In yesterday’s post I posed the question: are we taking advantage of the time we have been idle the last few weeks because the pandemic forced us from our jobs? In that post I described what a passive income is. In today’s post, I wanted to share my personal experiences with passive income.
Years ago, I followed the analog world of passive incomes based on the traditional models of investments in financial instruments and rental properties. In 2008, and somewhat previously with the Mexican Peso devaluations I learned that passive income from investments are foolhardy at best. The only people who make money from rental properties and stocks and bonds are the banks. Like almost everyone else, I lost value in my portfolio because of the banking crash. The banks were the only ones that seemed to weather the market crashes. My investments, not so much.
Likewise, rental properties are always dependent on a willing tenant that; 1. pays their rent and, 2. takes care of the property. Those are few and far between. In addition to that is the cost to keep the rental property operational. Costs like maintenance and repairs and property and other taxes.
There is an inherent cost to all rental properties.
But what if I told you that there is passive income that can be made without putting more money into the banks or paying bills to keep the product maintained. You don’t even have to keep inventory to make money from it.
Thanks to the Internet, today I make passive income from taking the time to create something once and let it sell itself again and again.
Not, it is not a fly-by-night shyster get-rich-scheme.
Last year I wrote a book about the Chapo Guzmán (link) criminal trial. I published it on Amazon.
My only expense in writing my book was the time it took me to write it. I had no other expenses.
I then put it up for sale on Amazon and it pays me a dividend each month. Enough for me to have to include it in my taxes each year.
Because Amazon promotes, produces and distributes the book I have no out of pocket expense. I pay nothing to sell my book.
The only time I think about the book is when I get a notice from Amazon each month telling my how much they are going to deposit in my account for the royalties on the sale of my book.
Other than that, I don’t give my book much thought.
But the pandemic emergency made me realize the power of my time and passive income.
Unlike rental property that depends on the tenants making their monthly rent payment, which is harder now that unemployment is skyrocketing, the book sells on its own. And, unlike having to dread the daily stock market reports each morning to see where my portfolio stands, I do not even think about my book until I get a notice that the royalty payments will be deposited in my account shortly.
As the Covid-19 emergency began to take hold, I was surprised to see something unexpected happen.
My book sales increased!
I assume that people were bored at home, or suddenly had time on their hands to read and thus they bought books to read.
Now, it is not a “best seller” but the passive income it has generated for me during the pandemic is noticeable. And this got me thinking about how intellectual property can be leveraged to generate a passive income for me.
As businesses are closed, like many, I have time on my hands.
The choice was soon clear, do I sit back and worry about the future or do I create.
I chose to create. I have spent the last few months focused on programming.
I finally finished a twenty-year project which I had dreamed about finishing.
On May 1, I launched Amitor. It is too soon to tell how successful it is but like the book, it is there to generate passive income for me well into the future.
I chose to create. What did you do?
But I am not done yet, the book has taught me that if I put it into written words, there is someone who will pay to read it. Over the years I’ve had books in my head that I’ve wanted to put on paper.
Because of that, I am now committed to finishing one, or even two books this year.
The global economy has fundamentally changed. It is incumbent upon each of us on how to proceed forth. For me, the answer is easy, I can sit back and wait for things to get better, or I can create so that I can generate passive income for myself.