revenue was completely passive. Now, $3 doesn’t sound like a lot, and you're right. That’s about a gallon of gas or 60 percent of a Starbucks coffee. But that $3 over a 645 hour period of you not working made your time slightly more valuable. That’s an extra $36 dollars a year in passive income ($60 total income), suggesting that you don’t release more articles and don’t keep practicing your promotions. I’ve been doing this for about a year now, and have since been able to cut my time working on the project from roughly 75-80 hours a month to around 60-65 hours a month. I still release content regularly, but due to the sheer number of articles I’ve released and the promotional work done for them, roughly 85 percent of revenue is completely passive, meaning that if I were to take a month off from writing at this point, I can still expect to make enough from it to cover my gas for the month. Or, I could take a few weeks' vacation from my full-time job and not fall behind on my bills.
The other form of passive income I have is running a small music label. Here’s what I do: I bought a subscription to an online music distribution service, and put my label name on it. I tell artists that I’ll put their music online for a $15 flat fee, and 50 percent of the revenue. This is appealing to a lot of indie artists since they don’t have to manage the financial or distribution aspect of their music, and it’s cheap. Since I’ve started this project, about 30 people have used my service. But when it comes to passive income, especially music, a large pool helps a lot. Naturally, some aren’t going to draw in as much attention as others. But to my advantage, the total amount of streams (and downloads, but nobody buys music anymore) per month generates about $150 for myself. That more than covers the distribution costs, and leaves me with about $1,700 in profit per year that I can use to my heart’s content. Though I do prefer to save it for another venture that brings in a substantial amount of income, Day Trading.
Now when I say “Day Trading,” I’m not talking about the formalized stock-investment ordeal with three computer monitors, fancy graphs, and thousands of dollars constantly on the line. When I say “Day Trading,” I’m talking about quickly purchasing and selling small, volatile stocks within a few hours of each other. I’m too cheap to invest in all of that equipment, so what do I do? I use an iPhone app called Robinhood, and I carefully watch the stocks I’ve invested in. I purchase them a little after the market opens (they tend to be at their lowest at that point), and then sell them when I have a safe margin of profit. I then use those profits to invest in more valuable stock later on, and repeat the process. It did take a lot of studying and practice in order to do this, and it’s not easy. Despite its quick turnaround process, it takes patience. But once you’re confident and you develop a decent amount of purchasing power (I started with just $20), you can begin building a nice source of income. I’ve been doing this for about two years, and it only takes up about 1.5 to 2 hours of my day. I make an additional $5 to $10 dollars a day on average; a few times I’ve made up to $20, which is great in terms of covering small, unexpected expenses. Considering in that two years of just putting in a couple hours a day into the project, I’ve generated about $2,600. The best part of this process is, you can do it anywhere. You can buy a few shares during your morning coffee, check them after your shower, drive to work and sell them when you sit down. Or, you can have your phone sitting next to you when you’re working at home.
Now, how can this makeshift Day Trading help you, besides the extra money? Well, I didn’t have dental insurance until about four months ago. The residual income from this venture allowed me to still get my teeth cleaned twice a year without needing to dig into my savings. It also can grow very easily. I recently invested an extra $50 into my portfolio, which means I can buy more valuable shares, which means potentially more profits. If I were to do this for hours a day and invest more money, it could possibly become my full time gig. But I choose not to do that since it could potentially drive me mad with all the numbers. For now, it’s a very good source of extra money!