6 Powerful Investing Passive Income Ideas

  • investing passive income ideas

Smart investing is a sure-fire way to grow and diversify your income. But as discussed earlier, traditional investing generates ghastly returns. Let’s not waste time investing crazy amounts of money for measly monthly recurring revenue.

Instead, we should consider the following passive income ideas…

The Low-Risk High-Reward Investor

Almost sounds like an oxymoron, doesn’t it?

How can you invest low-risk and expect high rewards?!

I’ll explain:

My ramblings up until now on passive income ideas have been pretty critical of traditional investment strategies. And this critical nature is justified because most of these investments generate 2-4% annual returns, which just isn’t viable for most people.

Take dividend stocks as an example. Let’s say you decide to invest in Ford Motor Company.

They just happen to have a 5.15% dividend yield at the moment (which is very good for a div stock investment)

Here’s what you can expect to see for returns:

$85 bucks a month for a $20,00 dollar investment is hardly what you’d call substantial.

Granted, you can build up a respectable portfolio of investments through this strategy with reliable yearly payouts, BUT, you’re looking at decades before you really reap those returns.

And I don’t know about you, but I don’t wanna wait till 60 to become financially independent!

Looking for ways to invest large chunks of cash? Check out my best ways to invest 10000 post

How to invest like Warren Buffet (without putting billions on the table)

This form of investing involves putting your money into assets that have spiralled down in share price due to falling out of market favour.

But assets with solid foundations that suggest a rebound over the next few years.

It’s a strategy that’s based on situations where the market has heavily mispriced an asset with potential for huge 5-10x gains as it rebounds over the coming years.

The technical term for this is called “asymmetric investing”.

Now, I know it sounds super complex. And well, it really is. But I’m gonna break things down in jargon-free terms so you can wrap your head around these powerful strategies.

The best part?

I’ll show you exactly how you can leverage the best asymmetric investing opportunities, without spending ten years learning how to pull it off yourself.

So what the heck is asymmetric investing and how does it work?

Asymmetric investing get’s this name because of the typical rebounding trends of assets in terms of share price value over the course of a few years.

At any given time, you’ll find company shares priced up to 90% lower than previous highs.

This means the cost of entry is much lower, relative to what you can potentially earn back when you decide to sell in the future.

It’s asymmetric in nature.

Here’s an example of what an asymmetric investment looks like:

The first thing that naturally comes to mind is “there’s obviously a reason why something would be priced so low“. And you’re right in making that judgement.

But what’s important to note is that the market isn’t rational in the short term.

Identifying when this happens is the key to investing success.

In fact, it’s the exact strategy Charlie Munger (Warren Buffet’s business partner) uses himself, as he says:

“You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced.”

The important thing to note here is the ability to identify assets that are priced much lower than their average market value. Assets that are usually stable with strong foundations.

If we can find these assets, it’s possible to achieve those crazy 500% ROI’s.

But these type of opportunities aren’t for the faint of heart. It takes guts to invest in a stock that looks destined for doom.

And you can be sure that everyone around you will think you’re insane for investing your money into something that’s perceived as so risky.

What world-renowned investors think of this strategy

Warren Buffet is one of the most well-known (and successful) investors in the world. But more importantly, he’s an asymmetric investor. He invests in companies on a scale that most of us will never reach.

But that’s okay.

Because we don’t need $93.2 billion to live an incredible life.

What we can do is learn strategies from people like Warren Buffet and apply them on a smaller scale.

One of my favourite quotes from Warren is when he summarised successful investors beautifully:

“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”

And from Sir John Templeton, who was declared as “arguably the greatest global stock picker of the century” by Money Magazine:

“Invest at the point of maximum pessimism”

The points being made here relate to asymmetric investing because it involves putting your money down when everyone else thinks you’d be crazy to do so.

In essence, it relates to a saying that applies in so many areas of life for those that want to truly succeed…

Observe the masses and do the opposite.

You can only expect to see the incredible 5-10x returns if you invest when price is low and pessimism is high.

Check out one of Warren Buffet’s first substantial investments back in 1964…

This is the perfect example of a large-scale asymmetric investment — and one that catapulted Warren Buffet into new realms of wealth.

This was an investment Warren made with American Express shortly after something called the “salad oil scandal”.

