Lazy Man, Author at Lazy Man and Money

Designing a FIRE Community – (Part 1 – Introduction)

June 19, 2019 by Lazy Man Leave a Comment

I want to preface today’s article by asking for a quick favor.

Could give this blog a vote/nomination for a Plutus Award? The annual awards are decided by a nonprofit, the Plutus Foundation, that supports community-based programs that enhance financial literacy. In short, it’s the personal finance awards show.

My blogging career is a lot like Jaime Moyer’s Baseball Career. He played a long time, but usually just a little above average. I’m in my 13th year as a personal finance blogger, but I’m still the Susan Lucci or Ash Ketchum when it comes to winning an award. I was nominated for a lifetime achievement award once, but it was such a crowded field of much better bloggers that I’d be surprised if I got a vote.

Lazy Man and Money may be different things to a lot of different people. For example:

The main objective from the very first post was to explore ways to reitre early through financial independence.
Since my wife is in the military, I also cover some military money issues.
That military career directly lead us to become accidental landlords, so we’re big real estate investors now
I’m firmly in Generation X, so one could say that Lazy Man and Money deals with many Generation X issues
Over the last few years I’ve written a lot about being a Stay-at-Home-Dad to our boys (ages 5&6), so this could be a family blog
I often write about investing, probably more than most blogs, so Lazy Man could be an investment blog
My focus on helping people avoid MLM scams could be seen as deserving for a Biggest Impact award

If I had to choose one, I think the best fit is family blog. So if you’d like to nominate me with this one click I’d appreciate it.

However, if you want to nominate here for other categories are some easy links for those (roughly in order of how I view Lazy Man and Money):

Now, let’s get to today’s article…

Nearly 12 years ago, I wrote an incredible article around a grand idea. That was my memory of it. In reality, it was a laughable 260 words of unpolished slop… and it still got 14 comments.

The idea: A community designed around frugality

The goal of the article was to figure out how cheaply you could live. At the time, we had an expensive $2000/mo. rent in Silicon Valley. I wondered about whether we could live in Texas with solar panels. I thought that we might be able to telecommute for work and have one cheap used car for transportation.

I then came up with the idea of a community that was specifically designed for cheap, frugal, sustainable living. The idea was to live in tiny houses with Murphy Bed like furnature. The community would use some kind of car share like ZipCar.

My concluding thought:

The community I describe could be extremely cheap to live in.

Imagine how much money you could save with a normal salary.

How soon could you retire if you could really keep your expenses in check?

I would have called it the Lazy Man FIRE community, but back then personal finance bloggers never used the term FIRE. However, you can see that back in 2007, Lazy Man and Money was indeed a FIRE blog.

None of my article suggestions would qualify as rocket science. It was simply looking at what we typically spend most of our money on, housing and transportation, and trying to hack it to be frugal. Eliminating our energy expenses with solar panels is another easy win. I think telecommuting is much more common now.

Of course most people use Uber and Lyft instead of Zipcar now. Of course the Uber gPod isn’t quite ready for prime time yet. That’s what I’m calling a futuristic self-driving, solar-powered electric, on-demand car fleet.

Over the next few weeks, I plan to dig deeper into various aspects of what this FIRE community could look like. I’ll look into possible locations, housing styles, transportation possibilities, food, and utilities. I may do a supplemental version on college costs and health care. I’ll hopefully try to put some (very rough) real numbers into what expenses in this planned community would be.

Five Causes of Overspending

June 14, 2019 by Lazy Man 1 Comment

We’re still in the summer hole where the kids are out of school, but camp hasn’t started. My wife is still working and finishing up the finals on her last class in her pharmaceutical regulation MBA*. She’s spending dozens of hours running a raffle fundraiser for the state’s pharmacists**.

For the last couple of days, it has just been me and the boys. The good news is that we’ve been able to spend some real quality time together. We’ve gone to the beach. We started a pizza company.

One thing that I haven’t done? Thinking or writing about money (other than our virtual pizza customers). That’s a good thing, like the next evolution of money is not worrying about it much.

Today, I wanted to dig into old notes that I had from a online chat with a friend. Again, since I haven’t thought about this much, it may be best to get the ball rolling and have a community effort filling more ideas in the comments.

