Top 8 Ways to Create Passive Income

Wouldn't it be great if you could have a continuous stream of income deposited into your savings and/or checking account? Think about it. You wouldn't have to worry about paying the bills on time or having money to buy groceries for your family. An extra $500, $1,000 or more in your bank account will reduce your money worries and stress.

While having multiple streams of income is ideal, you need to choose the right one for you. For example, if you want to earn money from a blog, you need to pay for web hosting, choose the right niche, design your website (or have someone design it for you), create a blogging schedule, share your posts, develop a community, guest blog, and choose the best affiliates for your blog niche. Blogging is work, but it is fun!

If you want to earn additional monthly income and start saving for retirement (or add to a fund), college, vacation, etc., check out the top eight ways to create passive income listed below. Some require more work than others. But all of them will put extra cash into your pocket.

8 Ways to Create Passive Income

1. Affiliate marketing.

Affiliate marketing means you sign up with a company and/or entrepreneur and sell their products. For example, if you start a tech website, you could become an affiliate of a web hosting or anti-virus software company. You can earn hundreds or even thousands of dollars each month if your website receives a decent amount of web traffic and you have thousands of email subscribers. Being an affiliate marketer takes dedication and time. You need to build traffic via your website, email marketing and social media. Is this for you? You be the judge.

2. Start a freelance business.

Have you always wanted to own your own business? You could start a side business while you work a full-time or part-time job. For example, if you're a graphic or web designer, you could start your own graphic or web design business on the side. If you like to make jewelry, you could sell at craft fairs and online. Starting a business may be daunting, but if you believe in you and your work, you could earn a decent living, maybe even quit your day job. Search out those who are doing what you want to do and interview them. Find out the mistakes they made and ask for guidance.

Berkshire Hathaway 2012 Shareholder Meeting Notes (part 1)

Written by Greg Speicher

The following is the first part of my notes from the 2012 Berkshire Hathaway shareholder meeting. I have tried to be accurate, but I make no guaranty that I have been so. The notes are not complete, but rather the thoughts I wrote down during the meeting. I hope they are useful. Please take them with a grain of salt and cross check them against other sources.

Managing riskBuffett’s successor must be the chief risk officer.

Insurance divisions are already overseeing their own risk. Leverage will be avoided in the future.

Berkshire may not have access to all the deals they could do with Buffett, but there will be opportunities. They will do some things better after Buffett.

The special side deals such as the warrants have not been material.

Berkshire has a strong board with deep experience managing risk.

Repurchase of Berkshire shares

Berkshire has always tried to have an attitude of partnership towards shareholders. When Berkshire issued B shares, Buffett said in the proxy that he would not buy them at the offering price.

Buffett stated that Berkshire’s intrinsic value is significantly higher than 110% of book value. Buffett feels very comfortable with 1.1x book. Significantly (dramatically) undervalued.

Some of Berkshire’s businesses are undervalued; some are fairly valued.

Buffett would love to buy “tens of billions” at 1.1x book. The value of each shares goes up if shares are repurchased at 110% of book. It’s obvious.

He won’t go below cash buffer of $20 billion.

Many companies repurchase their stock at overvalued prices.

5 Easy Passive Income Method

Passive Income is the income that we earn with little effort involved. Having a multiple passive income will help you to create wealth and also let you to have more freedom in your life. Nowadays, many people are talking about financial freedom and one way to achieve it is to have multiple passive incomes which can cover the monthly expenses. For those people who still don't have any passive income, I think is time for you and your family to sit down and think about it. 

Please don't think that creating passive income is a difficult task and require a large amount of money. Actually it is fun and easy... even kids also can do it. Let me share with you 5 easy passive income methods you can start with... 

1. High Yield Saving Account 

Sometimes we might not notice what is our saving account interest rate because is it relative low. However, a 0.1% differences in long run will be a huge amount. Normally bank will give 0.1% - 0.3%. Let said, if you have 100,000 dollar in bank A with interest rate 0.1% and 100,000 dollar in bank B with interest rate 0.2%. If after 1 year you check at your account in bank A the amount will be 100,100 dollar and bank B the amount will be 100,200 dollar so we can see the difference is 100 dollar. With 100 dollar we can use it to buy stationary for our kids. 

2. Fix Deposit 

This is an investment tools created by bank, where customer agree to save some amount of money in the bank with a locking period and then customer will get a guarantee return. The return is normally between 2% - 4% per annual. No service and annual fee charge required. For example, just put 1000 dollar to fix deposit with a 1 year locking period and 3% return then after 1 year when your fix deposit maturity you will receive 1030 dollar which mean that you have a 30 dollar passive income. 

3. Unit Trust Fund Investment 

If you think Fix Deposit return is low maybe you can invest in some trust fund which give better return. These kinds of trust fund normally provide 6% - 20% return. However please carefully select the fund you going to invest because normally trust fund will have a annual fee charge. 

4. Stock Investment 

Stock investment is always treating as a favorite tool for passive income. The reason is because the access is easy and also the return can come from capital appreciation and dividend. However some might think stock investment is very risky. Well, with proper planning and analysis I think we can reduce the risk. One of the way to reduce the risk is to invest in dividend stock. This kind of stock can give 4% - 10% dividend. Normally dividend stock will have a good fundamental and strong management so if any market crash they still can withstand it. Examples of dividend stock in Malaysia are BAT, Dutch Lady, Digi, Public Bank, Nestle, Guinness, Carlsberg and Telekom Malaysia. 

5. Pension Fund 

Pension Fund is also one of the passive income that for longer term. The objective of Pension fund is to provide a measure of security for the retirement to its member. In some country pension fund is a compulsory saving scheme for all employees. Normally they can withdraw their pension fund after 55 years old. In Malaysia, we call it EPF (Employee Provident Fund). Pension fund will also use the fund to invest in stock equity and the profit they get will be share to members as a dividend. 

The above are some easy passive income method which require very little amount of money and time. Please start early and enjoy the passive income you earn. 

5 Simple Saving Tips for your kids

From young my mother always asked us to save money. She always said don't spend money to buy unnecessary things, save the money so we can use the money when we really need it in the future. Here I would like to share some simple tips that you can teach your kids about saving.

1. Open bank account

Please open a bank account for your kids. Let your kids monitor the in and out of the money. Teach your kids about bank interest rate. By doing this, you kids will more cherish the money in their account because they know that is their money and how they can earn from interest rate.

2. Buy using own money

When your kids are asking you to buy toys, tell them this is the amount money in your account and how much you want to take out to buy the toys and ask the reason why they need this toy. The kids will learn whether it's worthy to buy the toys and you will find it funny because your kids will think very long which toy to buy.

3. Earn the money

Let your kids know they need to earn the money so they understand where they money come from. You can let them earn from reward for example if they archive good grade in the school reward them some money. This can teach them that money is not come from the sky... :)

4. Saving Competition

Having a saving competition can encourage them to save more. Let said if they can save until certain amount you will reward them. 

5. Make Mistakes

Let you kids make mistake with their money. It is better they lose $10 toy car then later $100,000 real car. For example, your kids buy toy car using their money and when the toy car broke, communicate with them and teach your kids what they can learn from it. Tell the kids they can use the money more wisely. A small mistake for your kids will help them in the future.

Hope you all enjoy teaching your kids about saving.