36

I work 3 jobs totaling at 52 hours weekly. I don't have anything of value that I can sell for money. I put $10 into penny stocks a few weeks ago, but they don't gain much. I'm 25, and my savings is about $300. What can I do aside from working to make more money?

  • 29
    People who tell you "you must have passive income" generally get their income from whatever you're supposed to do to generate your passive income. This is not to say there's no such thing, or that it's not terrific. More a case of being careful who you listen to. – Kate Gregory Nov 10 '15 at 18:59
  • 5
    I would make sure you have an emergency fund set up. The traditional wisdom is 6 months but I personally like 10 months. "Invest" that $300 monthly until you reach that emergency fund goal. Once that is met you can start looking at doing something you love and enjoy as passive income. Writing, baking pies, whatever it maybe but if its something you enjoy and love you aren't really working, which is where the "Passive" comes from. – T. Thomas Nov 10 '15 at 19:18
  • @TdotThomas I've heard of that and have been making progress. I've only been saving since October but I only can afford to save about $20-$40 per paycheck as my tuition and other bills tend to eat up the rest. – Callat Nov 11 '15 at 14:10
  • 4
    @TdotThomas Writing, baking pies... that is not passive income, that is work. – Zenadix Nov 13 '15 at 16:18
  • 1
    @Zenadix not if you enjoy it. The definition of passive income is subjective. What you might consider passive income might be work to me and vice versa. Income from anything still requires "work" be it in management or research or any other number of things. I'm going to bake 30 pies a day anyway might as well sell a couple. – T. Thomas Nov 13 '15 at 16:42
57

There isn't any place you can put $300 and turn it into significant passive income.

What you need to do instead is manage the active (work) income that you have so that your money goes farther, freeing income up for reducing debt and investing. Investing $300 one time won't add up to much, but investing $100 a month will turn into wealth over time.

Making a monthly budget is the key to managing your income. In the process, you'll find out where your income is going, and you can be intentional about how much you want to spend on different things in your life. You can allocate some of your income to paying down debt and investing, which is what you need to do to get ahead.

For some general guidelines on what to do with your money first, read this question: Oversimplify it for me: the correct order of investing. For more specifics on creating a budget, eliminating debt, and building wealth, I recommend the book The Total Money Makeover by Dave Ramsey.

  • 11
    There isn't any place you can put $300 and turn it into significant passive income. @Hikari for comparison, $300 would buy you around 6 shares of VZ or 9 shares of T, from which you might get $15 in dividends in per year. And you still bear the transaction costs and risk of capital gains/losses. – Michael Nov 10 '15 at 18:59
  • @Michael and anybody else, Is there even a brokerage that will let you be a member with no more than $300? – Dean MacGregor Nov 10 '15 at 21:17
  • Sharebuilder (capitaloneinvesting.com) lets you buy partial shares of stocks with a low starting investment. You can purchase monthly dollar amounts of stocks (dollar cost averaging). – Arluin Nov 10 '15 at 22:20
  • I did have a scottrade account before but I don't use it because of the 7.50 commission fee. The only investing I've done lately is on the app robinhood. @Michael since it's completely free. – Callat Nov 11 '15 at 14:02
  • 3
    @Hikari you really should not be into investing anytime soon, at least not into anything other than yourself (in a broad professional / health sense, including enough time to rest). If you are professionally successfull, things will automagically get better in 5..10 years, and if you manage to limit the growth of your expenses, you will have enough money left to worth your time thinking what to do with. – Eugene Ryabtsev Nov 12 '15 at 16:57
26

To generate a passive income you need lots of TIME or MONEY, you are short of both.

As other people have said, do whatever you can to reduce you spending and start saving. Don’t think “I work very hard, therefore I deserve xxx”, start thinking “x cost y hrs of work, is it truly worth it?” (Remember to consider your take home pay per hr, not you before tax pay!)

What would it take to get paid more per hr in one of your jobs? Maybe investing a little time/money in training would increase your pay. Doing your job a little better can often lead to a good outcome.

(I see from your profile that you are a new computer programmer; I assume that one of your jobs is programming, if so put your time and effort into it. As you become more skilful within a few years you will start earning more. Maybe even give up one of the other jobs by spending less so you can do better at programming)

Then as your incomes goes up, don’t allow your spending to increase, save the additional money.

  • Your right its just hard since I'm paying off tuition to re-enroll in school and bills at the same time. @Ian but if I did work more from home I'd finish projects faster and move up. But my time at home is so little. I'm lucky if I have time to make 2 meals a day. – Callat Nov 11 '15 at 14:04
  • 3
    @Hikari, the main point is that a "passive income" should not be your aim until you can earn more working for less hours, or spend a lot less. – Ian Nov 11 '15 at 21:12
  • 4
    Don't even consider the take home pay; rather, consider the take home pay adjusted for mandatory expenses for earning that income. The obvious example of this (which probably isn't relevant in the OP's specific case) is if you need to have a car to get to and from work; then you need to subtract all the costs of owning, maintaining and driving that car (to and from work) from what you get paid for doing that work. The "true hourly wage" when considering things like this is often significantly lower than your pre-tax pay, but it's the number you need to consider for the "x hours of work". – a CVn Nov 12 '15 at 20:47
2

This is a supplement to the additional answers.

One way to generate "passive" income is by taking advantage of high interest checking / saving accounts. If you need to have a sum of liquid cash readily available at all times, you might as well earn the most interest you can while doing so. I'm not on any bank's payroll, so a Google search can yield a lot on this topic and help you decide what's in your best interest (pun intended).

More amazingly, some banks will reward you straight in cash for simply using their accounts, barring some criteria. There's one promotion I've been taking advantage of which provides me $20/month flat, irrespective of my account balance. Again, I am not on anyone's payroll, but a Google search can be helpful here. I'd call these passive, as once you meet the promotion criteria, you don't need to do anything else but wait for your money.