Because the conversation with the friend was so long ago, I don’t remember the background or context, and my notes are shoddy to say the least. The gyst of the conversation was that there are five reasons why people overspend. (There may be more, but these are the ones that we identified.)

1. Keeping up with the Jones

My friend is excellent at reigning in his spending on “stuff.” I’m just very good. I have a weakness for children’s STEM toys (as you can tell from above). I don’t feel the need to have the biggest house or nicest car. In fact, with the amount of dogs, kids, and beach my car goes through, it’s not worth having a nice car.

Personally, this can be a bit of a trap because our kids go to a private school where most of the people are wealthy. The average “Jones” there has a lot of money to flaunt.

2. Advertising

Robert Palmer sang it best, “you like to think that you’re immune to the stuff, oh yeah.” Yes, I do like to think that advertising doesn’t effect me. I’m pretty analytical with my purchases and planning. However, it would be foolish for me to pretend that I am immune to it.

3. YOLO Mentality

I used to laugh at the Yolo Only Live Once (YOLO) Mentality. It can almost be literally used to justify any action. At the same time, there’s a kernel of truth to that idea.

In fact, in the past we used to say, “You can’t take it with you”, meaning that money isn’t going to do you a lot of good when you die. I personally have a lot of trouble of with this balance. I almost always go with the option that involves not spending money. However, there are a few times when I missed out some really great experiences. For example, Weezer went on a short tour playing only stuff from the blue album and Pinkerton (my favorites) and I cheaped out.

4. Self-Licensing

Self-Licensing is a little like the YOLO mentality above. However, in this case you aren’t spending because “you only live once.” Instead, you are spending because “you deserve it.” For example, you might impress the boss with a great presentation, to celebrate you go out and spend $50 in drinks at a bar.

I’ve been doing a little self-licensing myself lately. When I get through a tough day and it more or less went okay, I’ve been having a Chipwich knock-off ice cream sandwich from Aldi. It’s not very expensive (about $0.75 each), but it isn’t healthy at over 300 calories.

5. Convenience

Spending for convenience may be one of the reasons we can relate to most. Have a tough day and don’t want to make dinner? There’s a Chipotle app for that. Don’t feel like making your own coffee in the morning? There’s a place for that as well.

My big convenience spending comes in home maintenance. I don’t like to do yard work and I’m not very handy with a lot of other stuff. Fortunately, I find it relatively convenient to make some slow cooker meals that can save us from going to restaurants.

Final Thoughts

What are your overspending urges? Can you find any new categories that I missed? Let me know in the comments.

* I think it’s notable that we’ve made healthcare so complicated in the US, that pharmacists like my wife are pushed to get an advanced degree on what seems to amount to man-made political problems. This isn’t my area of expertise and maybe all other countries have this issue.

** You’d think that selling raffle tickets wouldn’t be time consuming. Coordinating the paper trail of people selling (and losing) paper tickets is a mess. I thought that an online system would be easier, but it currently goes against Rhode Island law.

Some of the links on this page may be affiliate links. We may make money if you buy something that you clicked on.

Alternative Income Update: May 2019 ($6,939.60)

June 11, 2019 by Lazy Man Leave a Comment

It’s almost the middle of the month, so that means that I have the final alternative income numbers for last month. It can take awhile for the tenants to have their rent checks in and for us to have the mortgages paid.

May was the first month in a long time where I didn’t feel overwhelmed and overbooked. Although that wasn’t true for the beginning of the month. My wife had a week of work travel and we did a lot of cleaning for Mother’s Day.

The kids’ obsession with Pokemon continues in its 11th month. I continue to leverage that to teach them (and myself) new things. For example, they wanted to learn Japanese, and they got a 20-day streak on Duolingo. We’re taking a little break and getting back to our normal bedtime reading of books. I’m still moving forward myself with Japanese with a streak of 40+ days. I’m doing the smallest amount possible each night, so I’m not good at all, but I find it uplifting to see the consistent growth from the steady habit.

I’ll mix in some pictures from the month throughout the financial update, because some people find numbers boring. (But not you or you wouldn’t be here!)

If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll have a lot of questions.

