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The age of 40 brings to mind images of someone who is mature, financially savvy and well-traveled. Well, I turned 40 last year and with 1 out of 3 checked, I’m off to a pretty slow start! LOL. But seriously, I really wish I had known about passive income and passive investing – well before my 40s!

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This perception has some justification to some extent. If one had followed the conventional way of getting to 40 i.e finishing high school, going to college, finding a great white-collar job after graduating, getting married to your high school sweetheart, buying a house and raising your 2.5 perfect kids then yes, absolutely – there should be no excuse for a self-respecting 40-year old to be financially savvy or at least know where their money is going.

Then there’s me.

I didn’t finish high school, but I did get my bachelors degree in finance – albeit 4 years later than everyone else and online while I was working full time with the biggest financial firm in Australia – a well-established career that I left at the age of 30 to backpack around South America for 3 months then finally settled in London for a year – where I was fortunate enough to travel to a different country in Europe every weekend.

At the time, the 2008 financial crisis turned the world upside down and somehow I landed a job in New York City where I met a man whom I fell deeply in love with, got married then divorced without any having any kids and well…the rest is history as they say.

Today I am 40, single and living in New York City. Not your conventional path to the age of 40 but somehow its worked for me and thankfully I continue to thrive.

Do I regret any of it?

Overall absolutely not! However, one thing I still kick myself about and wished I had discovered earlier is the beauty of investing and the magical things that are compound interest and passive income. The latter in particular.

I am definitely not getting any younger and I often think if I had started researching about passive income 10 years ago, or even 5 years ago my life would have been very different. Or at least it would have helped supplement my 9-5 income and may have even replaced it if only I had started investing passively years ago!

However, I am fortunate enough to have had a good career in the corporate world to allow me to create some capital to start investing now! Since I have discovered passive investing/income it has given me hope that one day I will be successful at passive investing that I can finally leave my 9-5 job.

What is passive income?

You may have heard it many times before and not taken any notice. Yes, you know what “passive” means and yes we all know what “income” means but together, these two words form a profound relationship.

But how is this even possible?

Well, that is what a lot of folks with conventional backgrounds may frequently wonder. How the hell do you make money other than working at a 9-5??? Insane right.

Despite my unconventional ways (which included despite working in finance – being completely oblivious to this concept given my unorthodox bachelorette/party lifestyle in my 30s here in NY) – I too was perplexed so I did some research.

It basically means you can make money without doing anything. “Money while you sleep”!



Make money while you sleep? That’s preposterous!

Sounds crazy but it’s true. How? There is an initial amount of upfront capital investment required – by way of surplus cash, or investing in time to learn how to do this properly. It is also commonly known as a “buy and hold” strategy.

Before I go any further into the wonderful world of passive income, I want to clarify what is really meant by “passive”. By definition, it essentially means taking no action ie earning money while doing nothing.

However, some passive income ideas do indeed require some sort of work or participation but still, not to the extent of what one currently endures with a 9-5.

I also want to point out that this is not a “get rich quick” scheme.

The idea is to start small and slow which eventually will lead to profitable and stable wealth creation over the long term – which is why at 40 I’m kicking myself for not starting sooner!

If you are fortunate enough to have accumulated a bit of savings then you can invest in certain things that actually earn you some money back by way of returns, dividends or as I like to call it ROI (return on investment).

You literally don’t need to do anything with it once invested and it sits there earning income. The longer it is held, the better the returns hence “buy and hold”.

The way I like to think about it is if you currently have your savings sitting in a normal checking account, it earns close to ZERO percent and you probably even have to pay fees for keeping it in the account.

This is ok if you need to access the money every day or need it within a year but if not, you’re potentially losing out on earning more.

For example, if you invest in the stock market and let it sit there for a longer period (eg 2-5 years), you will generate a solid rate of return on your initial investment. Almost guaranteed to be wayyyyy better than zero percent!

Over the last century, the stock markets’ average annual return has been around 10 % (less about 2%-3% due to inflation). This is a good benchmark to compare to when thinking about other asset classes.

That’s another great thing – there is actually more than one way. Here is a list of a few strategies and other asset classes:

  • Real Estate
  • Crowdfunding sites
  • Stocks
  • Affiliate Marketing
  • Various “side hustles” (eg Airbnb your apartment, create an online course, publish an e-book, etc)

Since each of these strategies is very interesting with a lot of information to cover, they each deserve a separate article of their own. For now, though I will go into one of the strategies, real estate investing, in a little more detail since I’ve been fortunate enough to have some experience firsthand.

Passive Income through Real Estate

The very simplified way of explaining how to earn passive income through real estate is by purchasing investment properties and renting them out. Sounds easy enough right? There’s a lot more to it though (of course).

Even after researching for about a year and closing on my first investment property just last month I would consider myself a newbie. There are so many things to read and research on this topic that it probably deserves its own article so in the meantime, here is a summary of some pros and cons that I’ve put together.

