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Passive Income with a Kiosk

Many of us have aspirations of building up a passive income large enough to quit our jobs someday and retire like kings. The only problem is, I don’t think too many of us have a plan in place to make this a reality. If your plan is to work your day job until you’re 65, then you’ll most likely not even live like the King’s 3rd cousin. Budgeting will be a necessity and you’ll have to be very careful not to spend all of your money before you pass away.

This is obviously not what many of us dream about. “Boy, I wish that I could barely get by when I retire.” If you’re dreaming this dream, you may just want to stop reading now. This post is not for you.

If, however, you are looking to build streams of passive income, this might very well be the idea for you. Kiosks. That’s right, those kiosks in the mall. If you have the right product and a trustworthy employee, you could make some serious dough here.

Why Kiosks Are A Good Idea

If you’ve toyed around with the idea of opening a store, I would strongly encourage you to start out with a kiosk, and here are my reasons why:

  1. The contract terms are much less than if you would rent a regular store-front in the mall.
  2. You’ll see much more foot traffic in the middle of the mall
  3. It’s a cheaper start-up cost than a brick-and-mortar store
  4. It can be made passive quite easily

What Kind of Product Would You Sell?

Since many of the shoppers aren’t entering the mall to look at your kiosk, you’ll have to get their attention with something that they might purchase on the spur of the moment. In other words, you’ll need to sell something that costs $40 or less – with this low price, people are more willing to stop, look, and make that quick purchase. If your product is a high-end blender for $400, you will not have more than 10 lookers a day, and most likely will go without a sale.

This is why you often see chintzy jewelry and T-shirts – they are cheap, and people are willing to buy them without thinking twice.

Example Products

  • Ice cream
  • Snow cones
  • Clothing
  • Sunglasses
  • Jewelry
  • Stuffed Animals
  • Things for your Pet
  • Pictures

This list should help you get the ball rolling.

What Are The Costs of a Kiosk?

If you want to get started with a kiosk, you might be wondering what kind of costs are involved. Well, since your set-up will be smack-dab in the middle of the mall, there are some initial fees, as well as some fees based on your sales.

On average, you’ll have to dish out $1,500 before you even put your products out for sale, and then there’s a monthly fee of about $2,300 or 15% of your sales (the mall will collect the larger of the two amounts).

Then, if you’d like to create a passive income with your kiosk, you’ll need to find a dependable employee. Let’s say you’re paying them $10 a hour for 6 hours a day, 7 days a week.

Break Even

With these expenses, what should you shoot for in terms of sales? What will be your break-even point? If you can earn a 30% profit on each item, you’ll need to sell just over $20,000 of merchandise each month to start earning a profit.

  • Initial Expense: $1,500
  • Employee Expense: $1,800
  • Fees Based on Sales: 15% or $2,300 (take the higher of the two)

So, profits need to meet expenses, which totals to $5,600. If you can earn 30% on each product, then you’ll need to sell $18,666 to earn that profit of $5,600, which will allow you to break-even.

Once you break even though, your earnings could soar. What if you sell $50,000 worth of your product? After all expenses, you’ll have cleared $39,200 of pure profit!!

Making it Passive

Since this is such a small operation, all you need to do is find one trustworthy person to run your kiosk. Rather than pay them hourly, maybe it would be beneficial to pay them based on sales – it would be much more motivational for them to sell the product, instead of just sitting in the chair with their smart phone….

That’s it!

Have you ever thought about creating a passive income with a kiosk? What would you sell?

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Passive Income with a Moving Company

Much of the time, passive income isn’t created overnight. Actually, more often than not, the income in the early stages is minimal and the hours are long and difficult. After a few years of hard work though, a business can be molded into a passive revenue stream that will send money your way, even when you’re not around!

Two Men and a Truck

The moving company, Two Men and a Truck, started in the early 80s (in my neck of the woods) by two brothers looking to make a buck while in high school. They started this business with a regular Chevy pick-up and two pairs of hands. Nothing more, nothing less. After making enough money with a few moves, the brothers invested in their very first box truck – it cost them $350. After growing their business within their region, they decided that it was time to franchise the company and become more than just “Two Men and a Truck”.


