Passive Income 2019: How I now earn $7930 per month passively

What's up you guys? It's Graham here. So, I think this video topic has become somewhat of an annual tradition because, on March 3rd, 2017, I posted a video explaining how I was making three thousand nine hundred and fifty dollars per month in passive income.

And, also, fun fact of the day, that was one of the first videos I ever posted on YouTube! Wow, did that get some crazy comments! But anyway, I digressed. At that time, the three thousand nine hundred and fifty dollars per month was broken down as follows: three thousand dollars a month of that is from net cash flow from three rental properties that I own outright.

Many people in that original video lost thirty and assumed that I would have inherited some money or something like that. These are properties that I ended up buying extremely, extremely cheap in late 2011, early 2012. I fixed them up, and then I rented them out. One property, for instance, I bought for fifty-nine thousand five hundred dollars. Another property was bought for seventy-two thousand dollars, and another property was bought for one hundred and twenty-five thousand dollars.

Fixed them up, rented them out, and that was an accumulation of basically four years' worth of savings as a real estate agent to be able to do that. Next, seven hundred dollars per month of that is from equity from a fourth property that I was paying down the mortgage on.

That means that every month, after all my expenses and everything is paid, about seven hundred dollars per month of that income goes towards paying down the loan in the form of equity. Next, we had another one hundred and fifty dollars a month coming from Vanguard index funds, and finally, we had a remaining hundred dollars a month coming from an Ally Bank savings account.

That brought us, at the time, to three thousand nine hundred and fifty dollars per month in passive income. But unfortunately, the bad thing with that video is that if you go and look for it, you're not gonna find it because they ended up taking it down because it was wildly inappropriate, and I ended up swearing way too much in that video.

Basically, if I were to make the same video today and post it, it would for sure get demonetized, and I would for sure get in trouble for posting that video today. So for now, I'm gonna be keeping that video private and just reminiscing about the good old days from when I could say whatever I wanted on YouTube without any repercussion whatsoever because no one knew I existed. No one watched my channel, and I was lucky to get like a hundred views before the whole YouTube adpocalypse thing happened.

Before YouTube started censoring content, before YouTube started deleting channels, giving copyright strikes because they didn't like what they had to say. Yeah, those were the good old days! Make sure, by the way, to smash that like button if you remember the good old days of YouTube before the adpocalypse!

So anyway, fast forward into the future there, and I decided to remake that video after I bought another property and made a few other investments. Nine months later, I was able to grow that passive income from three thousand nine hundred and fifty dollars per month to a whopping six thousand four hundred and seventy dollars per month.

That's about twenty-five hundred dollars more every single month, and I was able to scale up within nine months, broken down as follows: four thousand six hundred and fifty dollars of that is my net cash flow coming from five rental properties. That's broken down into three houses, a duplex, and a triplex.

Some of that was with the fifth property that I purchased that bumped up the cash flow; some of the rest was from raising rents. When I had another tenant move out, I would just re-rent it at a higher price. So that's the difference between three thousand and four thousand six hundred and fifty dollars. Next, we have sixteen hundred dollars a month in equity by paying down the mortgages.

Whereas the first year we had one, the second year now we have two. Then we have the same two hundred dollars a month coming from Vanguard index funds, and then at the time we had twenty dollars a month coming from Ally Bank savings account. That was a lot less because I used a lot of that savings to go and buy the properties, so hence why it's now a lot lower.

But now, as you can see, it's been over a year since I posted my last passive income video, and since then it's now a little bit outdated. So, I figured, you know what, we may as well now post a third video, a third update on passive income.

This has been a really fun experience to be able to share and document the process with you guys firsthand, like you were able to see the come-up from two years ago when I posted the first video to over a year ago when you saw the last video to now. I have literally posted every single step along the way on my channel before I did it, when I did it, and then my experience, what I've learned by doing that, so you're able to see this all firsthand.

And now, let's break down a year later exactly where my passive income is today. So now, in just over a year since I posted my last passive income video, I've been able to grow my passive income from six thousand four hundred and seventy dollars per month to now over a staggering seven thousand nine hundred and thirty dollars per month.

