Money Sense Tips

Passive income is income that is earned without any real involvement in the earning process. There are many ways to earn passive income if you know how to do the research and where to invest your money. While some methods of earning passive income may require periodical work involvement, many of them do not. Here are some tips.

* Publish yourself. If you have extensive knowledge on a topic or two, consider sharing that knowledge with others. This requires work in the beginning as you will have to write the book; however, you can earn passive income after publishing. Consider publishing your book as an e-book and posting it for sale on other websites. Do your research and determine which websites will offer you the highest royalties and the most exposure for your e-book.

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* If you own rental properties, you can earn passive income from renting out houses or apartments. While the rentals may require periodical maintenance, for the most part the income is earned passively. This is a great way to earn monthly income, especially if you have more than one property available.

* If you do not own rental properties, but instead own a house that has a few empty rooms, consider renting out your rooms for income. It will be an infringement on your privacy, though, so be careful in making that decision.

* Treasury bonds are another means of earning passive income. Treasury bonds are issued by the government, thus essentially assuring you that you can collect on your investment. Investing in treasury bonds is more expensive than investing in a regular savings or money market account. However, if you have the money to invest, it is a good way to earn passive income as interest is gained constantly on the money invested.

* Money markets or savings accounts can earn interest for you. You need to have a significant amount of money invested for the interest to add up, but many accounts offer compounded interest. Compounded interest means that even your interest gained on the original amount will earn interest for you.

* A less stable way to invest your money is on the stock market. That can be a scary thought for some people, especially with the market being unpredictable in today’s economy. However, if you are a risk taker and feel confident in being able to choose wise investments, this may be the route for you to take. You can gain a large sum of money, but be prepared to lose your entire investment as the stock market is never guaranteed.

Earning passive income can be easy if you know where to look. Take the time to research all of your possible options and then exercise them. You will have more time on your hands for vacation and spending time with your family if you decide to take the passive income route. Another bonus is that this can be done well into retirement and if set up properly, you will never have to worry about paying bills.

If you are lucky enough to fall within the age bracket of between 20 to 35years old and want to learn more about how you achieve personal freedom, i.e. managing your personal finances appropriately, this book was written for you. The author, Ramit Sethi, provides you with a six week, step-by-step program and a wealth of sound advice on how to get started on your way to financial security.

I like that he doesn’t preach, instead he brings his ideas across in an entertaining, easy-to-read, but very practical and down-to earth style. He talks about the important parts of achieving financial independence, banking, saving, budgeting and investing, and how to do it wisely.

The book - I Will Teach You To Be Rich can be read in conjunction with his website, iwillteachyoutoberich.com, where he provides you with the latest and up-to-date information, a financial blog, and more advice on how to build your own personal wealth.

Overall, I like the fact that the author writes in a clear and to-the-point language on how to implement his many suggestions on conscious budgeting and spending. Learn how to manage your student loans, the low-down on credit cards and bank fees, how to be frugal without being cheap and other invaluable advice.

One of the Customer Reviews By Susan Roberts

5 stars: Not your parents’ money management book, March 23, 2009
This review is from: I Will Teach You To Be Rich (Paperback)

First, here’s what this book is not: It’s not your parents’ money management and investing book, although as a parent I wish I had done in my twenties what Ramit Sethi tells the twenty-somethings they should be doing right now.

Ramit starts with the premise that most people are so overwhelmed by the sheer amount of financial information available that they just shut down and do nothing. So Ramit tells you exactly what to do with your money and why. Want to know whether it’s smarter to pay extra on your student loans or put that money into your 401(k) instead? Ramit will tell you. Want to know some specific financial companies that offer the low-cost index funds you should invest in through your Roth IRA? Ramit will tell you. Do you not even know what the heck an index fund is? Ramit will tell you!

Ramit also tells the truth about brown bagging your lunch and curbing your latte habit; and the truth is that these actions on their own are virtually pointless. Instead, you should go after the big wins, like getting the lowest interest rate and the best price on your next car because you have impeccable credit and negotiated “like an Indian” (negotiation scripts included).

Ramit maps out exactly how to get from where you are now to where you want to be financially, including how to create a personal money management system that practically manages itself. Ramit’s system starts with a no-fee checking account and an online high-interest savings account. (He even tells you which online bank he uses.) He then walks you through setting up automatic bill payments and regularly scheduled transfers to your investment accounts. Throughout, he includes easy-to-understand charts, as well as short pieces by other personal finance bloggers.

I wish I could quote some of the passages that I found especially useful or entertaining–Ramit writes with an appealing, if oddball, humor–but I have already mailed my copy of the book to my 24-year-old son, who called me last night to tell me it never would’ve occurred to him to ask his bank to waive an overdraft fee. (That gem is in chapter 2, I think.)

Thank you, Ramit! I hope this enthusiastic review by an “old person” will not stop the young people from buying your book!

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