I've read a few books and articles about improving one's finances, especially some by Robert Kiyosaki. It seems really important (or at the very least, really interesting) to build what Kiyosaki calls "passive income".

The simplest example is buying apartments and homes and renting them out in order to have a constant flow of cash. This requires a large initial investment which makes it difficult for a 22 year old like me.

I have wondered: Are there ways to create small but "duplicable" passive incomes? I haven't been able to find anything meaningful on the internet.

Silly example: Let's say I invest 100$ this month, seeking a reasonably reliable income of 4-5$ every month forever. I'll repeat this every month so that in 20-25 months I will be receiving a monthly active income of 100$ and it will keep increasing (the numbers are random, tweak them if they're too optimistic).

Bonus points if this "income" would go straight to my bank account rather than an investment fund where I cannot withdraw money for a few years.

If it's relevant, I live in Italy.

(I read the other questions about passive income on SE but the answers either involve a huge initial investment, violate the preference for cash flow that goes straight to my bank account" or simply aren't clear in the "how".)

  • 11
    A $5 monthly return on $100 invested is totally unrealistic. $5/year is more realistic. Oct 2, 2018 at 12:48
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    If you are middle class person; do not read the author you mentioned too much. I really love his only first book. Rest are crap and unrealistic.
    – Aastik
    Oct 2, 2018 at 12:52
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    earlyretirementextreme.com; mrmoneymustache.com. By the way; i have read most of his books. It is near to impossible for me to implement those suggestions being I am middle class. Not everyone can start a new business each year.
    – Aastik
    Oct 2, 2018 at 12:57
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    You are best to purge t Kiyosaki's teaching from your mind. He is a charlatan. Do a search to see how wrong he is.
    – Pete B.
    Oct 2, 2018 at 13:09
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    Kiyosaki's model has a certain risk of collapse. It might be wise to consider he makes a ton of money touring his self help conferences. Anyone with the golden ticket doesn't just give the answer away for even a small fee.
    – Kai Qing
    Oct 2, 2018 at 17:11

6 Answers 6


Yes, there is a way. It´s called investing where you buy stocks, bonds, funds, etc. in the right portion of a company, rental objects, raw materials etc. for your budget and risk appetite.

Be warned that passive income is a bit misleading. Make sure you have the expertise to avoid making a bad deal and losing all your money. Some initial investment of your time is required. Then you'll have to look after your investment.

With rental property, you'll have to do repairs, prepare utility statements, find new tenants and you might have to go to court if the previous tenants destroy your flat or leave before the lease was up (unpaid rent).

Probably as passive as you can get is to find an index-fund suitable for you or pay for your mortgage so you can live rent free one day.

All in all, it is more like a bet - as your income is not in a fixed relationship with your investment. If you are lucky, you can get good returns. If you are like the vast majority, you will not get rich and would have been better off just working a regular job.


Since you're using small scale in your example, let's consider what I'd call a micro passive product.

I often find small pockets of time where I can't go anywhere or do anything per se. I have young kids so think house arrest. Right now, mendala coloring books are a thing. Anyone with Adobe Photoshop or Adobe Illustrator can eat up a little of that time while binge watching some Netflix show. Draw some mendala coloring pages. Sell them as digital downloads on Etsy or Ebay. They only make about $.75 each (listed for 99 cents), but the sales trickle in. Depending on your skill, you could rack up quite a few designs - say 500 or so - and your trickle would be pretty impressive.

Mendala pages are just an example. Just a little trolling on etsy and ebay will show you how many different digital download items there are out there and nothing at all from stopping you from joining the group.

Now, this may appear as up front investment and inarguably it is. But not quite like publishing a book. We're talking an hour or two if you're skilled for each unit. Each unit immediately goes up for sale, and only comes down when you say so. You build small blocks of your trickling income a couple hours at a time on your own schedule and just keep piling on so long as you feel it is worth your time.

If you can't draw, then there are many other solutions that are digital downloads. You just have to put some effort in finding what works for you.

Geographical location is irrelevant to digital downloads so your being in Italy will not affect the viability of the plan or product.

This is no different than any other financial strategy - this should not be your entire plan. Times change, and so will the hot download items. Diversify, use the profits form this to build up other investments, etc. Nothing wrong with property so long as you heed the warnings from others. My family has rentals, they are often unoccupied and destroyed by the tenants. They make a decent amount monthly, but when they dont, they cost a decent amount. A good property management company can alleviate you from the headache, as well as a chunk of the profits.

Think SMALL - very small. Make your profits in change and always assume anything over even a modest 5% is probably risking more than you want from a passive source. Physical, non-passive investment has paid hundreds or thousands of percent for me and require little more work than the passive method. Often, it is just a matter of saying - what do I want, and why can't I provide that for others.