And keep in mind that does not include any YouTube income. It does not include anything associated with YouTube. It does not include any sales I do as a real estate agent. This is strictly passive income that I have generated from investments and everything like that. That has nothing on what I do day to day.

And just like my last two videos, here's now exactly how it's broken down: approximately forty-nine hundred dollars per month is the net cash flow between six properties. That's broken down into three houses, two duplexes, and a triplex, and that amount is after I paid property taxes, mortgage insurance, expenses, everything else associated with rental properties.

That is the amount that's left over. And when it comes to paying the mortgages on this video, like I mentioned earlier, three of those properties are owned outright, so they don't have mortgages. The other two duplexes and one of the houses have a mortgage on them.

And that leads me now into the second source of passive income. When I pay down my mortgage every single month, twenty-five hundred dollars of that right now goes straight into equity. This means that I now own twenty-five hundred dollars more real estate every single month as I pay down the loan, and the loan balance gets smaller and smaller.

And also, every single month, that twenty-five hundred dollars that you see goes up by about nine dollars every single month as the loan balance gets smaller and more money goes into equity. That's the way these loans are situated, so every single year I should make an extra one hundred dollars per month just as I start to pay down the loans more and more.

So next, we have the same two hundred dollars a month from Vanguard index funds, and this is something I contributed some more money to this year as well. This is something, too, whereas, you know, fluctuating stock market prices will have a bit of an impact on this. Now, obviously, I set all the dividends to be reinvested, so that just continues growing.

So for the most part, this has stayed pretty much exactly the same. And finally, we have about three hundred and thirty dollars a month that comes from an Ally Bank savings account that is right now paying about two percent in interest. My plan here is really just to save up as much cash as I can over the next, I don't know, six months or a year until I figure out really what the next investment is gonna be and where I'm going to be deploying my money and where I can get the highest return.

So until then, I may as well just take the two percent return from Ally Bank. And by the way, Ally Bank, you better be raising this soon since rates have gone up. You better be a little bit more competitive; otherwise, I might have to move to Robinhood. We'll see, we'll see!

So anyway, as you could see, that now brings our total to seven thousand nine hundred and thirty dollars per month of passive income, and that works out to be two hundred and sixty-four dollars every single day. Now, I think it's time I address all the triggered people in the comments who get very angry and say that rental properties are not one hundred percent passive. Yes, there's absolutely plenty of truth to that.

It took me months to find the property I ended up purchasing this year. It took me a week straight of working every single day to try to get it rented out to the best tenant possible. I've spent months setting up the last deals, renovating them, doing everything to get them up and running.

But so far, my experience has been really, over the last almost seven years, that once something is up and running, it takes me, on average, about one hour per month to manage it. And most of that is simply keeping track of expenses and making sure all the bills are paid. So yes, it's not a hundred percent passive as some people really get angry when I call that passive, but I mean, come on, it's such minimal work.

It's an hour a month. That is pretty much as passive as it gets. But another thing I did this year is test out a property manager on one of the properties, and even though it was a bit turbulent during the first month or so as that was all getting situated, so far, for the last few months, that has been one of the best decisions I have ever made.

So anyway, here's what this video is getting at, and these are some of the main takeaways that I have learned over the last year that's really helped me out. The first one is just staying on course and staying consistent. Do you know how many people told me not to buy real estate this year because it was a bad investment? But instead, to buy Bitcoin? It was a lot.

I also had a lot of people telling me to put all of my money in gold, and sure enough, that is down so far 2.1 percent year-to-date. Instead, I stuck with what I knew best, which is finding undervalued properties with upside potential and waiting until I find the right deal.

When I find the right deal that makes sense, then I buy it, and absolutely, I expect some years I'm gonna be in the red on those investments; in some years, I'm gonna be in the green. Probably, I'm gonna be in more green years than red, but I don't really care about any price fluctuations because I'm not planning on selling.

I'm planning to keep all of my investments really probably for my entire life. I never want to sell anything, so for me, any short-term fluctuations don't make any sort of difference whatsoever. I simply buy on the fundamentals, stick with it, and that is good for me.