Today, their company has not just one truck, but 1,300. Plus, they are the largest franchised moving company in the United States. Not too shabby for a company that started with two high schoolers and a regular truck!

Are You Ready to Start a Moving Company?

The beauty of starting your own moving business is that you can start small! The bottom line though, is that everyone needs to move at some point in their lives, and if you develop relationships before that move happens, there’s a pretty good chance that you’ll be receiving their business.

The Initial Investment

You might already own a regular pickup truck. It that’s the case, then your initial investment would most likely be $0.00! But, if you do want to start your business with a box truck, they really aren’t that expensive either. I just found a 2007 Box Truck for $8,500. I could buy that truck tomorrow and start making money over the weekend!

In addition to the truck, you’ll most likely want some tie-down straps, some dollies, and some moving gloves. These items would maybe cost you $150 total, and are hardly worth mentioning.

Variable Expenses

The largest variable expense would probably be the gas that it would take to move the items from house to house – and along with that, the wear and tear on your vehicle. This should be factored in when deciding on the price to move a client.

Also, since people are sue-crazy these days, you’ll most likely need to carry some insurance in the event that their belongings are damaged in the move.

Making Your Business Passive

A moving company is a pretty straight forward business. There are boxes and furniture and they need to be moved from point ‘A’ to point ‘B’. In order to make the business passive, you’ll need to teach someone else the reigns and have them take over your position. This could take some time, but ultimately if it frees up the rest of your life, I’d say that it would be worth it.

Calculate the Profits

If you went out and bought that $8,500 and also purchased another $500 in equipment (and your business license of course), your initial expense in the business is $9,000.

You figure that each move costs you $100 when factoring in gas, repairs, and depreciation.

On average, you’re able to earn $400 for each move (the standard rate is $100 per hour), and you figure you can find 60 gigs in that first year.

Your income before expenses is $24,000 (not bad for a side-gig that’s soon to be passive). Take off your $9,000 for that truck, and the $6,000 in gas, repairs, and depreciation and you earned $9,000 in that first year (not including tax).

That first year may have seemed like a lot of work for 9,000 bucks, but in Year 2, you can create a passive income and earn more!

Year 2

The truck is paid for, so your only expense is variable, but you also decide to replace yourself on the job. Your new employee gets paid $16 an hour plus a potential bonus of $1,000 (for the year) if he keeps a clean moving record.

Let’s say that all goes well. Word has been spreading about your awesome moving company and you’re able to book 80 gigs for the year. Your employee worked all of the jobs and you did basically nothing. Here is what the books look like:

  • Gross Income = 32,000
  • Gas/Repairs/Dep. = (8,000)
  • Employee Cost = (6,120)  – 16*(4 hours)*(80 gigs) + 1,000 bonus
  • Net Income = $17,880

So, you made almost double the income and worked hardly at all! Sounds like a pretty sweet passive income source to me.

What are your thoughts of a passive income with a moving company?

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$10,000 a Month in Passive Income, Part 2 of 2

Within part 1 of this article, I taught you what it will take to put yourself in a position to earn $10,000 per month. Now, it’s time for the details of developing a business that will actually give you the income. Not only am I certain that you could earn $10,000 per month, I believe that you could achieve these results in less than 10 years, plus, you’ll be 100% debt free!

Based on my last article, you should already know the first three steps to preparing yourself for wealth:

  • Rent out some of your space – if you can rent out 2 rooms, you could be earning an extra $600 per month that could go toward your future investments
  • Live on way less – Do whatever you can to save some extra bucks. Stop eating out, get rid of your car if you can (they’re expensive all around), and always buy used
  • Increase your income – Here are some great sources for you to get started: 101 Ways to Make More Money (free eBook by subscribing), and Grand Per Month (an excellent website that shows you how to earn an extra $1,000 per month)

Now it’s time for the investment! By investing right and paying off your debts, I truly believe that you can earn $10,000 per month sooner rather than later.

1) Invest in Rental Properties

As long as you can find a deal, I really don’t mind what type of real estate you invest in. For now though, let’s assume that you’re going to invest in multiplexes. Personally, I like quadplexes. There are 4 units within one investment building which not only gets you more for your buck, but it’s much easier to keep an eye on one building rather than 4.