Good luck. I'd be interested in hearing how this pans out for you.


There are essentially two approaches here, for passive income.

The first is where you do a lot of work up-front, then receive passive income indefinitely, or at least for a period of time. An example here would be to write a book or write a software program which doesn't require further work. In general, this approach will require substantial up-front work but with the hope that you'll receive income for a prolonged period of time. Note that the two examples I gave here are fairly risky; the vast majority of authors never make money past their initial advance, for example.

The second is where you do no work up front, or only a minimal amount. Instead of investing time, you invest money. A good option here might be to buy stocks where you expect to receive dividend income. A better option would likely be a mutual fund or ETF that primarily invests in dividend stocks. Picking one (Canadian) bank more or less at random, Tangerine offers the Tangerine Dividend Portfolio. Note that I make no claim that particular fund would be good for you. Instead of investing for dividends, you could just invest in a mutual fund that covers stocks and bonds. You won't get dividends (or not many, anyway), but you'd hope the mutual fund would increase in value over time. Don't forget, though, your investments can do down in value in any given month or even over much longer timeframes.

If you don't want to take that route, just storing your money in a high interest savings account or investing in GICs or Treasury Bonds would be safe and would provide passive income. For the safety, you give up substantial expected returns.

Note that none of these investments will return 5% per month. Savings accounts will likely return 1% or 2% a year, other investments have a higher expected return. 5 - 10% per year is going to be just about the most you can realistically expect, and frankly, you'll be in the low end of that if you are looking for passive income.

  • 3
    Promoting a book or promoting and supporting a software program is far from passive, even after the initial work is done!
    – Daniel
    Oct 2, 2018 at 13:07

I will use totally made up numbers just to show a way to "small PI".

For example having an apartment for renting will require you have x$ upfront to even talk about mortgage. We assume that future rates will be paid from rent while giving you small amount of money you set up for repair and maintenance or to pay for rates when you don't have a tenant. Until the mortgage is paid off you cannot talk about having a passive income. So you need x$ to start and let say 10 years until apartment generates income for you.

Now split that x$ by 4. Invest in 1, 3, 6- month and one year bonds. You have small but real passive income after first month. Some bonds are auto-renewal so you won't loose a day when your money is not working. And every 3 months you get another one gain.

Of course you cannot expect to have 5$ a month from 100$. That would require annual interest rate to be around 60%. Keynes calculated in November last year that Bitcoin AIR is around 57%. And then it plummeted. Because this type of investment is very risky.

What you need to remember about passive income is that it's not for NOW. You work now for the passive income in the future. You work now to have that X for mortgage, then wait few years to have passive income. You invest in bonds or others things to start snowballing to have significant result in few years (so when the yeld is equal to the amount of your first investment).

You have to have in mind that the bigger promised earning the bigger the risk. Bonds are safest (because backed up by government) and have the lowest interest. Then you have savings accounts (backed by banks so a bit riskier). You can invest in software. For example on Fig.co you can invest in game development but it may be a flop, people may not buy it. Owning a flat is somewhere in between because when the place is paid off, even if not rented, it have value on it's own. You can sell it and move around the profit.


It sounds like you are after something like a life annuity. These are typically associated with pensions, although depending on where in the world you are there may be products available pre-retirement.

The idea here is just as you say: you give a provider a one-off lump sum, in exchange for an income for life. The provider makes an actuarially-informed guess about how long you are going to live, and offers you an income which they think will result in a profit for them (taking into account that they will have the lump sum to invest as they please, the whole time).

Speaking very generally, annuities are not regarded as particularly good value for consumers, but this is of course opinion. Taxation policies for annuities vary wildly across the globe. And of course inflation will destroy the value of the income over time, unless you index-link, which will reduce the nominal amount you get.


You could buy blue chip type stocks that pay a good dividend or look into an ETF/mutual fund that invests in those types of stocks. You have the risk that you encounter in the stock market but if you invest in more stable things like utility companies the value of the stock won't change much (for better or for worse) and it pays a steady dividend. If you are only investing small amounts of money at regular intervals you would be better off with an ETF/mutual fund that you can buy commission free, otherwise you are going to be paying a lot in commission over the years.

You could also buy US treasury bills which will likely pay a slightly better rate than online savings accounts.

At 22 you can stand to take on more risk for long term investing though and it would make more sense to put your money in a low cost index fund as long as it is not something like your emergency fund. Even though there will be some down years, over the course of your life the return from that type of investment will trump any safe passive income type investment. That will likely give you a better chance to invest in some rental properties like you mentioned in the OP because when you get older you will have a bigger portfolio.

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