How to Make Passive Income


Passive income means making money without working. Despite what the mainstream finance media might lead you to believe, true passive income does NOT come from investing in stocks.

Simply put, stocks are too risky. If you invest, and prices go down, you’ll lose your money, and once this happens, you’re screwed. You can’t depend on consistent income from stocks. The goal is to make money, not lose it. Therefore, the only way to truly make passive income is with risk-free products, like a high interest savings/money market account.

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Option #1: High-Yield Bank Account

Currently CIT Bank offers 1.85% APY on all balances with no minimum requirements, making it the best savings account with no strings attached in the country.

This is free money, folks. CIT is federally insured to the maximum of $250,000 and is just like every other online bank, except they pay you over 12x the national average to hold your money. There is simply no reason to be satisfied with earning 0.01% from a mainstream bank. CIT doesn’t have any in-person branches, and this allows them to give more back to their clients in the form of interest payments.

If you’re reading this, chances are you currently are being ripped off by your bank and aren’t earning anywhere close to 1.85%.

According to a recent study by research firm HFR, US hedge funds, on average, returned just 0.81% in the first half of 2018. This means by earning a guaranteed 1.85% rate, you are guaranteed to outperform some of the biggest hedge funds out there. Best of all, you can’t lose your money in a money market savings account.

Option #2: Invest in Real Estate

Besides earning guaranteed interest from the bank, the only other realistic way to make passive income is with real estate. And, as a warning, income in the real estate market is not guaranteed, it’s just very plausible.

In the digital era, we thankfully can invest in real estate deals with the click of a button. Fundrise makes this possible, and has been in business since 2012 with over 500,000 members and $2 billion invested in real estate across the country.

If you’re looking to grow your assets over time Fundrise offers a way to do it.

Final Thoughts

Remember, the goal of passive income is to make money, not lose it. The reason why I like collecting 1.85% interest (that compounds daily) is because there is ZERO chance of losing my money.

1.85% is better than 0%. And it’s a heck of a lot better than -20% to -50%, if the stock market crashes like it has in the past two decades. Why risk 50% of your money in the stock market to make a historical average of just 6% a year?

At the end of the day, CIT Bank is the best option to make consistent passive income – period. Even if you only have a few thousand dollars, earning $10 a month could pay for a Spotify or Netflix subscription.

Passive Income Method Best Choice
Collect high-yield interest (up to 2.25% APY) from a bank
Invest in online real estate deals with proven historical returns

What is Options Bro? is an online financial information site dedicated to providing simple tutorials, reviews, and comparisons on all things finance.

Collectively, we’ve spent thousands of hours examining the most popular financial products and tools. Bottom line, we simplify and explain the myriad of consumer financial options available today, so you can make decisions with ease.

Updated: December 1, 2018

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