In my area, properties are cheap. I found a quadplex for $85,000. Each unit has at least 2 bedrooms, and some of them even have 3. They can easily be rented out for $700 a month. With proper marketing and renter selection, we’re going to assume that we can always keep 100% occupancy. I realize that this is the best possible scenario, but let’s just roll with it and see where it takes us.

2) Reinvest the Earnings

If you take your money and buy things like cars or boats, you won’t go far. But, if you decide to reinvest the earnings back into more investment properties, then your future earnings are limitless. Do this for long enough and you’ll soon be buying yachts for cash rather than domestic cars or little 18 foot boats.

With the extra money you earned by renting out your spare rooms, by living on less, and buy earning an extra income, you could pocket an extra $2,500 a month. After just 4 months, you’ll have a great down-payment on your first investment property. If you purchased the property right, you should be paying only 80% or less than the asking price.

For our $85,000 property, I would pay no more than $70,000, put my $10,000 down, and get the remaining $60,000 from the bank on a 30 year note. So, my payment each month would be something like $300, which is nothing compared to my potential earnings. If we put our $2,500 a month, plus the $2,800 in rent toward the mortgage, we could have this quadplex paid off in a year! Now we own 100% of our investment and it’s still yielding us $2,800 a month.

Now it’s time to reinvest! If we’ve been shopping around for other properties while we were paying off the first one (and we definitely should have been), then I’m sure we’ve already got another money-maker in our sites. This time, we found a quadplex in a better part of town that costs $150,000. Sure, it’s more expensive, but the tenents are more predictable and the rental income is $1,00o per unit, not $700. With this new income of $4,000 a month, our available cash each month is $9,300! If we put that toward the mortgage payment each month, we could have this investment property paid off in only a year and a half!

At this point, we’re about 3 years into our plan and you own $230,000 worth of investment property and you have a passive income of $6,800 per month. At this point, all you have to do is find one more quadplex that’s similar to the last one. Purchase it at $150k and use your $13,300 (4,000+4,000+2,800+2,500) to pay it off in just a year.

Now you own about $400,000 worth of rental properties and $10,800 in passive income. It’s time to quit your job and continue to build your rental empire! 

It Didn’t Even Take 10 Years

Did you notice  how long it took us to earn our $10,000 per month with zero debt? It took less than 5 years!!! Of course, that’s if everything goes perfectly and if you have zero expenses (which obviously never happens), so rather than predict the impossible, I gave you an extra 5 years. If this works on paper in just 5 years, you could easily do it in ten.

What do you think about this plan? Could you do this? Is it part of your future plan?

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Creating a Passive Income Through Social Trading

Creating a Passive Income Through Social Trading

Platforms allow newcomer investors to follow up on the trades of expert traders and copy their activity. Although it is extremely simple to sign up with social trading programs and brokerages and participate in the lucrative FX market, it is always advisable to perform a preliminary research before pulling the trigger.If you’re looking to diversify your investment profile, you can consider investing some of it into forex and CFD’s. If you don’t have the prior knowledge or experience to make trades on your own, you can use social trading platforms
The first thing potential traders need to realize is that the forex market can be extremely volatile, that trading is often leveraged, and how unexpected losses may occur. The type of people who should be involved with it are people of two types – either financially established individuals who can utilize CFD trading as part of a diversified investment profile, or investors who are willing to put their money at tremendous risk with the hope of yielding a very high return.

The second thing potential investors should know is that both social trading platforms and FX trading brokers offer demo accounts. These accounts allow investors to check out the platform without actually depositing any money into it. It’s always a good practice to sign up for demo at the beginning, and proceed to a real money account only at a later stage.

The third thing potential investors need to thoroughly check is the regulatory body approving the activity of the firm he wishes to sign up with. It is expected clients will uphold the same type of scrutinization they use to inspect other financial service providers like their banks or their insurance company.

Retail forex trading is an extremely tricky industry – there’s a lot of scam and dishonesty with many of the brokers; Regulatory supervisory help maintain a certain criteria and can be used to issue complaints against the firm. Not all regulatory bodies are alike though, it’s always good to stick to brokerages approved by one of the main regulators: The Financials  Conduct Authority (UK), CySEC (Cyprus), National Futures Association (USA), ASIC (Australia) or Central Bank of Ireland.

