Passive Income

Let me tell you a little secret... Come close, I'll whisper it.

I'm lazy.

I know. It's hardly a surprise. Hell, all you'd have to do to figure that out is just read this thing. I'm about as consistent with posting as Britney Spears is sane. That is, not very.

Being both lazy and greedy, I think a lot about passive income. While I'm a contrarian stock investor, I have investments in many things that are designed for one thing and one thing only: passive income.

Here are some ideas for passive income, including some you probably haven't thought of:

1. Bonds/Preferred Shares

Yes, I realize this one is a no-brainer, so we won't spend much time on it. Now is a great time to buy bonds, with yields on corporate bonds are higher than they've been for years. Individual Canadian bank preferred shares are yielding above 7%. If you gave me just $25,000, I could create a very secure bond portfolio with a decent 6-7% yield.

2. Real Estate

Right now is not the time to buy investment real estate in most parts of Canada. But keep your eye on it, remember my golden rule for buying real estate. (gross return is double the return of a high quality corporate bond) Once it reaches that point, it becomes a great cash flow investment, without much work.

Or it you're lazy, buy a REIT. Remember though, that the leverage associated with physical real estate will give you a greater return on the upside than with a REIT.

3.Dividends

Yes, you can create passive income with dividends. If you can ignore the market's price fluctuations, it might be interesting. Keep in mind though, that common share dividends are hardly secure.

4. Mortgages

I just said a bad word, didn't I?

Know somebody who desperately wants to own a house, but can't qualify for a mortgage? Why not provide one for them? A 9-10% return would be very easy to get, and could be accomplished with very little work. You would be put on title as holding the mortgage, so you'd be secure.

This one isn't for the faint of heart, but isn't hard to do and can be a great investment.

5. Writing a Book

Alright, maybe not. In theory, this is a source of passive income. In reality, hardly anybody writes a book. And out of the people who do, basically nobody makes money.

There's probably more, but it's late, and once again, I'm lazy.

By the way, the following are NOT examples of passive income:

1. Having a blog

I have a blog, and it's hardly passive income. If I was serious about monetizing this thing, it would take a hell of a lot of work.

2. Ebay

Working is not passive income. Plain and simple.