Lazy Man’s Alternative Income – May 2019

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

The last month I reported, April, had us sitting almost all the dogs imaginable. May was a 33% drop-off, but it was still a top month for the year. That’s because Memorial Day is a big travel day and holiday pay kicks in.

Blogging income for May was significantly below average. For some reason, advertisers stayed away. Maybe it’s the start of the blogging summer slowdown.

Our son’s Kindergarten class had a field trip to a pond to investigate the life in that habitat. Parents were invited and my wife and I made up around a quarter of those attendees.

In April, we were on vacation and these combined for a total of $4,971.13. In May, it was:

Total Blogging + Dog Sitting Income: $3,428.60

I knew I wasn’t going to keep up with the record-breaking April performance, but I’ll take an above average number. It’s still moving in the right direction.

Here’s a historic chart with the red line being a 3-month average:

2. Rental Property Income

Zillow said our rental properties were worth 1% more than last month. As with every month, we paid off a couple thousand of mortgage debt. It is boring, but in a great, slow and steady way.

We now have 55.93% of the equity in our properties with an estimated combined rent of $3,325. The rent number is after insurance, property taxes, and condo fees. That’s so we can estimate what we’d really be taking home after expenses.

If you multiply $3,325 by 55.93% you get $1,860 in estimated monthly alternative income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 28 months, we’ve seen the number grow $686/mo. That’s like giving ourselves an annual $8,232 raise until the end of time from where we were nearly 2.5+ years ago.

A year ago, I had to ask on Twitter what Pokemon was. This month, we went to the premier of Detective Pikachu and brought some friends. I’ve been a fan of the Marvel Cinematic Universe for a long time, but, in my opinion, Detective Pikachu was an objectively better movie than Endgame.

As the years march on, the ratio will grow to 100% of the $3,325 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 income I mentioned in the FAQ.

In the previous report, the rental property income was $1,835. This number always moves slowly as it only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. Later this year, we should be able to raise the rents a bit.

Total Rental Property Income: $1,860

3. Dividend Income

For the third straight month May did little for our portfolios. For the April report, I took the numbers a little late on May 11th due to the beginning of the month rush. That was after Trump escalated the trade war with China. A few days ago, when it was time to get the numbers for all of May, the Tariff Man was back with Mexico in his sights.

Homemade S’mores aren’t just delicious. They are a reminder that some of life’s best little pleasures can be very cheap. (There’s no hiding the Pokemon shirt. And the shoes are “more comfortable” on the wrong feet.)

These incidents temporarily scared the market, but the timing happened to be when I was taking the numbers. Just how boring were the numbers this month? Take a look:

Total Dividend Income: $1,651

Last month, it was $1,659, so we lost $8 of theoretical monthly money from theoretical dividends. That’s the third month it was between $1650 and $1660 after being up from $1372 earlier this year.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some residual income from books, movies, or music, we’d include that here (but we don’t have that).

The stock market goes up and down fast which makes the dividends calculation fluctuate a bit. The rental property income keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen.

The kids’ school had a huge gala outside in a tent. I thought it was incredible, but my wife thought it was just “meh.” It was great to talk with the teachers (and even other parents) in a much more relaxed setting.

Having both types of income working together for us is great. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate event. We’ll still likely get rent checks if there are futher tariff fears. We’ll still get dividend checks if a tenant is late paying one month.

Very Close to Passive Income: $3,511

Last month it was $3,511, so it’s up $17. Last month was an all-time high, so we continue breaking records. It has grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these two sources to $42,128. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 9 years from now when the mortgages on the investment properties are paid off. Add in stock market growth (of a conservative 4%) and this number could reach $85K/year or more.

Final Alternative Income

When you add up “dogs and blogs” to the “very close to passive income” you get:

May’s Alternative Income: $6,939.60

That would be $83,275.20 for a whole year. I had been trying to get this number over $100,000. I made it in the previous report, but it’s dropped back down.

That largely hypothetical annual income for writing on a blog, taking care of dogs, and investments feels a little like a dream. In the long term, that 100K+ would be a lot more income than we’d need. Here’s what our expenses for the next 45 years looks like.

These numbers don’t include any of my wife’s bread-winning pharmacist income, her NOW VESTED military pension or some of the freelance work I’ve been doing over the last several months.

