The Importance Of Diversifying Passive Income

If you read a few posts down you will see how one of my passive income streams(Ehow) was suddenly stopped. This is exactly the reason why it is very important to keep working on new passive incomes and than diversify them various sites.

Ehow was a great passive income while it lasted and the income my articles generated was nice but the lesson you can learn is that passive incomes can stop when a website changes its terms or its compensation plan. You have to plan for these types of changes no matter how unpleasant they are, it just a fact of life that nothing is guaranteed.

Having income streams from different sources like ebooks, videos, books, websites, domain parking, affiliates, articles, surveys, dividends, rental income, etc. will help ease the loss of one passive income. Than you can add new income streams and expand current ones until you hit the passive income your targeting.

Rental Income

I have had quite a bit of experience with buying, selling, and managing rental property and I have come to some conclusion based on this experience. If your thinking about becoming a landlord there are a few important steps to take before taking the plunge.

1. Start Small – One of the biggest mistakes I made as a new real estate investor was buying to many properties too fast. I eventually learned some costly lessons to come to this conclusion but trust me it’s better to buy only 1 or 2 properties your first year so that you can really get a hands on grip of all that’s involved with being a landlord. If after the first year you decide it’s not for you than you have the option to keep them and buy no more and keep collecting the rental income or sell them and get completely out.

2. Buy In Working Class Neighborhoods – Low income areas mosty have tenants that don’t pay or when they do you have problems collecting it not to mention that there are much fewer buyers for these properties when you decide to sell. High income areas have good tenants that pay but between the higher mortgage payment which causes little to no cash flow and the higher property taxes it’s almost impossible to net a positive cash flow unless you buy the house for cash. Stick with homes in middle income areas where people have jobs but don’t make a lot of money. The tenants these homes attract are mostly good hard working people that pay their bills and between the nice cash flow and increasing property values you can really do well.

3. Buy In Cash – You have probably heard the term “Cash is king” and it hold true. When you make an offer with cash you can get huge discounts off the sales price and the seller and realtor know they won’t have any problems closing on the property. If you have enough cash always buy homes using it and than after you get a great deal and close on the house you can cash out by financing the home with a bank. Since you bought the home at a discount using cash you may be able to get all your cash back using a mortgage.

These are just a few words of wisdom that it took several years to realize and can make you a lot of money and save you even more. Owning rental property is one of the best ways to make passive income if you know what your doing.

Ehow/Demand Studio Stock (DMD)

Last month I got an e-mail from the old Ehow article site saying that they were closing their compensation plan which paid me monthly passive income for articles I had written. Initially I thought this was a bad thing but after reviewing the e-mail they offered to buy my articles or I could remove them and place them at another article site.

Since many of my articles were written when I first started trying to make passive income online the quality wasn’t the best so the decision to sell them was a relatively easy one. I decided I would just write new articles at other article sites. I then thought maybe I should invest that money into the companies stock since it was a publicly traded company. I also have a theory that since this company would no longer have to pay passive income every month to the writers but instead would now get to keep 100% of the earnings that this could have a significant impact on thier earnings.

After doing some research on DMD (Demand Studios/Ehow) I realized that they were losing money currently but after buying all these writers articles that may change very soon, possibly in two quarters. In my opinion this company is significantly undervalued since much of their revenue is based on Search engine searches. The earnings have already taken a big hit a few months ago when Google changed up its search results and placements so that is already discounted into the stock.

The good news is that their page views keep going up which translates into higher earnings and management is already addressing the issues with Googles new search engine rankings. Goldman Sacks just upgraded the shares from a neutral to buy recommendation which sent the shares higher a few days ago by 16%.

Bottom line is that this may be a good time to pick up some shares of this company. I will tell you that I picked up some shares myself so I don’t want to leave that out of this post so you know my position ahead of time. That being said any old Ehow writers might want to take their pay outs and invest in the company themselves.

Writing Sites Similiar To Demand Studios(Ehow)

There are many different types of writing sites that have various ways of earning upfront and passive income however only a few pay what I consider to be fair compensation. Among the best paying was Ehow now known as Demand Studios (DMD) which is a publicly traded company.

Many of the writing sites pay via ads placed on them through your own Google Adsense and Amazon ads but this can be an issue for some writers. They may not have an Adsense account due to a lack of a website, their adsense account could have been banned, or they would just like a simple hands off approach to making money without the aggravation.

There are only a handful of sites that use their own Adsense accounts to generate passive income and then pay out a percentage of your written pages earnings. Out of this handful of sites which are similar to how Ehow use to pay only 2 in my opinion are worthy of your effort and they are listed below.

1. Firehow – This site is an up and coming writing site that although now won’t come close to the earnings of Ehow is a nice way to play its increasing popularity in the search engines. They pay via paypal every month for your passive earnings generated by your page views.

2. Triond – This site is another relatively new site that pays somewhat better than Firehow but has a more strict approach to article reviews. They also pay via paypal and base the earnings on page views.

Both of these writing sites are a great way to start building up your passive income and allow increased earnings as the sites grow in popularity without the hassle of dealing with affiliate codes and accounts.

Living The Passive Income Lifestyle

Since most people’s dream life consists of earning a livable income passively a good way to do this is through passive income. Many of the big time internet guru’s main source of passive income generally comes from affiliates.

These affiliates pay a commission for each sale they refer to the company. This can be almost any company that has an affiliate program but many affiliate programs either pay little or may not be completely honest in the number of sales you generate. So the most important step is to find and use an affiliate program that has a good reputation.

The second most important step is to get the traffic to your affiliate ads. This is one of the hardest steps to do and it is very important because without traffic to your affiliate ads you have a up hill battle. In addition the conversion rate should be higher than average so that you convert that traffic into sales and commissions.

I found a great ebook that covers all these issues and more, since I normally don’t recommend an ebook I found this one to be very good. The ebook is called Super Affiliates and you can get a copy here. If there is one thing I have learned is that money is well spent on knowledge that can pay off financially.

With this information I believe that almost anyone can make a decent living passive income and begin to live a lifestyle that anyone would envy.