The safest platforms for social trading would definitely be the market leaders. Well-backed world-renowned firms with a long trading history of millions of trades by hundreds of thousands of traders. There are only two large niche dominators – eToro and Zulutrade whose comparison you can view here.

The fourth thing relates to the actual trading process. For investors who are interested in generating steady passive income rather than quick wagers on the market, it is advisable to focus on long-term trades with low leverage, spread across a variety of instruments (or spread over a multitude of traders, with social trading). Diversifying the investment over a large number of positions which with minimal leverage will help reduce volatility. The downside is that commissions are usually taken on a daily basis, and will eat off some of the profit that can be made with such long-term positions.

The last thing to know about social trading is that there are many antagonists who claim social trading is a sham. They claim that following a successful trader doesn’t really promise anything, because of the inevitable lags between the trade execution. Over a large number of trades copied, a significant deviation should occur. That means a someone could be following a successful trader and making less money than him (or even losing). It’s extremely difficult to scientifically approve or disapprove the claim.

In conclusion, forex trading and social copy trading can be used a high-risk form of investment, but there’s no reason to jump the gun before an appropriate research that could very well make the difference between a winning and a losing investor.

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Passive Income by Renting Farm Land

Do you have any idea how profitable renting out farm land can be? If you’ve ever read about Warren Buffett and his early investments, you know that he purchased land early in his life to rent to the local farmers. It was one of his first passive income investments! If it’s good enough for Warren Buffett, I suspect that it would be good enough for the Average Joe as well.

Purchasing the Property

In my area, property is pretty cheap. Farmland can be found for about $10,000/acre. In fact, just by perusing Craigslist, I was able to find a property with a house and 60 acres for a listing price of $595,000.

Leasing the Property

So the real question in this passive income article is, “How much does farm land lease out for?” According to Jim Ochterski of Cornell University, a property owner can charge approximately 4% of the land’s value to the local farmers. This percentage is meant to cover the property tax as well as the insurance needed for the property, plus a little extra for a profit.

For our 60 acre farm, 4% would equate to $23,800 per year, which is 100% passive.

Future Value of the Property

Property is really a wonderful thing to own. If the real estate market is up, or if the city is expanding into your area, your property value could severely increase over years. Plus, it’s a nice hedge against inflation. If we kept our money in a savings account yielding practically no interest, our purchasing power would go down as the price of food and clothing went up. However, by owning property, our purchasing power remains the same (at least) since the value of the land increases along with the rise in the cost of the essentials.

Is It Worth It?

As we established earlier, the 60 acre farm would cost $595,000 initially. Property tax and insurance would probably cost 2% of that value each year, which is about $11,900.

Expenses

  • Initial expense: $595,000 (we’re paying cash)
  • Cost per year: $11,900

Income

For just renting out the property, we’d receive 4% of the value, which is $23,800. But, we should also take into account the average increase in property value, which is about 5% or $29,750.

  • Rental Income: $23,800
  • Property Value Increase: $29,750

For the first year, we’d earn $53,550, minus the expense of $11,900, leaving us with a grand total of $41,650, or 7% of our property value.

Sure, it would take us approximately 10 years to recoup our initial investment, but this income is 100% passive and the increase in property value is tax free up to $500,000 (if you are a married)! Now your income each year feels more like 10%!

:)

My question is, “What if I held onto this property and rented it out for 30 years?” How much would that 7% increase be worth to me? The answer: $4.2 million dollars! I think it’s about time for me to save up some money to buy land! 

What do you think about this plan? Would you ever look into buying land to lease to your local farmer?

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Earning a Passive Income With Kayak Rentals

Have you ever been in a kayak? Who provided it for you? Did you own it? Did your friend own one? While there are some people that actually own their own kayaks, I’m guessing that yours was a rental.

Starting Your Own Kayak Rental Business

If you want to create a passive income with a kayak rental business, you’re obviously going to have to be near a lake. I happen to live near Lake Michigan, which is absolutely beautiful in the summer time. In my area, there are definitely seasons when kayak rental is not possible (like, at least 6 months out of the year when it’s snowing), but let’s see how profitable it would be to rent out kayaks for the other 6 months.


