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Passive Income Is the Best Income

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All good things in life are passive – sleeping, breathing, and sunshine when the weatherman forecasts a blizzard. This is good news since energy is finite. Some things need to do their thing without me getting in the middle and mucking it up.

Passive income is like that.

It’s maxin’ relaxin’ for money.

Motley Fool is no fool to passive income:

“Money you earn with little to no effort is known as passive income, and it puts you on the fast track to financial independence.”

As a FIRE admirer, I’ve played with passive income vehicles. These are my favorite hits.

The Best Goes To Invest

Hands down, the most brilliant and beautiful in all the land is investing.

I prefer the smooth ride of an ETF index fund over individual stock picking. Picking or funding, investing is more delightful than sunrise coffee on a mountaintop.

Well, almost.

The catch with investing is that money needs to start the machine. A car doesn’t move on a busted engine, investments don’t go from zero to hero with a $0.00 budget.

There’s always a catch.

As a gov employee, my wages look different from most, but small amounts is still an investable amount.

As time has grown, so has my income in small spurts, from side hustles to gifts to a milk settlement (ca-ching $18.90!), and each amount is added to a giant green snowball of compounding.

An easy way to increase investing is leveraging the biweekly paydays. A couple of times a year, I get paid three times a month instead of the standard two.

It’s magical. Every. Time.

The first two paychecks go to the standard saving and spending. The third paycheck is ripe with possibilities. Instead of meeting normal demands, this chunk can go anywhere.

It doesn’t, of course. It has a detailed itinerary months before arrival.

When I cashed my third paycheck a couple of months ago, it went straight into the Roth IRA. The market has been cheaper than a Walmart special as of late and this girl loves a sale from socks to stocks!

Credit Card Rewards

Credit card rewards are passive but don’t generate as much as investing and has caused plenty of trouble. As a multidecade credit card holder, I’ve been labeled a deadbeat and had a card stolen.

Instead of avoiding credit cards, I think of them as a sharp knife. They can cut and clean, depending on intent.

I intend to cash in all sign-on bonuses and cashback rewards until my heart’s content.

It hasn’t happened yet. 😉

During the fall, car insurance, vehicle registration, and other crusty bills rear their head. I maximize this expensive time of year by getting a new card. Then, I adjust payment methods to the new card for recurring bills, apps, and other digital appendages that I use to pay for goods and services.

This method has allowed me to capture a sign-on bonus before Christmas.

The card has a probationary year before I’ll start examining if the rewards are enough to keep the card long-term. If it’s last on the list of returns, I close it.

My FICO score dips, but the peace of mind is worth not having 33 cards open.

Recently, I tried to close a card that was last on the list. Instead, customer service offered a closing bonus (my words, not theirs). Spend $1500 in three months and get an extra $100, plus the defaulted rewards.

Challenge accepted and the cash was received!

Paid to Shop

I get paid to shop.

It’s small because I don’t shop much, but it’s passive income.

I use Rakuten on my browser.

Rakuten is cash back, deals, and rewards for online products and services.

When I scour the web for Christmas gifts, Rakuten will glow red and flashes like a digital version of Operation. It has savings scores anywhere from 1-10%. Once I collect enough money, it’s deposited into PayPal.

It sounds easy because it is. The caveat is that money still needs to be spent similar to credit card rewards, which makes this another sharp stick to use with caution.