Easiest form of Passive Income: Redirecting Cash Flow

I touched upon this briefly on my site www.passivelyearn.com for a reason - The idea of passive income is to end up at the end of the day with more money in your pocket/bank account than when you started with. Many of us have looked online for things we can do to generate new passive revenue streams, and it's always something to do with investing, watching videos online, rental income, etc. Most of us, however, don't have enough money to invest in things like ETFs or dividend stocks, rental properties, CDs, or the other "recommended" ways to earn a passive income.

Isn't there a way to start small and earn enough to get started in those other projects? Yes, there is! Stop spending your money!

Easier said than done, right? Not really; If you are buying a coffee everyday, stop. If you are smoking, stop. If you are renting - guess what, stop! Renting an apartment provides no long-term benefit to you. That money goes into someone else's pocket where they get to invest it. Why not invest it in yourself? You may not have the money right now to go out and buy the house of your dreams, but do a web search in your area for the cheapest house you can find.

There are usually options available that no one else wants, because they need work. Lots of work. I work as an electrician, and I am constantly working around people who are working on their own house. Why do they do this?

In my area you can rent an apartment for $500 - $750 per month, depending on how many bedrooms, location, etc. and guess how much I pay for my house per month. With taxes and insurance it works out to be right around $500. We bought our 1920s house as a fixer-upper almost 10 years ago for around $30,000. The floors were uneven, all of the drywall had to be replaced, we changed the layout and built new walls. It was a lot of work.

We bought the crappiest house in our neighborhood, did as much of the work as we could ourselves by watching YouTube videos and learning new skills, and we had help from relatives and friends. Now, our house is valued at around $100,000.

You will want to ask questions about the house, walk through the property, and either find someone who knows about renovation or hire a home inspector - but this is entirely doable by every single person with a strong back and the will to see it through. Don't worry about getting it all completed before you move in; make sure the plumbing and electrical are in good order, the roof isn't leaking, and make sure the house is insulated. Everything else can come later with time, patience, and hard work.

Why go through the hassle? Besides the fact that you will have learned many aspects of home remodel, you have made an investment in yourself. Every year you pay on your own house is growth in the equity of your home. Home equity is another post entirely, but a short term explanation is that you are not throwing the money away to a landlord.

Not sure if you can get a loan? You never know until you try, especially not when it comes to a smaller loan than most people would be looking for in regards to purchasing a home. So look online at properties, go to a bank and talk with a loan officer, talk with your family about it. Changes in our lives rarely ever walk up and knock on the front door - you have to be willing to step up and take that first step.

So what are you waiting for?