3 investors share the strategies they’re using to earn passive income and build wealth while they sleep
- Building a side hustle is a great way to increase your income — but it can be time consuming.
- With passive income the idea is you do upfront work and then the gig pays you while you sleep.
- Investors who have built passive income streams share the strategies they used.
Building a side hustle or working a part-time job is a great way to supplement your income, but it takes time.
You are actively earning money.
Whereas with passive income, you do the initial work and then the gig pays you while you sleep. Or, at the very least, it compensates you for working fewer hours.
Insider spoke with individuals and couples who have created passive income streams that are assisting them in building wealth without putting in a lot of effort.
Erika and Kareem Hall invested in 2 franchises and regularly profit 5-figures per month
Erika and Kareem Hall have made more than $1 million in revenue between their two Soccer Shots franchises since purchasing their first one in 2018, according to profit-loss statements obtained by Insider.
They’ve made six figures in revenue in a single month and consistently make five figures in profit.
Erika is an associate professor at Emory University’s business school, and Kareem runs his own consulting firm. They both work full-time and spend one to two hours per week on Soccer Shots.
“I absolutely believe it can be a lucrative passive income stream,” Erika said of franchise investing. “The advantage is that there is a blueprint.” This has already been done. There are all of the resources and templates available. In contrast, if you’re starting a business, you must create everything from scratch.”
The key to making it passive is to choose a franchise that allows you to be an executive owner, which means you own the company but delegate management to someone else.
An owner-operated model, on the other hand, does exactly what its name implies, putting you at the center of the business’s operations. “That would have been us actually managing the company and taking a salary from it,” Erika explained. We currently pay someone a salary to run it for us and then keep whatever profits we make. If we ran it ourselves, we would have to quit our jobs or take it on as a second job with a salary.”
Kent He spends 2-3 hours per week running an Airbnb business
Kent He began investing in Airbnb as a side hustle. However, after buying two investment properties in Scottsdale, Arizona and converting them into bachelorette-themed Airbnbs, he began generating enough cash flow to cover his family’s expenses and quit his day job to go all-in on real estate.
He is now a full-time real estate investor, but he only devotes two to three hours per week to the short-term rental business.
Because “most everything is automated,” he explained to Insider.
Airbnb investing does necessitate a significant amount of time and money up front. He spent a significant amount of time learning about his market and the types of guests who typically visit.
He drew a dataset of the top 200 Airbnb listings in Scottsdale using PriceLabs, a software tool. He then went to the top listings’ reviews and searched for keywords like “family” and “bachelorette.”
“About 40% of the reviews for the top 200 listings mentioned the words’bachelorette’ or’girls trip,'” he said. “That’s how we found an outsized opportunity in the market.”
He then created a bachelorette-themed space complete with a “beauty bar” complete with individual vanity mirrors, a Peloton bike, wall murals, and backyard games such as cornhole. He also created a digital guidebook with comprehensive information about the property, amenities, and local recommendations.
He attributes much of his success on Airbnb to his ability to understand his guests and their needs.
“If you can help them plan their trip a little bit better, it relieves a lot of stress off the coordinator — and usually, that coordinator is the one who will leave your review,” He explained. “So I think it’s a win if you can understand the stresses in their lives and reduce that stress.”