We had our first visit from the tooth fairy this month. It went so well that we had another visit in early June. (Yes that’s Pikachu’s ears on the shirt.)

As always, I’m still hoping to write a book someday. I’m probably going to tip my toe into self-publishing soon. I would love to talk to a real a publisher, but I don’t want to take on the “job” of writing. If you know someone who I could talk to contact me.

Net Worth Update

My net worth updates aren’t very exciting as I don’t share the exact numbers. That’s why it’s just a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth can be useful, I think? (Let me know in the comments.)

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try. For full disclosure, I might make a few dollars if you do. For more full disclosure, I haven’t made a dollar from that suggestion this year.

The stock market was down, but it was just a small amount. Our real estate, including our own home, was up around 1% across the board. Our net worth overall went up 0.73%. For the year it’s up 21.63%, a large percentage of that was based on a website sale that I had at the beginning of the year.

I always have to remember that percentages can be weird due to the law of large numbers. Imagine someone with a net worth of $100 finds a $100 bill on the ground. Instantly it doubles his/her net worth. As our net worth grows larger, the percentage of growth will come down too. You’d rather have 10% growth of a million dollars ($100,000 gain) than 20% growth of a $100K ($20,000 gain), right?

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask Should I Include a Pension in Our Net Worth?. I decided that it does make sense to do it. It’s not easy, but I came up with some ways to figure out what a pension is worth. In the end, it seems my wife’s may be worth $2.3 million. However, like all the money mentioned in this article, it isn’t immediately spendable cash.

However, because that would ridiculously dominate our net worth, I think I’ll include it as two separate numbers in our spreadsheet. Since I don’t share the numbers anyway, except for these hints, it shouldn’t matter much.

How was your May? Let me know in the comments.

Reviewing Two Years of Stock Picks

June 6, 2019 by Lazy Man 7 Comments

Today’s article is going to be a quicker one. I’ve been attacked by the allergy monster over the last couple of days. When I’m not sneezing, I’m just trying to get a breath of air in.

I feel like I’m falling behind on everything and with this being the last week of school for the kids, there won’t be much catching up next week. Some blogger dads were talking about what they wanted for Father’s Day and I think everyone universally said the same thing, “Some time off!”

Today, I wanted to do something that’s a little controversial – review stock picks. I’m a big believer in index funds. It’s the “Laziest” path to wealth. For many people, investing advice can be as simple as just keep buying up shares of Index 500 ETF stock. I’m a little more diversified, but that’s my general investing philosophy as well…

… except that I like to have some fun too!

I can’t shake the idea that there are people out there who bought Amazon at $3 a share and are enjoying it at $1700 a share now. How can that feel anything less than awesome, right?

I know that I’m not going to find the next Amazon. Even if I did, I’d probably sell it at $6 and collect my sweet 100% return – while I miss out on the $1700 per share gains.

That doesn’t stop me from taking a little side money, looking for some big companies that aren’t doing so well, and investing with the hope that they’ll double my money. Every now and again, I write an article about stocks that I think could do just that.

Let’s review and see those stocks have done:

Five “Bargain” Stocks to Consider Buying Now

I wrote his on August 24, 2017. The dates on my articles reflect the last time they were updated, so it’s easiest to use the first comment date as a guideline for when the article was written.

The stocks I picked at the time were: Under Armour, IBM, SNAP, Chipotle, and Twitter. They each has some kind of sad story to tell. Under Armour had the death of retail. IBM had years of no growth. SNAP looked like it was going to lose to Instagram. Chipotle had people getting sick from their food. No one knew how Twitter was going to grow or make money.

Besides their sad story, they had two things in common, they were household names and I didn’t see them folding up shop any time soon.

Here’s what their performance looks like:

Stock	Symbol	Invested	Price Then	Shares	Price Now	Value Now	Growth
Under Armour	UAA	$1,000.00	$16.68	59.95	$25.73	$1,542.57	54.26%
IBM	IBM	$1,000.00	$140.50	7.12	$131.46	$935.66	-6.43%
Chipotle	CMG	$1,000.00	$307.00	3.26	$687.40	$2,239.09	123.91%
Snapchat	SNAP	$1,000.00	$14.00	71.43	$13.51	$965.00	-3.50%
Twitter	TWTR	$1,000.00	$16.89	59.21	$36.48	$2,159.86	115.99%
		$5,000.00				$7,842.17	56.84%

I think it would be safe to say that Under Armour, Chipotle, and Twitter were home runs while IBM and SNAP were flops.

