How To QUIT Your Job With Passive Income (Step By Step)

What's up, Grambids? Guys, here. So, some of you know I've been obsessed with the concept of passive income ever since I learned about the financial independence retire early community in my early 20s. Over those last 12 years, I have done everything possible to create a lifestyle where passive income now covers my entire cost of living plus some, regardless of how much or how little I decide to work.

So today, I thought it would be nice to cut through the noise, share everything that I have learned along the way, and give you a practical, realistic approach to making a hundred dollars a day or eventually quitting your job without having to resort to referring your friends and family to take online surveys for five dollars an hour.

I'll just lay everything out for you to use that I have learned the hard way, and hopefully it'll either save you a lot of time or make you a lot of passive income by the time you're older. All I ask in return is that if you find this video helpful, just hit the like button. That's it! I promise this will help you make more money and hitting the like button takes less than 1/16 of a second, and it helps out the YouTube algorithm. So thank you guys so much for doing that.

Also, a big thank you to public.com for sponsoring this video, but more on that later. First, it's important to understand that when it comes to passive income, there are two very different types that you could generate for yourself. The first is by investing your money, and the second is by investing your time.

I'll break down and give you both options to choose from so that way no one's left out. But since we're going to be going over the most realistic approaches, we should start with investing your money. The entire goal is to get in the habit of having your money work for you, so that your money makes you more money, and that makes you more money, so that you earn more money. Think of it like every dollar you invest is its own little worker whose only job is to go and find pennies to bring back to deposit into your bank account.

Now, initially it might not seem like a lot to invest dollars to bring back pennies, but that starts adding up once you've got hundreds or even thousands of workers out there, all bringing you back money every single day. On top of that, once a penny joins your team, it'll work non-stop to bring back even more pennies, even if you don't pay it any more attention. That's the entire basis of investing your money for passive income.

But there is one catch: you will never get something for nothing, and if you want to eventually scale up to 100 a day or eventually quit your job, it's either gonna take you a lot of work or a lot of patience. Pick one! It's all about utilizing your resources today to work smarter and more efficiently, so that way over time you could begin earning more without having to turn your car into a mobile advertisement.

So with that out of the way, here's how you can make that happen. One, the easiest way to make passive income and eventually a hundred dollars a day is my personal favorite, and that would be investing in an index fund. Bet you didn't see that one coming! Anyway, for those unaware, this is an investment that covers a wide variety of stocks and markets that you could buy into for one very low price.

For example, something like VTSAX is going to cost you about a hundred dollars a share, and with that one investment, you're going to be owning a small piece of the entire U.S. equities market. The other advantage is that there's an index fund for pretty much everything that you could want to invest in, like international stocks, dividend stocks, tax stocks, small cap stocks, clean energy stocks... the list goes on!

From there, you can make passive income in two different ways. One is by the stock price going up in value over time. In terms of how much this amounts to, something like VTSAX has historically gone up about eight percent a year, adjusted for inflation with dividends reinvested. Now, obviously some years are going to be significantly higher than this and other years will be significantly lower, or even negative. But long term, these funds generally trend upwards.

The second way is the real passive income is that you also have a dividend. This just means, on a regular basis, you get back some extra money just as a perk for buying and holding on. In most cases, the dividend yield is anywhere from 1.3 to 2 percent a year, give or take depending on what you're invested in; which up front I get it, it's not a lot. But when you also consider that the stock price is going up by an average of six percent a year, that'll bring your overall return on a thousand dollar investment to about 60 to 80 dollars a year in passive income for really doing absolutely nothing.

Now when it comes to this, if all you're after is trying to optimize the dividends, there are index funds that you could buy into that pay you a lot more. Like with FIX, they'll give you a 4.9 yield on your money, so for every thousand dollars you invest, that's 49 in passive income for no ongoing work on your end. For myself, I've made index fund investing my main focus throughout these last two years because it's been such an easy set-it-and-forget-it approach that I could do with no work whatsoever, which with my schedule right now I really appreciate.

