Courtesy of Tiffany James, Jasmine McCall, and Shaan Patel.
- You don't need a lot of money to start investing or creating a business that generates passive income.
- Create a monthly schedule and work with a community to keep you accountable and celebrate your wins.
- You don't need the perfect product, or to know everything, to start.
- Read more stories from Personal Finance Insider.
Everyone wants to earn money in their sleep.
Getting started is the hardest part, especially if you feel like you don't know the right people, you don't have enough money to get your idea off the ground, or simply don't know what to do to make passive income.
Here are seven tips to starting new passive income streams, from three millennial entrepreneurs who have earned at least six figures in passive income.
1. Start small
Tiffany James, 26, gradually invested $10,000 in the stock market in 2019, and has since made her first million as an investor. She's now teaching other Black women how to make passive income from investing in the stock market called Modern Blk Girl (MBG).
When people ask James how to start making passive income, typically their biggest fear is not having enough money to invest. She responds, "How many times did you go to brunch this summer?" James suggests redirecting that $60 brunch bill into investing, and watch what happens.
2. Join a community to keep you accountable
James says the key to her success is finding a community to help her stay accountable. Through MBG, she and her friends are able to nerd out on stocks, bonds, long-term LEAPs, and many other niche stock market knowledge.
James started investing with a group of Black creatives who shared the same values and had similar life experiences. Those connections kept her accountable, and inspired her to start her own community specifically for Black women, where she felt a "big sister-little sister connection."
3. Start with what you know
Jasmine McCall struggled with poor credit for years. McCall, 30, spent hours researching her consumer rights, disputing negative marks on her credit report, and paying down debt. She now shares her credit expertise by offering digital courses that help people improve their own credit — a passive income stream that earned $100,000 in just four months.
McCall started with what she knows best: how to raise her credit score and how to empower herself when going toe-to-toe with credit collection agencies. With that knowledge, she was able to build a passive income stream that helps others.
4. Listen to what your community needs
McCall's products flew off the virtual shelves once she started promoting them on YouTube. Aside from helping her generate sales, she was able to monetize her videos and earn an extra $3,000 per month.
"I didn't go into it with the intention of being a creator," she says, "but there were just so many additional questions that I just had to keep making content." McCall's understanding of what her community needs helped her create the most effective products in a short amount of time.
5. Plan on perfecting your methods over time
Shaan Patel, 32-year-old cofounder and CEO of SAT and ACT prep company called Prep Expert, earns $12,000 per month in passive income from selling digital courses.
Patel says he follows Malcolm Gladwell's 10,000-hour rule, which states that it takes 10,000 hours to truly master a skill. "Do I think you have to have 10,000 hours before you start? Absolutely not," Patel says candidly.
He adds that "a few hundred hours" should be enough to get the first version of your product out. (In fact, Gladwell's rule has been disproved.) "When I developed my first SAT course ever, I was probably 500 hours in," Patel says. "But over the last 10 years, I've spent over 10,000 hours perfecting my courses."
6. Get organized
In addition to digital courses, Patel has six other income streams that help him earn $25o,000 each year. On top of his practice as a physician and running his own company, Patel says creating a monthly schedule to prioritize passive income is the key to making it happen.
"Given my own busy calendar, I schedule the fifteenth of every month to invest and find new ways to optimize passive income," he says. In that scheduled time, Patel compares interest rates, weighs the pros and cons of different investments, and moves his money accordingly.
7. Just get started
Whether you're starting with $100, an imperfect product, or something as basic as a simple employer 401(k) match, James, McCall, and Patel all recommend simply getting started. Start investing $10 to $100 each month on an income-generating project — even sitting down to have a coffee with someone you admire counts. Start investing time researching stocks, cryptocurrency, or bonds.
Patel suggests starting small, with a high-yield savings account. "Once you get a deposit of $10 or $20 of interest in your account, you will be hooked and looking for more ways to optimize passive income streams."
source https://www.businessinsider.com/personal-finance/passive-income-tips-millennial-entrepreneurs-2022-1