Financial freedom is quite different from one person to another because that 'magic number' varies.

So what is your financial freedom magic number?

Your Financial Freedom Number is the point at which your passive income is equal to or exceeds your expenses of living.

e.g your total monthly expenses = $6000
Passive income = $7000

Once you've reached this number, your day job (being a nurse, trucker, banker etc) becomes optional and along with that freedom comes the ability to make your own choices as to how you work and live.

So what kind of options do we have as far as finding Passive income opportunities?

I've done a good research for you.

Let's talk about passive income first. What is passive income?

Passive income includes regular earnings from a source other than an employer or contractor.

Here's a few that I love and that I'm working on.

1. Rental income/ Real Estate Opportunities

Finding or building a property and renting it out. Finding homes that are not too expensive, renovating them and renting them out.

2. Invest in a high-yield CD

• To make the most of your CD, you’ll want to do a quick search of the nation’s top CD rates.
• Make sure the financial institution you'll go with is backed by the FDIC to avoid losing your money.
• Pick a duration that you're comfortable with incase the financial institution requires you to leave your money there for a certain period of time for maturity.
• It’s usually much more advantageous to go with an online bank rather than your local bank, because you’ll be able to select the top rate available in the country. And you’ll still enjoy a guaranteed return of principal up to $250,000, if your financial institution is backed by the FDIC.

I'm currently using T-Mobile money. They offer 4% on the first $3000 and $1% on the balance. You'll have to have Tmobile as your phone network provider though. 

3. Affiliate Marketing

The key here is to make sure you're promoting things that you already use so that it can come out naturally for you.

With affiliate marketing, website owners, social media “influencers” or bloggers promote a third party’s product by including a link to the product on their site or social media account. Amazon might be the most well-known affiliate partner, but eBay, Awin and ShareASale are among the larger names, too.

Opportunity: When a visitor clicks on the link and makes a purchase from the third-party affiliate, the site owner earns a commission.

Affiliate marketing is considered passive because, in theory, you can earn money just by adding a link to your site or social media account. In reality, you won’t earn anything if you can’t attract readers to your site to click on the link and buy something.

Risk: If you’re just starting out, you’ll have to take time to create content and build traffic.

4. Peer-to-peer lending

A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Prosper or LendingClub.

Opportunity: As a lender, you earn income via interest payments made on the loans. But because the loan is unsecured, you face the risk of default.

To cut that risk, you need to do two things:

• Diversify your lending portfolio by investing smaller amounts over multiple loans. At Prosper.com, the minimum investment per loan is $25.
• Analyze historical data on the prospective borrowers to make informed picks.

Risk: It takes time to master the metrics of P2P lending, so it’s not entirely passive.

Because you’re investing in multiple loans, you must pay close attention to payments received. Whatever you make in interest should be reinvested if you want to build income.

Economic recessions can also make high-yielding personal loans a more likely candidate for default, too.

I've been trying out this peer to peer lending platform for 3 months now. I'm pretty impressed! Waiting for the 6 months when my $5000 investments matures so that I can share it with your guys LOL. So far I've made $110 in interest. Not bad at all!! 

subscribe to my newsletter for more info on this particular peer to peer lending idea. 

5. Stocks trading/Forex Trading/ Futures Trading

This one will need a good system of trading where you're making consistent income on the regular.

Checking the trend of a particular stock and trading it on the regular will start doubling your money within no time.

I won't suggest adding this to your list unless you dedicate some time to start learning and understanding how to trade. 

Investments & Beyond Community has monthly classes for $9.97 per month. Check out when the next training starts here.

6. Dividend Stocks

Shareholders in companies with dividend-yielding stocks receive a payment at regular intervals from the company. Companies pay cash dividends on a quarterly basis out of their profits, and all you need to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the higher your payout.

Opportunity: Since the income from the stocks isn’t related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money.

Risk: The tricky part is choosing the right stocks. Graves warns that too many novices jump into the market without thoroughly investigating the company issuing the stock. “You’ve got to investigate each company’s website and be comfortable with their financial statements,” Graves says. “You should spend two to three weeks investigating each company.”