Actually, I don’t view IBM or SNAP as big flops. IBM has paid out around a 5% dividend during that time, which isn’t factored into this pure stock price view. SNAP would get under $5 a share. I loaded up at around $6 and change and today have seen it double. It’s one of my most successful stocks.

I had personally already loaded up on Twitter stock at around $15. So while the price did get to around $47 and has been off of that for awhile, I am comfortable with it in the mid-30s.

Finally, I did buy Chipotle almost as soon as I published the article and sold it when it doubled. I never bought Under Armour, but thought about it as it went very low before doubling to today’s stock price.

With a total performance of around a 57% gain over nearly two years (plus dividends), I feel like these calls would have worked out well.

Sky-high Market? Seven Value Stocks to Consider

This was a fun article, because it was nearly exactly 1 year ago on June 10th. I started it off by explaining it was our “summer hole”, which is the time when the kids get out of school, but camp hasn’t started. That gap is getting easier to manage as the kids get more self-sufficient at ages 5 and 6, but it was tough when they were very little.

For this article, I was looking at a stock market that had reached new highs. I was concerned that valuations were just out of control. Some of these valuations came from big tech stocks. I thought it might be safer to move to old school stocks with a solid history of paying big dividends. There was no expectation of hitting a big home run here, because these consumer staple stocks aren’t likely to experience incredible growth.

The stocks I considered a year ago were: GE, Colgate-Palmolive, Johnson & Johnson, Proctor and Gamble, IBM (again), AT&T, and Disney. Here’s a look at how they performed if you invested $1,000 in each. Remember that these are mostly big dividend paying stocks and those aren’t included in this simple formula*.

Stock	Symbol	Invested	Price Then	Shares	Price Now	Value Now	Growth
GE	GE	$1,000.00	$13.11	76.28	$9.90	$755.15	-24.49%
Colgate-Palmolive	CL	$1,000.00	$61.71	16.20	$73.20	$1,186.19	18.62%
Johnson & Johnson	JNJ	$1,000.00	$120.83	8.28	$136.90	$1,133.00	13.30%
Proctor & Gamble	PG	$1,000.00	$74.69	13.39	$107.42	$1,438.21	43.82%
IBM	IBM	$1,000.00	$139.46	7.17	$131.49	$942.85	-5.71%
AT&T	T	$1,000.00	$31.78	31.47	$32.10	$1,010.07	1.01%
Disney	DIS	$1,000.00	$102.36	9.77	$136.74	$1,335.87	33.59%
		$7,000.00				$7,801.34	11.45%

In the last year, the S&P 500 has returned 1.73%, so 11.5% returns plus dividends is much better than I expected.

The only stock you really wanted to avoid on this list was GE. Guess which stock I bought the most of? GE! What buzzard’s luck! Due to some dollar cost averaging, I’m not down that much, but they also cut their dividend to a penny.

I also bought Proctor and Gamble, but I ended up selling it after it went up around 15% or 20% soon after I bought it. Since I invest in retirement accounts, I don’t care to hold for long-term capital gains. I also still hold IBM, which just keeps paying that dividend.

I’m most surprised by Johnson and Johnson being up over the last year. I thought the lawsuits from the baby powder buried them.

I’m kicking myself for missing out on investing on Disney. I mentioned a year ago that their Disney+ service is going to be big. However, I got wrapped up their mess of an ESPN division. I also didn’t have cash on the sidelines and didn’t feel strongly about selling other investments to buy into Disney.

Lessons to take away from stock picking

It’s difficult for me to reconcile stock picking. On one hand, I know it is better to index. On the other hand, it seems like I generally do pretty well. I’m not sure this is enough of a sample size to say that for sure though.

Also, I know that I sell my winners early, so even though P&G might be up 44% above, it wouldn’t have been that way for me. At the same time, I have loss aversion, so I continue to cling on to GE hoping that some day it will return my love.

I’d like to hear from you in the comments. Does this review of all (good and bad) the stock picks over the last couple of years convince you? Did I maybe get lucky?