You can read more about that here, if you’re interested.

How asymmetric investing can work for you

Asymmetric investing can be life-changing for the average joe because a small amount of money has the potential to go a very long way.

And the great thing is, you don’t need the asset to bounce back to it’s former glory to make a large sum of money. You just need things to get a little better.

A little better in most cases means doubling or tripling your money.

But there’s one major caveat to this entire form of investing…

Finding these opportunities is freaking tough.

Using Buffet’s American Express investment as an example. At the time, AMEX was in really bad shape thanks to the “salad oil scandal”. Their stock price had dropped by 40%. And the market hated them.

No-one in their right mind was buying American Express shares at the time. No-one, except Warren.

He knew the business would rebound soon enough because it had solid foundations.

So he invested almost half of his money to own a 5% share of AMEX — and we all know how that shaked out!

But how do you work out a solid asymmetric investment from a dud?

Being smart enough to outsmart the market and identify mispriced assets with asymmetrical risk to return potential is no easy feat.

And it also requires a seriously strong set of cajones. Imagine the amount of internal pressure when making one of these investments — especially if you’re doing it based on your own research.

The truth is that most people don’t have the emotional intelligence to pull something like this off.

It’s like Warren Buffet said in his quote… you need a temperament that neither derives great pleasure from being with the crowd or against the crowd.

And most of us tend to be heavily influenced by what the crowd is doing.

Even if you do know how to spot an asymmetric opportunity AND have the balls as well as emotional intelligence to pull it off…

It can be really tough to work out which specific options to go for.

And if you choose the wrong one, you can lose a lot of money.

So we’ve established that while the opportunity is huge, the execution is terribly tough.

But there’s always a solution — which brings me to my next point…

Investing like an expert — without spending years learning how

Don’t you just wish you had the investing expertise of people like Warren Buffet, Benjamin Graham or George Soros?

Wouldn’t investing be soo much easier if you could download their knowledge into your brain?

Well I can’t promise you that! But I can show you the next best thing…

Investing alongside experts who live and breathe this stuff on a daily basis.

You see, even if you could invest alongside titans like Warren Buffett — you couldn’t, in reality.

Why? Because Warren invests billions buying entire companies out-right. Not something the majority of us are in a position to do.

Furthermore, investing in Warren’s holding company, Berkshire Hathaway won’t yield outsized returns because of their massive capital base.

This is something that Warren has consistently warned Berkshire investors about.

Thankfully, there are a select few experts that you can follow for actionable advice on asymmetric investing. Well, I say a select few, I really only mean one from what I’ve discovered so far.

This person is a former investment banker and venture capitalist with decades of hands-on experience in asymmetric investments. He’s also been featured in publications like Market Watch, Business Insider and Real Vision.

His name is Chris Macintosh, and he’s a guy that can help you find some of the best investment opportunities on the planet.

Unfortunately, it’s hard to get access to people like Chris, and typically, his investment ideas are reserved for his own companies.

In fact, until recently, unless you had a couple million to invest, you couldn’t get access to his ideas.

Talk about exclusive access!

But this all changed when Chris decided to launch his investment newsletter: INSIDER

Here’s how he explains the newsletter in his own words:

“The opportunities shared (in INSIDER) will allow you to get in on the same investments being taken by myself in my hedge fund and those on my Rolodex of friends, some of the world’s elite investors. Usually, opportunities like these are reserved for industry insiders. And it’s very unlikely that your broker has even heard of many of them, and he’s almost certainly got little idea why you’d be doing them.”

In the newsletter, Chris breaks down his investment ideas into specific, granular details and shows you exactly how to execute each trade from scratch.

So this not only appeals to people familiar with the investment space but total beginners too.

And most importantly, ALL his ideas are asymmetric. Which means you can expect decent returns with the potential of up to 10x ROI — If you don’t have much to invest, this can make all the difference.

The future is bright for the outliers

As people continue to rely on traditional investment strategies in a market that’s only becoming more volatile and unpredictable — the opportunities for creating wealth from asymmetric investing have never been so good.

And whilst the majority of investors are probably headed for some serious pain in the near future — the smart minority will be raking in fat stacks of cash by exploiting asymmetric market opportunities that come up!

As Chris says himself: “the repricing of assets promises to be truly breathtaking

Which (ironically) makes it a very good time to invest your capital.

