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What is passive income? Passive income for me is income earned with minimal or no work done. With passive income money is still coming in even if you are still working a full time job.
Passive income is a great way to generate extra cash flow, a little extra money every month. It can help a lot during these times of inflation.
You do need to invest money, work and time upfront in order to build passive income. As I was going through some passive income strategies online I think that investing in the stock market is one of the best ways to achieve it.
Some passive income examples: creating a course or ebook, renting a property, affiliate marketing or referral bonus, creating a YouTube channel or blog site, selling photos online, creating an app, dropshipping, real estate investing, peer to peer lending, becoming an influencer, renting out your unused stuff, advertising on your car and so much more.
Choosing which one is mostly up to you and your skills and if you are willing to put in the hard work to learn and build that passive income.
For me, I built this blog with affiliate marketing links and click on the link below if you’re interested in learning how to start one.
However, the one I will be focusing in this post is investing in the stock market. I really wanted to learn more about this passive income opportunity.
When I started, I didn’t know how to get started and what stocks to buy. Family members didn’t know anything about this and I needed to learn on my own.
I stumbled upon the Robinhood app and that was the first app I used to get started investing in the stock market.
Robinhood offers a free stock when you first join and link a bank account. So if you’re interested in earning a free stock join using the link below.
Get A Free Stock, get that free money!
Things to know about me before I started investing:
When I started investing I have already paid off all my credit card debt and I have no student loans or any personal loans. Basically avoid bad debt at all costs.
Plus I had at least $1,000 saved up in my savings account as an emergency cushion in case something happens like a car breaking down.
Car is already paid off and I had no mortgage payment at that time.
I had a stable job in healthcare that gives me active income to invest.
Without a lot of things to pay for, I have more active income to put into this passive income stream.
Dividend Stocks
I have started buying individual stocks and I learned about dividends. Some stocks give out dividends and some of them don’t.
Dividends are money that the company gives back to their share holders for owning those shares. As I said not all companies pays dividends.
Dividends in the Robinhood app is stated as an annual rate. For example if the dividend rate/yield is 9.821 like this stock AT&T with ticker symbol T.
If we buy $1000 worth of shares of T. We would earn about $98.21 per year as dividend. Now this dividend is taxable and you’ll need to pay taxes on this free money.
All we need to do is own the stock share and we can earn dividends from these dividend-yielding stocks. And the more shares you own the higher your payout will become.
Owning dividend stocks is one of the most passive ways of making money. This is a way of making your extra money work for you and considered an asset that builds wealth over time.
Which Dividend Stocks Do I Buy?
It is hard to pick which dividend stocks to buy. There is a way to invest without having to spend too much time picking individual stocks.
When I started I was picking individual stocks, then I came across ETFs or Exchange Traded Funds.
What is an ETF?
ETF is a collection or a group of stocks or bonds that is already picked out by experts that tracks or follows a certain sector or index.
Investing in ETFs will give you a diversified portfolio, and you don’t have to pick individual stocks anymore. The experts will already have done the heavy lifting of picking out the best stocks for you.
And I found out that there are high dividend ETFs. At the time of writing this post, I am dollar cost averaging into my favorite high dividend ETFs.
This is my strategy for now. Investing in high dividend ETFs and dollar cost averaging every single month.
I just did this recently in 2022. I was too busy in 2020 and 2021 and I just stopped investing in those years and that set me back and I did not grow my investment fast enough.
With my plan in 2022 I am hoping I could invest in the stock market during the recession and someday in the future my investments would go up in value.
I am planning to hold my positions for at least 5 years before even planning to sell any of the stocks.
Now this is just my opinion and I am no expert. But the stock market historically has always gone back up after a crash.
Please do your own due diligence when investing and it is best to seek advice from investing professionals.
Conclusion: Passive Income Journey
Thank you for reading this post about my investing journey. I hope I could inspire some of you to invest in the stock market and build wealth.
Having an active income is a good place to start and is one of your passive income tools to build wealth.
You’ll need to use your active income to pay off bad debt and build an emergency fund. Only then can you start using your active income and converting it to passive income through investing in the stock market.
If you’re interested in getting a free stock. Robinhood will give you a free stock when you first open an account and link a bank account. So click on the link below to create your account, get that free stock, get that free money.
Get that free stock and I’ll see you on my next post.
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