Expenses

It doesn’t have to be much, but you’ll have to have some sort of property where you rent out your kayaks. You could rent a small area from a local business and put up a portable shed to keep it cheap. It’s not a bad idea considering the potential market is still a little uncertain (after all, we are just starting this venture and can’t predict exactly what will happen). Because your plot is so small and you aren’t really bothering your “landlord”, the rent is cheap at $300 a month.

In order to rent out some kayaks, it might be a good idea to own some. To get started, let’s say that we buy 5 kayaks at $400 a piece. A total expense of $2,000.

Along with these, you’ll need some life jackets – a random set of 10 costs you $200.

Also, if you want to make your business 100% passive, you’ll have to pay an employee. It’ll cost you $8 an hour, 7 days a week, for 8 hours a day. For the 6 months, this will cost you $11,648.

Potential Income

There’s only one way to earn an income in this business – rent out your kayaks! Your location is near the beach and you have signs advertising your business (there’s really no need to advertise any other way – all the water lovers can see your business as they walk down to the beach). Here are the average rates:

  • $10 per hour
  • $30 for a 1/2 day (4 hours)
  • $50 for a full day (8 hours)

We’re obviously not going to be able to rent out all 5 kayaks all day, every day, so what’s a realistic expectation? For the span of 6 months, let’s say that, on average, we rent out 2 kayaks for a half day. That’s a total of $60 a day.

Is It Worth It?

With the given scenario, what are the total expenses?

  • $2,000 for the kayaks
  • $200 for the life-jackets
  • $300 rent for 6 months = $1,800
  • Employee = $11,648
  • Total 1st Year Expense = $15,648

What is our estimated income?

  • $60/ day for 180 days = $10,800

If this was the true structure of our kayak rental business, we’d be losing about $5,000 in that first year, and then continue to lose about $3,000 in the years after that.

How to Make This Venture Profitable?

A sure-fire way to make this business profitable is to do the work yourself. By sitting at the kayak rental, you’d save $11,648, which would earn you a profit of $6,800 for that first summer, rather than running your business into a deficit.

If you still want to keep it passive, perhaps you could run your business by appointment only. You’d rent out fewer kayaks, but you wouldn’t have to pay your employees to sit around and do nothing this way either (they’d only have to meet your clients for the appointment times). I assume that this method would soon swing your business in the black again.

What do you think about this passive income idea? Would you ever try it?

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Passive Income With a Driving Range

If you know me at all, you know that I love to play golf. I don’t get out as much as I used to, but it’s still fun to get out and chase that white ball around for a while. Now, I do enjoy playing golf very much, but I also enjoy scoring well (I’m a little competitive), so to get my practice in, I often attend the local driving range.  Here’s the problem with just practicing however.  I only spend money, I never make it.  Here are some ideas for creating passive income from a driving range:

The Passive Income Concept Set-up

This past summer, my brother and I went to a new driving range, and it took us a few minutes to figure out the whole operation. At the usual range, there was an attendant that took the money, handed out the balls, and got in the golf ball picker once in a while to refresh the stock.

At this new driving range, there was absolutely no booth for an employee to sit. Instead, there was a token machine and a golf-ball dispenser. So, I inserted my $5 and out popped my token. I then grabbed a basket, put it in the next machine and inserted the token – in no time flat I had my basket of balls and I was off to hit some balls.

The only employment this business needed was someone to give the range a quick mow, to move the ropes, and to pick up the balls at night and load them back into the machine.

Crunch the Numbers

This sounds like a pretty slick passive income operation doesn’t it? Well, let’s find out. It’s time to crunch the numbers.

Fixed Costs

The big expense is obviously the land. In my area, I could buy a 15 acre plot of land for $100,000, but I understand that land is cheap here, so let’s say it would cost $200,000. Add the ball-retriever ($5,000), golf ball dispenser ($5,000), and token dispenser ($3,000), and lawn-mower ($3,000) and we’re looking at an initial investment of $216,000.

Variable Costs

The day to day operation costs will be the employment ($30/day) and the maintenance of the range (property tax, machinery, grass seed, water, flag sticks, etc.). I estimate a yearly expense of $15,000.

