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Passive Income: 10 Ideas for Building Wealth While Sitting on the Beach

August 27, 2019

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Are you interested in creating passive income while sitting on the beach in sunny Santa Barbara? There are several ways to make your money work for you. In order to get there, you have to focus on one of four options: time, money, work, or all three. 

Passive income includes regular earnings from a source other than an employer or contractor. The IRS says passive income can come from two sources: rental property or a business that does not require you to actively participate in it, such as stock dividends.

“Many people think that passive income is about getting something for nothing,” says financial coach and retired hedge fund manager Todd Tresidder. “It has a ‘get-rich-quick’ appeal … but in the end, it still involves work. You just give the work upfront.”

The good news is if you’re willing to commit your resources to any of the 10 passive income ideas below, you could be earning money effortlessly for years to come. One caveat: ask your attorney or financial advisor before jumping into any of these ideas.

1) Rental income
As I’ve reported in a previous blog, investing in real estate is a great way to diversify your portfolio and make income in your sleep. You can rest easy by investing in any of the upscale communities in Santa Barbara. With our perfect year-round Mediterranean weather and beautiful white sandy beaches, there is always a market for rentals here. Plus, being a college town doesn’t hurt your chances of success.

Still, while interest rates today are extremely low, the days of quick, easy financing are over, and the tightened credit market can make it tough to secure loans for investment properties. That means you need to have a little creativity and preparation—or pay in cash—to become a successful real estate investor.

2) Rent Your Space
If you’re looking for a more hands-on approach to making money in real estate, consider renting out your vacation home, house, apartment, or even a single room. Here are some options to consider:

  • Airbnb allows people to travel all around the world and to stay in alternative accommodations rather than booking traditional hotels. They charge only 3% on every booking for their services, and you receive payment 24 hours after your guests check-in.
  • VRBO has more than 2 million rental properties, most of which are entire home rentals. According to their user-friendly website, there are three simple steps to listing: you set up your property, get the perfect match, and start earning. Rent year-round for one annual fee.

3) Invest in High-Yield Savings
Savings accounts might sound like the most boring investment ever invented, but they are the safest. At 0.15 percent interest or lower, you’d need to exceed the FDIC-insured $250,000 account limit to see any real gain. Today’s online banks provide savings account rates as good as a CD without locking in your money for several years. For example, right now Discover is offering 2.00% interest rate on their Online Savings account. That is close to 25 times what you’d get at a typical brick and mortar bank.

Other online banks that offer high-yield savings accounts include:

  • CIT Bank, which boasts some of the highest CD rates around.
  • Barclays, which offers only savings and CDs in the U.S.
  • BBVA, whose Money Market and short-term CDS are competitive.
  • Synchrony, which also has limited account options.
  • Ally, where you can also get a checking account.

4)  Invest in High Dividend Stocks
By building a portfolio of high dividend stocks, you can make more money than you would through regular bank investments. Just as important, since high dividend stocks are indeed stocks, there is always the potential for capital appreciation. That means your passive income will come from two sources: dividends and capital gains.

5) Invest With a Robo-advisor
Allowing an algorithm to manage your investments is about as passive as you can get. Robo-advisors like Betterment allow you to set your limit, then sit back and let the income flow. And the fees are much lower than what you’d pay a human account manager.

Here is a rundown of a few of the leading robo-advisor platforms:

  • Betterment is great at reducing any taxes you have to pay on your investments, and they work with you to give you the best financial advice through their algorithms. Unlike other robo-advisors, with Betterment, you can actually talk to a human being if you want to. Betterment charges the same fees as Wealthfront but does not waive the fee on the first $10,000 you invest.
  • Blooom helps employer-sponsored accounts (401k, 403b, 401a, and 457 accounts). You’ll pay only $10 per month, no matter how large your 401k grows.
  • M1 Finance offers fee-free accounts. You won’t be charged trading fees and can borrow against your account with low-interest rates.

6) Invest in CDs
While being simple and straightforward, investing in CDs is far from the most exciting investment strategy out there. But if your goal is to make money while you sleep, without any risk, this could be your best choice. CDs are like savings accounts with a catch. You can’t touch your funds before they reach maturity.

See current CD rates (Updated Daily).

7) Invest in Index Funds 
Index funds give you a passive alternative to investing in the stock market. If you invest money in an index fund based on the S&P 500 Index, you will be invested in the general market. This means you won’t have to worry about details like choosing specific investments, rebalancing your portfolio, or knowing when to sell or buy individual companies.

8) Corporate Bonds
Corporate bonds are exactly what they sound like — bonds issued by corporations. Companies then use those investments to fund their business. You can buy corporate bonds from major corporations or buy into them individually.

9-10. Start Your Own Blog or Buy One
Today’s blogs can be an unbelievable source of passive income. But there’s more to making bank with a blog than just posting good content. Start by consistently posting blogs that create a lot of value for a lot of people. In time, you can generate an extraordinary amount of money.