Of course, none of this will be enough to live off of, but any extra amount with minimal to zero time investment seems to be a good deal.

(if people do want links for the claims I make, I will put these up. I just do not want to advertise directly for any banks or companies.)

2

You're right to seek passive income and since you're already looking for it, you probably already know some of the reasons to why it is important.

Do you live in the United States?

If so I'd strongly recommend purchasing your primary residence and then maybe investment properties if you like owning your own home. The US tax and banking structure is set up to favor this move in more ways than I can count. So, SAVE, SAVE, SAVE then beg, borrow and steal to get the down payment, rent rooms to friends or random people to afford the payments, buy a fixer upper in an up and coming neighborhood. The US is rife with these in all price ranges.

If you're working 56 hrs a week, you've got the work ethic. So if you can't afford it it's probably because you're spending all your money on other stuff.

If you want to do this, it will take some effort, smarts, and savings. You will have to trim back the mochas, vacations, dinners out, etc, etc etc. Let your friends do that stuff and rent from you. Your life will get continually easier.

If you have already trimmed back all the discretionary spending and still can't make it then you need to earn more money. Doing either and both of these things will absolutely change your whole economic life and future.

So in summary I'd offer these Ranked Priorities: 1) Learn to Save (unless you always want to have to work for someone else) 2) Increase your income capability (since your most valuable asset is YOU) 3) Buy and hold real estate (because the game is rigged to favor passive income)

I'm 38, never earned a six figure salary, made some good purchases when I was 25-30 and work is "optional" for me now.

  • Are you really encouraging him to steal to get want he wants? – Ash Burlaczenko Nov 11 '15 at 11:04
  • 7
    @AshBurlaczenko no, he is using a phrase – JamesRyan Nov 11 '15 at 13:26
  • 7
    @scrappyJay thanks for your post. But the things your talking about cutting out are far from even existing. I've never took a vacation, I brew my own coffee and the only dinner I have is pizza on occasion when I don't have enough time to cook food. I'm saving $20-$40 per paycheck and the rest goes towards bills,debts,groceries etc. Real estate is probably not something I can get into for awhile. – Callat Nov 11 '15 at 14:08
  • 5
    @AshBurlaczenko - I assure you, even though I've used the phase, "I'd kill for a slice of NY pizza," I've not actually killed anyone. – JoeTaxpayer Nov 11 '15 at 19:07
  • 3
    Buying residence can be a trap. Will buyer be able to stay put for 10-15 years or more? What if buying on seller's market (and forced to overpay), and then you lose job and have to move in buyer's market (forced to sell for less)? Many people lost money on such non-liquid investment. I am surprised you never heard of the collapse of home prices. I agree that ownership is favored by tax code, but it is NOT a risk-free investment. – Peter M. Nov 11 '15 at 23:56
1

Learn to build software and create a product. The peoples will use your program, will pay you for that and you don`t need be there all the time. (Time is money) The software will work for you (In theory) and will can make how many copies you want. How many more people need you, more rich you get. Think about that.

  • 12
    That's not passive income. – blm Nov 11 '15 at 18:50
  • I know, but it`s works to earn money and is real! – user3490407 Nov 11 '15 at 19:42
  • 1
    The people who use the program will probably complain about bugs and ask for extra features, so even once its made its not passive unless you ignore them. – bdsl Nov 11 '15 at 20:35
  • 1
    I don't disagree that building a product which can be resold is a good idea. However, time does not automatically equal money. Investing time can yield pecuniary returns in the long-run, but that doesn't necessarily mean it's the right thing to do or that doing so will be successful. Time is often portrayed as a limitless resource, but that's not the case. – Cosmic Ossifrage Nov 11 '15 at 23:15
  • 3
    Working as a programmer myself, I can definitely say that there is nothing whatsoever passive about that. – a CVn Nov 12 '15 at 20:51
0

The things I'm about to suggest will not make you rich, or get you out of any financial holes. But they should be able to earn you some extra money, and for your situation it sounds like anything could help.

Have you looked into cash-back apps/sites that give you money back for making the purchases you already make?

For example, I personally use the apps Dosh and Drop. Dosh gives me a percentage of cash back for purchasing coffee at my local coffee shop (among other retailers). I don't get much from them, maybe a few dollars per month.

Drop is one I just recently started using. You pick a few places you normally shop at, connect your debit or credit card and earn points for every dollar you spend at that retailer. For Trader Joe's, where I do almost all my grocery shopping, I earn 12 points for every $1 spent. The points can be redeemed for gift cards to places like AMC, Best Buy, Amazon, etc.

1,000 points = $1, so the more you shop at the retailers you pick the more points you'll earn. You literally do not have to do anything to earn these points besides making normal purchases.

I see apps like these as a no brainer, because I'm already going to shop at Trader Joe's. Maybe it will take me an entire month to earn the 10,000 points needed for a $10 AMC gift card, but that's a movie you can go see with friends that might not have fit your budget before!

I'm not sure what your shopping habits are like, but if you do any online shopping, I'd recommend also using Paribus. It scans your email receipts (like Amazon purchases) and tracks the prices for what you've bought. If you bought something and the price drops a day later, Paribus will file for a refund of the difference on your behalf. I can't even tell you how many times I've bought something on Amazon, only to see the price drop the next week. This tool is seriously a life saver.

As I said above, these are some of the tools I personally use to help me earn a few extra bucks on the side without putting in any effort. I know it won't help you a ton, but it's better than nothing! Also, you don't have to put any money upfront for these, like you do with other passive income streams.

Let me know if you have any questions about how to use these sites. I hope they can help you out, even just a little bit!

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.