Income Per Golfer

At most driving ranges a basket of balls will cost about $6. I’d say that on average, each range will see at least 20 golfers per day, which would yield a revenue of $120 a day, which equates to $3,600 a month.

In my area of the U.S., a driving range can only be open for about 6 months, so the expected revenue for the year is $21,600.

The Final Numbers

After the large investment of $200,000, the driving range business isn’t all it’s cracked up to be. While it is quite passive, the yearly income (after expenses) is only $6,600 before income tax. It would take about 50 years to recoup the initial investment!

:)

For me, I could buy the land for cheaper – somewhere around $100,000, and if I could average 50 golfers a day instead of my estimated 20 golfers, then I could recoup my initial investment in about 4 years! Hmmm… I think it might be time to open up a driving range! 

Have you ever thought about opening up a driving range for passive income? Would it be worth it for you to try in your area, or is land too expensive?

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Passive Income with a Pool Table

Do you know anyone that owns a pool table? Most people do. But, do they earn a passive income with a pool table? There might be a few less nods in response to that question. You might as, “How in the world could someone make a passive income with their pool table?” Well, let’s dig into it!

If you are serious about starting your pool table business visit our friends at The Pool Hall Business Plan, they have an amazing business plan, as well as consulting information.

Pool Table Income, One Coin at a Time

How to start a business with pool tables: In order to make money with a pool table, you’re obviously not going to do it by charging your buddies a buck every time they rack ’em up in your basement (although, I guess you could….but you probably wouldn’t be too popular), so you can rule that option out.

I’m also not talking about hustling your earnings by winning game after game of billiards at the pool hall. This is certainly not passive, and I’m also not sure that it’s even legal.

When I talk about earning a passive income with pool tables, I’m talking about those lovely coin operated pool tables that we’ve all seen. They only earn one dollar at a time, but have you ever thought about how many games of pool are played each day? And, how short is the return on investment for the owner?

Expenses of the Pool Table

In order to make money with a pool table, you’ll obviously have to own one. So, I searched eBay, and I was able to find a used coin-operated table for only $1,200!

There might be the occasional maintenance on the table as well, so let’s just factor in another $200 per table, per year.

Oh, and if you want to make this venture truly passive, you’ll have to hire a guy to collect the money each week. You’ll pay him $20 per pick-up, so you’re paying out $1,040 per year.

Potential Income of the Pool Table

Initially, you might be thinking that this idea doesn’t have much room for growth. After all, where are all the coin operated pool tables? Just at the bar, right? Not true. Just off the top of my head, I can recall there being pool tables in hotels, restaurants, college campuses, and even workplaces as well! The opportunities are out there, you just have to get your table into their establishments.

Now, once you find a place where a pool table might earn some income, what is the typical arrangement? Well, some of the time, you might have to pay a monthly rental fee in order to place your pool table on the owner’s property, but I’d say that most of the time, you could place your tables almost anywhere for free because it’s a win-win situation. Think about it – if your pool table goes into a restaurant/bar, it will most likely draw more of a crowd, plus it will encourage the customer to stay longer and keep ordering food and drinks. That pool table is going to earn the establishment more money, and every game that’s played will put another dollar into your pocket as well.

Depending on where you place the table, you could have anywhere from 5 plays to 40 plays per day, so we’ll use a nice round number and say that your table earns $20 per day with 20 plays.

  • $20 x 365 days = $7,300

Are We Turning a Profit With This Passive Income?

If we were able to place just one table and paid no rent for it, how much would we make per year?

  • Income = $7,300
  • Initial Expense = $1,200
  • Maintenance = $200
  • Employment = $1,040
  • Net Earnings in Year 1 = $4,860

In Year 1, you can see that we earned $4,860 of pure profit and we didn’t have to lift a finger. That’s pretty impressive huh? Well, what if we took it one step further and invested our profits into 4 new tables?

Suddenly, our earnings jump from $4,860 in Year 1 to $30,300 (=(Income – Maint. – Employment) x 5 Total Tables) in Year 2! Want to see what happens if we reinvest everything back into more tables in Year 3? $181,800!!! Obviously, life couldn’t be so perfect, and there is such a thing as saturation, but I think you would agree that it has amazing potential.

Do you think you’ll ever invest in coin operated pool tables? Why or why not?