Of course, when it comes to using the strategy to make 100 a day, there's almost one way that all of us are going to get there, and that is through patience and consistency. If we work backward, at a total of an eight percent return, earning a hundred dollars a day is going to require an investment of 460,000 dollars, which I get is a lot of money.

However, that doesn't mean that you can't build up to it over time. If you're able to invest 416 dollars a month into buying an index fund like this on a regular basis, in just over 25 years, that'll grow to the point of earning 100 a day even if you did nothing else in this entire video. Now sure, I will admit it's not as exciting as opening up a Shopify store and then selling wolf mugs, but it is a tried and true method for anyone at any skill level with any amount of work that you want to spend on this, even if you have no time whatsoever.

Second, along the same lines as index funds, you can also take matters into your own hands with dividend stocks. Here's how this works: anytime you go and buy a stock, what you're really doing is buying a small piece of ownership within the company.

Now that doesn't mean that you could walk into Bank of America and claim that you own the bank because you bought one share, but owning a stock in a company does entitle you to some of their profits, and many companies pay you a small portion of what they make in the form of a dividend. When it comes to Bank of America, for example, they'll pay you an almost two percent dividend every single year, which means for every one hundred dollars you invest, they will pay you back two dollars in passive income.

Now obviously, for our example of making a hundred dollars a day or eventually being able to quit your job, you would need to invest one million eight hundred and forty thousand dollars in Bank of America to be able to make 100 a day in dividends, which realistically is probably not a good idea. But if dividends are all you're after, then other companies do pay a much higher yield, which means you can make a hundred dollars a day with a lot less invested.

For example, Exxon pays you 4.6 percent; AT&T pays you almost nine percent; 3M pays you four and a half percent; and so on. In this case, if you were to just pick a list of high-paying dividend stocks, then you could potentially earn a hundred dollars a day with as little as five hundred thousand dollars, not including the value of the stock also potentially increasing at the exact same time.

Now, I get it, it's funny to say with as little as five hundred thousand dollars as though you could just magically snap your fingers and have it appear in 24 hours. I have to say this is also where the patience and consistency come in. For instance, with our AT&T example, if you were to start with nothing and just invest 20 a day into the stock while reinvesting all the dividends, you could reach a hundred dollars a day just from dividends in less than 20 years, even though the share price hasn't moved for 30 years. But, we'll save that for another video.

Anyway, even though dividends are a fantastic source of passive income, and so far I managed to grow my largest stock account to 65,000 dollars a year in dividends alone, the downside is that not all dividends are worth buying, even if they do pay you a lot of money. Like consider IBM. Even though they're paying you a 5.4 dividend, over the last five years, their stock price went down 29 percent, so you would now have less money than you started out with.

Compare that with Apple, which only pays a half a percent dividend, but in those same five years, it's up 365 percent; or Walmart, which is up 92 percent with a 1.7 dividend. Because of that, it's important to pick your dividend stocks wisely and invest in the companies based on their long-term fundamentals and not how much they pay every single quarter.

After that, we have a third option that's somewhat similar but also kind of different, and that's earning passive income through what's called a REIT. This stands for a real estate investment trust, which is a really fancy way of saying you're buying stock in a company whose only purpose is to go out and buy real estate. In exchange for giving them your money, they will pay you back a portion of their rental income as a dividend.

These real estate companies can specialize in anything from medical buildings, shopping centers, senior care facilities, or residential apartment buildings; and that way you could still say that you own a small piece of a shopping center without technically owning the shopping center. This is a really easy option for pretty much everybody who wants exposure to real estate but who doesn't want the hassle of trying to find a deal, do inspections, rent it out, do renovations, and answer calls at 2 AM when there's a broken toilet.

Even for myself, in addition to owning physical real estate, I also choose to diversify into REITs like Simon Property Group and Preferred Apartment Communities, and those have been way easier to own than trying to find my own real estate deal this year. Now the downside to this, however, is that you're not able to leverage your money like you can with buying real estate, and you don't get all the amazing tax benefits and deductions like you do when you physically own it.