So if you have some capital to invest and you’re looking for a fairly hands-off passive income opportunity, I strongly recommend checking out Chris’ INSIDER Newsletter.

One thing to keep in mind is that Chris personally invests millions of his own money into his investment ideas. So this isn’t some random guru trying to sell you a subscription.

Just remember, there’s no guarantee of results, ever. And anyone that tells you otherwise is talking donkey doodoo.

INSIDER Isn’t for everyone

In some case, you should think twice before investing in the newsletter subscription.

If you have less than $5000 to invest, you should probably wait till you have more. And in the meantime, you could start a passive income business for much less that’ll increase your cash flow and grow your capital.

Go here to check out the Capital Exploits INSIDER Newsletter.

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The Silent Local Business Partner

Investing your money in local businesses can be risky. But if you do your homework properly, it can produce a healthy stream of passive income.

The key here is to find business owners that have already created success with their existing setup and are looking to expand. Sometimes they just need that extra cash flow so they can grow.

In return, you’ll get equity in the business. The great thing about this strategy is that you get to negotiate the equity stake, so it’s possible for you to land spectacular deals.

When it comes to investing in businesses like this make sure they pay shareholders on at least a yearly basis (owner distributions). Some businesses like to keep their profits in the company, not what you want!

The bottom line

A successful investment as a “silent” shareholder in a local business will provide a nice yearly sum of passive cash. Investing in the right people is crucial. You must do your homework!

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The Real Estate Investor

real estate passive income

You can’t go too far wrong with real estate investing. It’s one of the safest places to put your money and is a “go to” investment strategy for many seasoned entrepreneurs.

I’m talking about buying rental property here. Again, this is one of the passive income ideas where you really need to know your stuff if you want to succeed. So much so that many investors prefer to put their money with people who do this for a living instead.

Most people don’t have time to dig deep into the real estate markets. So they put their money with people who have the financial education, skill sets and experience to invest in the best deals.

Successful rental investments involve mastering the following:

  • Finding the right properties – Understanding what makes a perfect investment opportunity is key to finding them.

  • Leveraging good debt – Knowing how to leverage money from the bank as well as other investors will help maximise your cash flow.

  • Finding great tenants – Bad tenants can be a nightmare. There are certain demographics you’ll want to avoid when renting out your properties.

  • Finding the right properties – Understanding what makes a perfect investment opportunity is key to finding them.

  • Leveraging good debt – Knowing how to leverage money from the bank as well as other investors will help maximise your cash flow.

  • Finding great tenants – Bad tenants can be a nightmare. There are certain demographics you’ll want to avoid when renting out your properties.

Leveraging the bank’s money is the best way to invest your own money.

Here’s an example: 

I have $200,000 to invest in rental property. I can use “good debt” from the bank to mortgage these properties with a 20% down payment.

Let’s say I find five properties for sale all around the $200,000 mark.

These properties rent at $1500 a month. I could either put the $200k down and pay for one house in cash, or purchase all five properties with a 20% down payment of $40,000 each.

On 5% interest, the loan repayment would be roughly $1100 a month.

So, that’s $400 in cash flow from each property every month, resulting in a total of $2000 a month. That’s $24,000 a year in passive income. 🙂

These numbers are all super simplified and there’s a lot more to take into account but it gives you a rough idea on the ROI you can expect from buy-to-let investments.

The bottom line

Executed in the right way, rental real estate can be a reliable form of long-term passive income. Doing your homework is crucial to success with this strategy as you could easily lose money without proper research and guidance.

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The Airport Parking Investor

airport parking passive income

You’d have never guessed this one! Investing in airport car parking is a safe way to put your money away as the aviation industry continues to grow thanks to the growth in international travellers (in the UK).

It produces a higher ROI than traditional investment strategies. Up to 12%, in some cases.

Airport parking is estimated to be worth $12.5 billion annually, with demand regularly outstripping supply in the majority of UK airports.

Investing in parking spaces is similar to investing in real estate. You fully own the parking space(s) when you make an investment.

The great thing about parking space investment is that you don’t need to fork out insane amounts of cash. Over here in the UK, a typical investment for one space would be around $30,000.

Parking spaces have huge projected capital growth, thanks to massive market demand. Great potential for further increasing your return on investment.

