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Reply to "Passive Income Strategies"

I'm very interested in this thread topic, but it appears that maybe a definition is needed. Passive income, as I understand it, is income you make without working for it. I've been researching and thinking a lot about this. It's how rich people stay rich/get richer and how poor people stay poor. Again, as I understand it, there are basically two categories of passive income (unless you count inheritances, then there's three, or winning the lottery, there's four): investments and cash-back opportunities. Investments, to me, seem to fall into two subcategories: stocks and real estate. For any passive income vehicle, you have to have some amount of money to start it (why rick people make millions this way). I have a little and have been trying to figure out the best/easiest place to park it to let it sit and make more money for me.

I looked at apps that PH has written about, like Fetch, Acorns, etc., but it's literally pennies per month that you are saving and it doesn't accumulate fast enough and the work involved doesn't match the return on investment for me. Acorns' management fees make it ridiculous to me, and you have to maintain at least $5000/mo. in the account to get the management fee to where I want it---under 1%. Why would I pay 12% in management fees to save $100? I don't have any fees with a jelly jar on the kitchen counter, but then I have to think about it, and Acorns saves you the thinking. Still, I can think for myself for 12%.

So, I've been thinking a lot about REITs. The problem, if I understand the vehicle correctly, is that you don't get a say in what commercial properties are bought in what cities, so that's high risk to me. Somebody please correct me if I'm wrong here and you do get to make a lot of the choices in REITs, or if there are REITs out there that allow you to pick and choose cities/property areas.

So then, I started looking at cash back offers and high yield savings/checking accounts, but again here, when you read the fine print, you have to have like $10,000 sitting in the account(s) for at least a year to get $600, which ends up (if my math is right) to only a 6% gain, and that's only a one-time gain for the life of the account. Then you have to make sure you are active on the account(s) with deposits and withdraws each month, and again, it's a bust for me on work/thinking vs. return on investment. So, stocks look better than cash-back to me now.

So, then I started to realize that my biggest passive investment vehicle is my house, as it is with most Americans. We've started to think about how we can modify it for when our teens move out and rent part of it as a separate unit. With that, we could rent half of it for about the mortgage we pay, so that seems like a great passive investment to me. I think we will try this.

Another thing I've been thinking about is trying to save enough for a down payment on another house as a rental property. Unlike REITs, I know my city, my area, the real estate and rental prices, and the economy.

I've even thought about renting out our vehicles when we are not using them---like weekends for travelers---like VRBO for cars/RVs, but my hubby has nixed this idea as he thinks the liability is too high.

But I really want to hear about what other people are thinking about for passive income.