That said, there are ways to invest in dividend-yielding stocks without spending a huge amount of time evaluating companies. Graves advises going with exchange-traded funds, or ETFs. ETFs are investment funds that hold assets such as stocks, commodities and bonds, but they trade like stocks. I came up with the best ETFs and stocks for you here.

“ETFs are an ideal choice for novices because they are easy to understand, highly liquid, inexpensive and have far better potential returns because of far lower costs than mutual funds,” Graves says.

Another key risk is that stocks or ETFs can move down significantly in short periods of time, especially during times of uncertainty, as in early 2020 when the coronavirus crisis shocked financial markets.

Economic stress can also cause some companies to cut their dividends entirely, while diversified funds may feel less of a pinch.

Compare your investing options with Bankrate’s brokerage reviews.

7. Rent out a room in your house

This straightforward strategy takes advantage of space that you’re probably not using anyway and turns it into a money-making opportunity.

Opportunity: You can list your space on any number of websites, such as Airbnb, and set the rental terms yourself. You’ll collect a check for your efforts with minimal extra work, especially if you’re renting to a longer-term tenant.

Risk: You don’t have a lot of financial downside here, though letting strangers stay in your house is a risk that’s atypical of most passive investments. Tenants may deface or even destroy your property or even steal valuables, for example.

8. Advertise on your car

You may be able to earn some extra money by simply driving your car around town.

Contact a specialized advertising agency, which will evaluate your driving habits, including where you drive and how many miles. If you’re a match with one of their advertisers, the agency will “wrap” your car with the ads at no cost to you. Agencies are looking for newer cars, and drivers should have a clean driving record.

Opportunity: While you do have to get out and drive, if you’re already putting in the mileage anyway, then this is a great way to earn hundreds per month with little or no extra cost. Drivers can be paid by the mile.

Risk: If this idea looks interesting, be extra careful to find a legitimate operation to partner with. Many fraudsters set up scams in this space to try and bilk you out of thousands.

9. Treasury Bonds

A treasury bond is a marketable, fixed-interest, government debt security with a maturity of more than 10 years and which pays periodic.

Investing in Treasury Bonds seems to be more lucrative if investment in developing countries. The Kenya government can pay up to 15% interest. 

10. REIT

A REIT is a real estate investment trust, which is a fancy name for a company that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders.

Opportunity: You can purchase REITs on the stock market just like any other company or dividend stock. You’ll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time.

Like dividend stocks, individual REITs can be more risky than owning an ETF consisting of dozens of REIT stocks. A fund provides immediate diversification and is usually a lot safer than buying individual stocks — and you’ll still get a nice payout.

Risk: Just like dividend stocks, you’ll have to be able to pick the good REITs, and that means you’ll need to analyze each of the businesses that you might buy — a time-consuming process. And while it’s a passive activity, you can lose a lot of money if you don’t know what you’re doing.

REIT dividends are not protected from tough economic times, either. If the REIT doesn’t generate enough income, it will likely have to cut its dividend or eliminate it entirely. So your passive income may get hit just when you want it most.

10. Pay down your debt

A simple way to invest in passive income is by making larger payments to your outstanding debts. Over time, you could be spending hundreds, or even thousands, on debt interest rates. If you’re looking for different areas to invest, considering paying off debt first.

Pro: Taking care of your debt can help build your credit. Not to mention, cut long-term investment payments, and free up your budget. Every dollar extra you pay off past your minimum payment goes directly towards paying down your loan principal balance. The lower your principal balance is, the less interest you will pay overall.

Con: With this option, you aren’t technically earning money, you’re saving money over time.

The truth is, there are so many ways to make residual income. Let me know what other ways you're working on achieving your financial freedom magic number below :)

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Ref: 

James Royal. “11 passive income ideas to help you make money in 2020” Bank Rate, May 19th, 2020, Link to post.

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