* Maybe someone can suggest a better tool that includes dividends in the comments?

The Passive Income Pyramid

June 3, 2019 by Lazy Man 2 Comments

Passive income is difficult to come by. Sure we’d all like money for doing nothing, but that’s hardly sustainable. Some have argued that passive income doesn’t really exist. We’ll have to save that question for another day. Today, I want to talk about income that is “passive-ish.”

Every month, I write an article about our five income streams. I focus on the four that are “passive-ish.” Here is one visual representation of those income streams:

This is my passive income pyramid. The income stream at the bottom is not passive at all. As you move up the pyramid the income streams take less and less work.

Navigating the Passive Income Pyramid

Let’s work our way down from the top:

1. Investment Income (Passive Income – 100%)

This is any interest or dividend income that you earn from various investment securities: Stocks, Bonds, CDs, REITs, etc. Look for this income in your brokerage or bank account. You typically don’t need to do any work other than the initial purchase of the investment.

The big downside to this type of income is that you have to earned the money before you can invest it. If you are a fan of the 4% “rule” a million dollars will likely provide you with $40,000 of passive income for a reasonably long pyramid of time.

2. Real Estate (Estimated Passive Income – 80-95%)

Being a landlord is clearly a job. However, it’s often just a few days of the year. There’s work in changing tenants and when appliances break down. The rest of the time, you can mostly cash rent checks.

Like the investment income above, you have to earn the money before you can invest it. However, due to leverage, you may only need 20% (or less) of the money to start with.

Note: I used a range of estimated passive income as a property manager can take the work out of being a landlord.

3. Dog Sitting (Estimated Passive Income – 70%)

Dog sitting is clearly work too. However, it’s work that my kids can do or at least help with. I’ve made over $50,000 dog sitting on Rover. (Read my review here)

There are some downsides with dog sitting. It doesn’t pay a lot. Some people don’t like dogs. It’s much easier to do if you work from home. It helps to have a house with a yard. You give up flexibility of travel or going out.

However, I can make some money while I’m doing a different job, watching Netflix, or even running some quick errands.

4. Blogging (Estimated Passive Income – 50%)

Blogging for dollars is a lot of work. Most people don’t make anything. I think I was lucky that I got started a long time ago. With around 2500 articles over 13 years, this website brings in some solid passive income. I have had some months where I was away on vacation and there was still a decent base income.

The downside is that it takes a lifetime to write all the content. You also have to promote the content which means being active on social media. It took me approximately 2 hours to make the above graphic as I struggled trying to figure out how to edit EPS vector graphics files in LibreDraw. I finally gave up and used a regular graphic editor, which still took more time than you would imagined.

5. Career / Job (Estimated Passive Income – 0%)

This is straight up work. You put in the hours and are paid accordingly. You don’t work, you don’t get paid (with the exception of standard vacation time.)

You could reasonably argue that this doesn’t belong on the passive income pyramid at all. I decided to include it as a comparison for everything. Also, it’s likely the main source of income of people reading this.

My main motivation for creating this pyramid was to highlight the “passive-ish” levels above this. These levels form what I call “alternative income.”

What is Alternative Income?

I’ve been writing about alternative income streams for years. Other than my alternative income report, I don’t write about them too often, because they are hard to come by.

While these four are our alternative income sources, you might have another source. Maybe you wrote a book (even an ebook) that sells 100 copies a month. Maybe your first 4 mambos didn’t pay off, but you Lou Bega’d some big music royalties on the 5th try. Maybe you developed an eCourse and people pay to learn that skill. Maybe you own a bunch of vending machines and collect many quarters every month.

Where do all those fit on the Passive Income Pyramid? I’ll leave that as an exercise for you. I’d put Bega’s towards the top and the vending machines towards the bottom.

While I happen to have to have more of these alternative income streams than most, quantity doesn’t beat quality. There are many people with a huge amount of investment income that can live a 100% passive income lifestyle. My wife’s military pension will fall into that category as well. Some have real estate empires that they’d automated well. To live a passive income lifestyle, you don’t necessarily have to have a lot of alternative income streams, just one really good one.

Can you think of some more alternative income sources that could fit on our pyramid? Let me know in the comments.