Although the upside here is that almost anyone could buy into it immediately with almost any amount of money, and if you want to earn a hundred dollars a day, this is probably something that I would recommend you incorporate into your portfolio for the long term.

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Now with that said, let's get back to the video. Now that we've talked about owning real estate with a REIT, we cannot talk about passive income without mentioning one of the most effective ways that you can make a hundred dollars a day, especially if you do not mind working the equivalent of a part-time job, and that would be owning physical real estate.

In fact, this is what first got me into investing; it's what I did full-time for the first 10 years of my career, and I wouldn't be here without this. Because I gotta say, there is no better way to quickly and effectively build up your net worth, especially if you're willing to put in the time and have the patience.

Of course, if it sounds too good to be true, that's because the catch here is that one, you have to have a credit score above 700; two, you have to have a very stable source of income; and three, you have to have enough money saved up for a down payment. But if you could check all three of those off the list, here's how you could do it.

Let's say that you find a house worth three hundred thousand dollars, and it needs a little bit of work. But in its current condition, it can rent out for twenty-five hundred dollars a month. You could go and buy that home for a 15% down payment, which is 45,000 dollars, and your mortgage is going to be 1,160 dollars a month fixed for 30 years at a 3.6 percent interest rate.

Of course, your expenses are not going to end there; you're also going to have property taxes, insurance, maintenance, repairs, vacancy, and let's just say that adds up to another six hundred dollars a month, bringing your total overhead to own and keep this home every single month at seventeen hundred and sixty dollars.

But once you buy that home, instead of going and immediately renting it out for twenty-five hundred dollars, maybe you spend another twenty thousand dollars fixing it up, redoing the landscaping, repainting, fixing up the kitchen, and making the bedrooms look really nice. Now, after everything is said and done, that home could be worth three hundred and sixty thousand dollars and rent out for twenty-eight hundred and fifty dollars a month.

In this case, you'll have one thousand ninety dollars left over in profit every single month after your expenses from a sixty-five thousand dollar down payment, then renovation. If you could repeat this process once every other year, you could make a hundred dollars a day in passive income in less than seven years, not even counting the equity you build from paying down the mortgages at the exact same time.

Now, of course, I am making it seem a lot easier than it actually is because housing is very expensive, it’s extremely competitive, and finding a good deal can often take you months if you're lucky. There's also a very steep learning curve when it comes to remodeling a house, and it really helps to have someone else who's done it before to guide you along the way.

But over time, as you get used to it, the upsides are well worth it. You could also take the strategy to a much smaller degree by renting out an unused bedroom in your house. If you don't mind living with someone else, it could be a great way to earn some extra money. Even earning an extra 500 dollars a month could be plenty of money to reinvest back into more index funds, like I mentioned earlier, and hey, in 20 years, that gets you a hundred dollars a day, even if you decide to never have another roommate ever again in your entire life.

So, my thinking when it comes to this is that if you have the time, absolutely go and do it. But if your time is more valuable spent doing pretty much anything else, I would probably recommend to at least hold off a bit longer and look for something more passive instead.

And finally, we've got to talk about spending your time to make passive income, because from my experience, this could often make you way more per day than your investments. But you need to spend your time very wisely. For myself, I found that these are the best ways to realistically make money.

To start it off, we should talk about signup bonuses. Now, sure, it's not exactly passive because it does take some time, but it doesn't require a lot of work on your end, and it's a great way to make fast money with very little effort. Plus, I used to do this all the time when I had nothing better to do, and I still do it every now and then when I see a good deal come up.

But here's how it works: both credit cards and banks will give you a bonus just for opening up an account with them and meeting some minimum requirements. Usually, that bonus is anywhere from five to five hundred dollars, and typically it takes anywhere from five to thirty minutes to complete. Sometimes it'll take you a little bit longer to find a good offer because they change so frequently, but I'll give you a few ideas just to get started, and then from there you can keep an eye out for anything else that comes up.

