Over the last few years, I have been building the money-making machine that generates passive income for my family in three different currencies including the Chinese RMB, the Polish PLN and the American USD.
As of today, all of our family investments in real estate, bank deposits, online business and stocks have already been set up. These four different investments will all generate us passive income streams from rent, interest profit and dividends respectively.
I am looking forward to steady gradual increases in passive income month after month to grow the wealth snowball.
Different ways to increase passive income
Here are my ideas how I am planning to increase passive income for my family.
1. Rent as passive income from real estate
Current: Increase rent. This can be done when the current rental contract expires. Increasing the amount of monthly rent may not be possible when long-term rental contracts are signed with the tenants unless the annual increase is clearly written down.
Future: Buy another rental property. While this will increase the monthly amount of passive income received from rent, there will be more property management and maintenance required. Purchasing a property always requires a significant amount of capital for down payment, and even more when the whole price of apartment or house is paid in cash.
2. Interest as passive income from bank deposits
Current: Reinvest all maturing deposits at higher interest. This will be possible when interest rates in a country increase. Reinvest the money the same day for maximum returns.
Future: Start new deposits using incoming cash. It is always worth checking whether any other banks offer promotional rates on certificates of deposits.
3. Profit as passive income from online business
Current: Add more articles on the current website. Usually, earnings from ads displayed on the website are positively correlated with the number of visitors. It means the more visitors to your website, the higher the earnings are going to be.
Future: Launch another website. This requires having a good idea and spending a considerable amount of work. Usually, the earnings in the first year after launching are very low.
4. Dividends as passive income from stocks
Current: Reinvest dividends at higher yield. This may require rebalancing the portfolio to some extent. Looking for good companies with temporarily low prices will boost the dividend yield to 5% or even more.
Future: Buy more stocks with higher dividends. Companies that pay high dividends are often less growth-oriented. So, if you are income investor like me, you may want to focus on utilities, healthcare and consumer defensive stocks rather than technology stocks.
In short, as our passive income from investments grows over the years, I have slowly started thinking about early retirement.
It will be possible for me and my wife to retire early in our 40s. I could focus entirely on managing the family wealth through the stock market and working on my website(s). This is the ultimately plan for my early retirement.
At some point in the future, we hope to live off passive income as the family thanks to decent cash flows of passive income from our investments.