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Passive Income With a Car Wash – Cash Cow or Money Pit?

I don’t know about you, but I think about passive income opportunities every day. No matter where I am or what I’m doing, I think, “How passive is the income that’s generated in this business?” Sometimes, it’s not at all, and other times, it’s nearly 100% passive. The concept just fascinates me – I think that I’m obsessed with creating a passive income.  That’s why I thought of passive income with a car wash.

Cleaning That Car of Yours

I live in Michigan and it usually gets pretty chilly here in the winter. The snow starts flying in November and doesn’t go away completely until March or April (this year is an exception, but I’m sure we’ll get loaded up with snow pretty soon). And, since it is so cold, the only way to get rid of the snow and ice is with salt.


The salt typically does a great job melting away the snow, but it’s absolutely terrible for your automobile. If you avoid getting your car washed, that salt will start to break down the structure of your metallic frame and body. Then before you know it, your car starts turning into a rust-bucket! Then you step on that salt and bring it onto your floorboard. Without the proper floor mats, your floorboard will start to rip apart. Needless to say, where I’m from, car washes are pretty important.

Benefits of a Car Wash

Car washes are typically very passive. Once the machine is set up, all you need is a single employee to receive the payments and begin the wash (and actually, I can see this step getting automated soon as well). If your machines are built properly, there won’t be a huge amount of repairs, and your expenses are pretty low (water, electricity, soap, and…that’s about it)! This sounds like a money-making machine!

Initial Cost of a Car Wash

Initially, I started researching what it took to build a brand new car wash, and honestly, I don’t think it’s worth it. You’ll first need to find that perfect plot of land, then check the zoning, then you need to get a building permit, hire an engineer to make some drawings, contract a company to build the car wash, and then there’s absolutely no guarantee that it will make money because no one has tried to run a car wash in that location before!

The typical initial expense of a new wash can be anywhere from $400,000 to 2,000,000, depending on the number of automatic washes, and the number of bays if you’re running a self-serve wash.

If I were to invest in making a passive income from a car wash, I would start looking at the existing washes that are for sale. Then I know that the zoning is correct, I don’t need to hire an engineer or a contractor, and the best part is, I can look at the history of the business! The owner can show me the average washes per day, week, month, and the year. And, I can get a good look at the expenses!  Be weary of the previous owners income and reporting however, this is a cash heavy business and it would be very easy to skew your numbers.  You need to hire a CPA and sit down and go through all of the financials piece by piece so you can make an informed decision and also to start your business on the correct foot.

I looked into the average initial cost of the washes in my area and they ranged  between $259,000 and $1,200,000.

Recurring Costs of a Car Wash

After a little research, I have found that the average reoccurring expense is provided per car that goes through the wash – it’s typically $0.55 per car. This includes things like the water, soap, and electricity like I mentioned above, but it also takes into consideration the air compressors, the bay cleaning, and preventative maintenance.

If you really want to know how to start a car wash from the ground up here is a book on amazon which would be perfect:Car Wash Business 101: The #1 Car Wash Start-up Guide

How Many Cars For a Profit?

In order to create a profitable passive income with a car wash, about how many cars do you think you’ll need to pass through your wash per day?

Let’s say you have a $500,000 loan on your business which costs $4,683 per month and you run the business by yourself. For each wash, you charge $7, how many cars do you need to run through your wash to make it profitable passive income with a car wash (wow, feels like we’re in algebra all over again huh??)?

To break even in the car-wash business, you would need to have 727 cars go through your wash each month. That sounds like a lot at first, but when you break it down, that’s only one car per hour!

What if you could run an average of 4 cars through your wash per hour? You’d bring in a profit of $18,576 per month! That’s $223,000 per year! If you find the right location, this venture could easily be one of the best passive income sources out there!