And any time that you invest for passive income, it's very important that you have the exact same outlook. Unless the fundamentals of your investment have massively changed since you first invested, just trust the process, hold long-term, and eventually you will end up just fine. Unless you're investing in Bitconnect, in which case you've messed up.

Now, the second thing that I have done that has helped massively is actually hire a property manager. On the property, I ended up using the property management company on, I was able to get an extra three hundred dollars per month in rental income because I never raised the rent from the last tenant.

So by the time the last tenant moved out and the new tenant moved in, rents had gone up, and I made an extra three hundred dollars a month. That more than paid for the management company fee, and it took a huge burden off my shoulders from having to deal with a brand new tenant and all the little intricacies that go with having a brand-new tenant move in.

Honestly, it's been worth every penny so far. Now, the third thing is that I've continued to live frugally and pretty much just save and invest my money as soon as I find a good deal. Even though that forty-nine hundred dollars per month is coming directly from rental income, I still do my best to save as much of that as I possibly can and then hold that money until I'm able to find something that is worth buying.

And for all of you watching, none of the passive income that I make today would have been possible if I didn't live extremely frugally, save all of my money, research good investments, immerse myself in exactly what I was buying, and then wait and try to find the best deal possible and trust the fundamentals. If it wasn't for that, none of this would have happened.

But mostly, it comes down to living frugally and saving as much money as possible because with all the knowledge and everything, if you don't have the money to execute on some of these things, it's not gonna happen. So it really makes sense: live as frugally as you can, save as much money as you can, and then that will help dramatically.

And number four, one last thought I want to make here. I'm totally against trying to time the markets or wait for a recession before you buy something, but just keep this in mind: if prices do end up going down, this is a good thing. I made my best investments in 2011 and 2012 when everything was terrible, when people were telling me not to invest my money because prices were going to get even worse when we were basically in the depths of economic hell.

And things looked terrible. Guess what? That was like the best time to invest. Thank God I didn't listen to any of their garbage advice not to invest! And just to buy gold because if I literally bought gold in 2011 and 2012, it has only gone down since then. Instead, I just bought long-term, I bought when it made sense, I bought the right deal, and I just held.

Then I started saving for the next one. When you're focusing on building up your passive income empire, just really start small, focus on your first dollar, and continue growing that into something huge. Don't get overwhelmed when you see big numbers. What you're seeing in this video is really the culmination of over ten years and basically a decade's worth of saving, work, living frugally, immersing myself in my career to be able to make these numbers happen: an entire decade.

So again, you might see seven thousand nine hundred and thirty dollars a month, and that is impressive. But that is still ten years' worth of work that went in behind the scenes to make that possible. And obviously, none of that can happen overnight, but it can absolutely happen over a decade of diligent saving, investing, living frugally, investing in the fundamentals, and holding long-term.

As many of you guys know, I'm the type that really likes to lead by example. If I see someone else doing something and it looks like it's working, I go and try it for myself. And if it works for me, then I go and make YouTube videos on it so you guys can basically replicate this process, and hopefully, it'll work for you guys as well.

So definitely now, go and do something similar! And again, let me break it down really quick. This entire video summed up right now: this is it! Live frugally, save as much money as you can, reinvest in assets that pay you monthly.

This might include dividend stocks, index funds, real estate, any sort of business, anything like this that can pay you every single month. These are great investments to make. And then slowly build this up, and if you want it to compound even faster, then take all the money that you're making from that monthly, compound it, save it up, and then reinvest back into buying even more so it grows even faster.

And that's pretty much what I ended up doing. So, as always, you guys, thank you so much for watching! I really appreciate it. If you guys enjoyed videos like this, make sure to smash that like button. Also, make sure to smash that subscribe button if you haven't already. I post three videos a week: Monday, Wednesday, Friday.

If you want to be a part of that, make sure to subscribe. Also, feel free to add me on Instagram. I post pretty much daily, so if you want to be a part of it there, feel free to add me there. Thank you again for watching, and until next time!