Pros:

  • There are so many real estate investment strategies to study and chose from based on your appetite and needs (eg buy and hold, “BRRRR” method; buy, renovate, rent, refinance, repeat, fix and flip, syndication).
  • Investing in rental properties through a full-service turnkey provider, allows you to collect an income check each month if profitable, without you lifting a finger.
  • Turnkey services provide your “one-stop shop” where they locate property, renovate it, rent it out and also do the property management in-house.
  • Strategies like multifamily syndication are also truly passive – meaning someone invests for you and you collect income checks each month as well as a multiple of the initial capital invested at the end of the term.
  • There are some creative financing strategies available if you don’t have good credit, or don’t have enough to put 20% down for the purchase of a property.
  • Investing in real estate over the long term (5-10 years at least) can create a natural hedge against stock market volatility and more attractive returns for retirement than 401k.
  • Ability to invest in affordable properties outside of the state you live in. For example, I live in NYC but there is no way I?can afford to purchase here just yet.
  • Tax benefits.
  • Although not guaranteed you can benefit from long term appreciation in addition to monthly cash flow.

Cons:

  • Not a “get rich quick” scheme and is effective only for the long term.
  • It’s not so “passive” if you are renovating, finding tenants and being the landlord yourself.
  • Usually requires a significant amount of capital to start (ie 20% of the purchase price as a deposit for conventional financing).
  • Illiquid asset and can lock up your capital for a long time – meaning once you invest you usually can’t get access to your capital until after 2-5 years at the least.
  • There are so many real estate investment strategies and can be overwhelming for newbies.
  • Generally, as a minimum, you need good credit to apply for financing.
  • Expect to pay higher interest rates if financing is not conventional.
  • Expect to pay a premium for “turnkey” services and the convenience they provide.
  • All turnkey services are not created equal and there can be a huge difference in the quality of service, integrity, and costs with some.
  • As a homeowner and landlord you are responsible for all repairs, tenant issues such as eviction, additional taxes/fees depending on local requirements.
  • Not profitable if the investment is not generating positive cash flow.
  • As with all investments, there is a degree of risk involved which you always need to educate yourself about.

How to find out more about real estate investing?

If you want to find out more about investing in real estate, I would definitely recommend starting learning today. But as I mentioned earlier it can get overwhelming with all the information out there that is readily available.

If you’re just starting out and curious then I would start with the following books. I would consider these essential for any newbie or beginner looking to learn more about passive real estate investing. I’ve read all 3 and definitely recommend all 3:

I’ve also read Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple also by David Greene. While it is an awesome read with so much great information, it’s probably more on the “active” rather than “passive” side of investing.


Even if you don’t have the initial upfront cash outlay, then don’t worry. You can make a start by investing in yourself. Start small but think big.

That’s how I started. I started reading as much as I could on this topic and I can say for sure that you will get your return on these investments tenfold just by educating yourself.

Are you thinking of investing in real estate? What has your experience been so far? Comment below!

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8 thoughts on “How I started (in my 40s) making money while I sleep with passive income

  1. When the topic of passive income comes up,I have never really thought of real estate as something that would pop up. I thought it was something of a family business because it has to deal with lands and building. Today you have taught me something new and it is very nice to see that I can easily be on my bed and make so much money. Thank you for this. I would make sure I give in.

    1. Hey Riley. I’m glad this helped you. Yes, passive in this context relates to the way the income is generated. There’s the initial work done upfront but once set up and if profitable, set it to “auto-pilot” and it can really feel like you’re making money in your sleep. Thanks for taking the time to read and comment!

  2. Passive income sounds like a great thing. To be honest though, it’s just a the way we call it, when in reallity, you always need to make some effort to get results. However, making efforts this direction is a very wise choice. Something, I’m also trying to do. Took me some time to find out how. When you young, life has a very different quality and you feel like, there are many things ahead of you and maybe you’re not collected enough to do some action towards what you really want in terms of financial safety. Gladly, now I can appreciate this need and desire of mine and take some progressive actions. It’s hard for me to think of real-estates as field I want to work on, but appreciate your article and it’s sort of inspiration for me. Thank you.

    1. Hi Dario. Yes, you are right! Strictly speaking, it’s not truly “passive” in the sense that there can be some initial work that needs to be done upfront but once it is, then the cash can flow in automatically. It also can depend on the type of investment. Glad to hear this article may have helped you. Thank you for stopping by!

  3. Thanks a lot for sharing such an amazing article on making money while you sleep through passive income. This article has really exposed me to some truth that I was actually getting all wrong and for also pointing out the fact that this scheme is not a “get rich quick” scheme. Thanks for being original, itll really help. 

    1. Hi Sheddy – thanks for your comment. Yes, there is a myriad of options available out there and so much one can learn. At first I was overwhelmed with information but for me, I focused on just one niche first then starting to explore other types of investments and strategies for passive income. I’m glad you found this helpful!

  4. Although I am not up to 40 but my story is quite similar to yours….i must tell you the difference apart from the age is that mine was a little harder than yours…but thank God i am successful today and i make good money while i sleep…thanks for sharing I know it would motivate a lot of persons.

    1. Hi David – I’m glad you enjoyed reading this. Thanks for your comment. I appreciate that we all have different challenges and I’m pleased to hear that you have gone through yours successfully! 

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