The bottom line

Car parking investment is a superior alternative to investing in traditional stocks and bonds. The aviation industry is booming and is only set to grow further. Demand for parking spaces is huge so this is a solid passive income investment with respectable returns.

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The REIT

REIT stands for Real Estate Investments Trust. It’s a safe, reliable way to invest money and acquire ownership in houses, apartment complexes and commercial properties.

I’m not particularly fond of this one because the returns aren’t that great but it does offer a number of benefits compared to traditional investing.

There are two main types of REIT’s:

  • Equity REIT’s – Allow investors to own properties and generate revenue by renting them out.

  • Mortgage REIT’s – Allow investors to own mortgages, purchase them from lenders and loan money for mortgages. Profits received come from interest earned on mortgage loans.

  • Equity REIT’s – Allow investors to own properties and generate revenue by renting them out.

  • Mortgage REIT’s – Allow investors to own mortgages, purchase them from lenders and loan money for mortgages. Profits received come from interest earned on mortgage loans.

REIT’s are a great option for investors because:

  • Regular shareholder dividends – Required by law to maintain dividend payout ratios (amount paid to shareholders relative to company profit) of at least 90%.

  • Less tax – REIT’s pay zero tax on dividends paid to shareholders.

  • Less volatile – Great market track-record for long-term share appreciation and inflation protection.

  • Low capital requirement – You only need $500+ to start investing.

  • Regular shareholder dividends – Required by law to maintain dividend payout ratios (amount paid to shareholders relative to company profit) of at least 90%.

  • Less tax – REIT’s pay zero tax on dividends paid to shareholders.

  • Less volatile – Great market track-record for long-term share appreciation and inflation protection.

  • Low capital requirement – You only need $500+ to start investing.

Most REIT’s pay monthly dividends to shareholders. 4-7% is a typical return on investment. That’s $20 a month if you invest $5000 with a 5% ROI (see what I mean?). You need to invest big money to enjoy anything that comes close to respectable returns.

The bottom line 

REIT provides an easy-access passage to real estate investment. There’s almost zero work required compared to directly investing in property yourself. On the flip side, you won’t make anywhere near as much money.

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The Digital Business Investor

digital business investor

Want to run your own online business without going through the painfully slow startup phase?

Buying an existing business is your fast-track ticket. Why go through the torment of building a business from scratch when you can buy something that’s already generating moolah?

There are hundreds of passive income producing businesses for sale at any one time online. Flippa and Empire Flippers are the most popular platforms for people to buy and sell internet businesses.

Here’s an example:

This online cigar Dropshipping business was listed with no reserve price and sold for an astonishing $3000.

Wow.

That’s $3000 for a business that generates an average of $2200 in profit, every month.

Again, this site was an exception to the rule in terms ofprice as the owner was getting married and had to sell the business at very short notice.

The previous owner came up with the idea for the site when visiting a cigar lounge. He was presented with a whopping great selection of cigars and had no idea what to pick. So he created this little website as a hobby that offers a personal cigar recommendation service.

For a few thousand dollars, you can snatch an online business that makes between one and five thousand a month in profit.

When you compare this to other ways of investing your money, this blows everything else out of the water.

Yes, you’ll need to do a heck of research so you don’t get tricked by an internet fraudster. And yes, you’ll need to learn the fundamentals of marketing so you can run and grow a business after you buy it.

But for your troubles, you can enjoy an ROI that’s impossible to achieve through traditional investment methods.

Flipping an online business

Online businesses can also be flipped! Think real estate flipping without all the stress, hassle and time consumption.

Many internet businesses can enjoy explosive growth by making just a few minor tweaks.

How? By implementing something called conversion rate optimisation. A fancy term for increasing the number of sales you make from existing traffic.

By implementing a few basic things like a squeeze page, an autoresponder and enticing lead magnets, a business can skyrocket their conversions.

Minor tweaks can produce major changes.

It’s not uncommon for an online business to double the monthly profit by optimising a few parts of the website.

That’s some sweet passive income production right there!

The bottom line

Investing in established online businesses is one of the fastest ways to diversify and grow your passive income streams. The average return on investment is higher than anything else I’ve come across before.

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By | 2018-07-09T13:48:25+00:00 July 9th, 2018|
  • Fantastic and honest passive income ideas!