This may sound great and all but there are pitfalls to the business as well:

  1. You are at the mercy of the water company.  Remember water companies don’t look at individual businesses when they create their rates, they look at an entire city.  If the water company passes a bill to raise their rates over the next 3 years, your operating expenses will immediately raise and your passive income from a car wash will lower
  2. Repairs and replacements of equipment can put a huge dent in the net profit for the business for the year.  Think if you only have one car wash creating a passive income.  You’re business is closed until you can get it repaired or worst case scenario which could close your business for one to two months.
  3. Who and how is going to manage your passive income from the car wash?  Are you going to go to the business every day and pick up the coins or dollar bills, count them, and deposit them?  Will you hire someone to actually pick everything up for you?  Think about how long you would have to count money every single day you had to make a deposit?  $5,000 doesn’t seem like a lot until you are counting it in quarters.  Will you start a system which accepts credit cards and then you now have a service charge every time a card is used.
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Passive Income for the Brave: Investing 101

Investing is Not Just for Econ Nerds

Investing is exciting and fun stuff. All you non-finance people, who just threw up in your mouths a little, that’s okay. Hear me out here. The whole scenario sounds intimidating, but it’s not. You find a company, like ScotTrade, or something like that, that handles investments, do a little internet research to find out what companies you want to invest in, and voila, you are on your way. Make sure you follow the buying and selling rules below, and you’ll be set. You can make a nice, tidy passive income while the stocks rise and fall.

The Buy In

You don’t have to be an Econ genius to understand basic market tendencies. It pretty much sums up like this: you, yourself, are a consumer. That makes you part of the market trends, you make little financial votes every day for companies that you believe in, just by walking in and buying something, you’re making a vote that those particular companies should go on living, and perhaps even grow. Take that principle and apply it across the spectrum of the world of businesses. If you’re a consumer, you have a little insight into what will make the market tick. If you stay up-to-date with new things, then when something uncannily wondrous crosses your path, you’ll notice it. And those are the things that are tomorrow’s best and brightest big ideas.

Take, for example, frozen yogurt. A humble food, but oh-so-tasty, it has had a hay-day with the market of late. Self-serve frozen yogurt places are popping up everywhere, and they’re cramming out the old fad: smoothies. Read this as an opportunity to garner a little extra cash for whatever suits your fancy.  Invest in companies you love anyway, then take the money that sat there and earned itself for you, and spend it on products at that company. Brilliant.

Your opinions are part of the market, so amplify them. If you like something, chances are that others do, too. Watch social media posts to see what people are talking about. It may sound over-simple, and maybe it is, but it works. Find things that seem to be beginning to trend (beginning being a key word) and invest when the ideas are just launching. With any luck, you’ll catch something on a big rise and win. It’s like playing the lottery, but with a treasure map of your own behavior and patterns to guide you to the winning ticket.

The only problem is that investing is a little addicting. Okay, a lot addicting. So, you’re gonna want to budget for it, make room for a little investing each month, and watch the money grow. I have gone from wanting one pair of shoes to wanting a shoe closet to hold my shoes. Keep in mind that the market is unpredictable. Investing doesn’t make you money on your time frame, so you can’t save up for things specifically. The market controls when you buy, sell, and put the money to use. It’s a blast to have money that works for you, and it generates an income for you while you work your 9-5.

Buy Low, Sell High

Sounds like some REALLY obvious advice, but it’s not so straightforward. When you get into the market, you will inevitably find yourself doing what most people do. You will also find out what makes the stock market a successful place for just a few people. This happens because the majority respond to inner psychology rather than reading the market and letting it tell them when to buy and sell.

When stocks rise, there’s this psychological tendency we have to think it’s going to go higher, so some people buy things because they’re “trending” and others hold onto investments until they actually can’t go any higher, and they start to sink. When they sink, we think they’re gonna drop further, so we sell. That would be called buying high and selling low, which is also known as losing money. Don’t do this. Think counter-intuitively. If it seems wrong, chances are, it could be very right in the stock market game. A few people get it right. They sell when their brains say to wait, and they buy when things don’t look good.

No one who’s walking around loaded with cash from the boom of Apple computers bought the initial investment when the company was already enormous. The people who made it big off of the rapid growth of a company found something that they thought could be big one day, and they took a chance on it. So, look for niche businesses that are heading in the right direction and invest. Start small. Learn how the market works with a little money at a time, and when you get good at it, you’ll start making a bigger and bigger passive income as you go.

Yes, investing in the global economy is a risky and somewhat depressing venture, but if you get out there and try your hand at it, you might find that this is the kind of passive income you’ve dreamt of making.

What are your thoughts? Share your investing stories with us!