We'll start with credit cards, and because these ones are a dime a dozen, there's always going to be an offer out there that you could take advantage of. So I recommend going to a website like The Points Guy blog, who lists eight current offers that you could redeem right now, giving you well over fifteen hundred dollars in value for maybe ten minutes of work each.

Banks also offer this too. Most people don't realize that almost all of them have a sign-up bonus just for opening up an account and meeting a minimum requirement because they want you as a customer, so you may as well use that to your advantage. For example, Chase Bank offers you 225 dollars if you want to open an account.

Now, of course, you do need to keep a minimum deposit of 1500 dollars or have a monthly direct deposit of 500 dollars to avoid the monthly maintenance fee. But assuming you do that, these bonuses could work out pretty well in your favor. Now do be mindful, though, that sometimes closing out an account could be time-consuming, and I only recommend doing this if you actually intend to bank with them. But if you don't mind having an account with them anyway, then this could be a great way to earn some extra money for very little work.

Next, if you have the spare time and you don't mind making shocked thumbnails online, you could potentially make a YouTube channel and talk about whatever interests you. I know this has become the most cliché, easier-said-than-done tactic that everyone talks about these days, but I still maintain that this could be a great way to make passive income if you have a passion for talking to a camera alone in a room at 9 PM on a Friday night. Doesn’t that sound like a great time?

If that sounds fun and you could treat it like a business, then making a YouTube channel could be better than your wildest imagination, and the possibilities for passive income are unlimited. For example, when I first started, I filmed everything from my iPhone and edited for free on iMovie with a total out-of-pocket cost of zero dollars. I just made videos talking about my experience investing in real estate, working as a real estate agent. I had a ton of fun doing that, and after a few months, I began making a few dollars a day in passive income.

I also began incorporating affiliate links in the description or reviewing products and services that I used on a daily basis and creating a catalog of evergreen videos that still make money to this day even though they're four years old. Now I'm not going to lie to you and say that you could make 100 dollars a day in truly passive income because the YouTube algorithm rewards a very consistent posting schedule, and without putting in a lot of work upfront with absolutely no guarantee of getting anything back, you're probably not going to make a lot of money.

But there is an element to this where if you treat it like a full-time job and you constantly feed the YouTube algorithm by asking people to like and subscribe, then maybe it could work out in your favor.

Finally, the last way to make passive income is by leveraging a skill or a service that you could sell on autopilot. For example, two years ago I had someone on my second channel, The Graham Stefan Show, who was making up to 50,000 dollars a month writing eBooks on Amazon in his spare time. His total investment was a few hundred dollars; he would market the book himself and eventually he quit his job to do that full time.

I also have another friend who taught himself how to build websites. He then outsourced the work and would rank on Google for very niche keywords that would make anywhere from a few hundred to a few thousand dollars a month, like ranking the best trampolines and other random ideas. It wasn't entirely passive, but for a few hours of work every single month, it made quite a big return.

Or as a last example, I knew a real estate investor who would rent out unused garage spaces from homeowners and then sublease that space at an even higher price to other people who needed storage. I know it's all kind of random stuff, but if you let your imagination run wild, passive income is out there if you're willing to go and get it.

Now just remember, realistically earning 100 a day like this is not going to happen overnight, and most likely, it's going to be something that takes you years to build up to. But eventually, long term it is worth it. It's all about starting small, figuring out what works, getting some success on a small scale, even if it's just earning 20 dollars a year in passive income.

But once you start, I absolutely promise it becomes that much easier to continue and eventually make a lot more money. So, with that said you guys, thank you so much for watching! Also, make sure to subscribe, feel free to add me on Instagram or on my second channel, The Graham Stefan Show. I post there every single day I'm not posting here, so if you want to see a brand new video from me every single day, make sure to add yourself to that.

And lastly, don't forget to get your free stock down below in the description when you sign up for public using the code "gram." You may as well do that; it's pretty much like free money. Thank you so much for watching, and until next time!