An alternative is to buy a blog. Look for one that already has a reasonable amount of web traffic and has demonstrated cash flow. Most blogs employ Google AdSense, which provides a monthly revenue stream based on ads that Google places on the site. You can also look into affiliate programs to generate additional revenue. 

The bottom line is, there are many ways to create passive income today. If you’re considering buying property in Montecito, Hope Ranch or another of the Santa Barbara area’s upscale communities, give me a call at (805) 886-9378 or email me at I’m also here for sellers. Either way, please allow me to take care of everything for you, thereby making your real estate transaction truly passive.

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“It was an emotional experience selling our mother’s home in Montecito that we all loved so much but Cristal made the process easier on our whole family by guiding us through the transaction every step of the way. She knows the market so well and everything she recommended was on point including the asking price, painting, and staging the home, which looked beautiful and helped the buyer envision her new home. We sold it the first day it hit the market with an offer above asking! Cristal did an incredible job communicating with us and the buyer to ensure that the transaction would run smoothly. We highly recommend using Cristal, she was a pleasure to work with! ”

- J & A

“Cristal is a pleasure to work with! Her knowledge of the local real estate market coupled with her amazing listening skills resulted in her showing us an array of homes that were all excellent choices. Her low-pressure patient attitude made us feel extremely comfortable with the whole process. I cannot recommend her highly enough.”

- M.F.

“Cristal Clarke is #1 in her field - and you don't become #1 by luck. Cristal works harder, and longer, and with more charm and patience than any real estate agent I have ever worked with in the past; her calendar has no weekend, her days have no clocks, her only concern is selling your property as soon as possible and for the best price on the market. Am I a fan? You bet!”

- P.B.

“We have used Cristal now several times and cannot express how grateful we are for her expertise, dedication, and unwavering support throughout the entire home-buying process. Cristal is knowledgeable, patient and attentive. Her attention to detail is remarkable, and she consistently went above and beyond to provide us with all the information and resources we needed to make informed decisions. Cristal is a skillful negotiator and advocate. She can navigate complex negotiations with professionalism and grace and felt like a true partner to us in the home-buying process. Cristal has a genuine passion for real estate and a deep commitment to her clients' satisfaction. I cannot speak highly enough of Cristal and her exceptional service. She is a true expert in her field and her dedication to excellence, combined with unwavering support is the reason we choose to work with her for all our real estate buying needs.”

- T.C.

“Cristal is a top-notch realtor who sold my home before it ever went on the market. I had two competing offers that enabled me to get top dollar for my home. Not only is Cristal superb but her team is extraordinary. I cannot say enough about Cristal and her team. They are simply phenomenal, the consummate professionals, who took care of every possible detail, making the sale and transition period, smooth from our end. They are also lovely, caring people, who knew all the right professionals, to get the job done. Thank you, everyone!”

- D.R.

“I could list lots of cool adjectives to describe Cristal. All good by the way. But, that is not why I or anyone should hire Cristal. My reason for hiring her, which proved to be correct, is very simple. She got the job done. And, she does it time and time again and with zero issues. And, that is why she is one of the top agents in the country. End of subject. ”

- M.A.

“Working with Cristal was a complete pleasure. Cristal was extremely patient with us as we evaluated nearly 2 dozen homes over a span of 2 years. Her knowledge of the market is unmatched. Cristal provided us with exceptional counsel as we evaluated opportunities and negotiated pricing. The closing process was handled thoroughly and efficiently. We could not be happier with our purchase and even more happy to now call Cristal our friend.”

- D.K.

“Cristal Clarke has conducted numerous real estate transactions for me beginning 13 years ago with the purchase of a Lemon Ranch. She has handled both large and small purchases and sales with equal dedication. As a negotiator, you can’t find anyone better. Her transactions are always conducted in the most appropriate and professional manner. Cristal has considerable knowledge of the Santa Barbara market.”

- S.N. Decker Ph.D.

“Living in Europe, we were to say the least, unaccustomed to the nuances of Real Estate acquisition in California and Cristal steered us through the process with absolute professionalism and personal attention to detail at every turn. Her in-depth knowledge of the market place combined with enthusiasm and drive was the only reason we secured the property of our dreams and will be forever grateful. If you are looking for personal discrete and private representation of the highest quality we suggest you look no further than Cristal Clarke.”

- Johan and Paula van den Berg

“Cristal is very straightforward, cheerful, helpful, professional and trustworthy….we felt very lucky to work with her.”

- John and Lacey Williams

“After considering our many choices, we are grateful it was Cristal Clarke of Sotheby’s International who represented the sale of our Montecito cottage. We are familiar with Cristal’s reputation of hard work and dedication to clients, but it was her attention to detail that made our experience so positive. She offered suggestions for staging the property, worked in harmony with potential buyers and was even able to secure back up offers. The sale of our cottage was completed much sooner than we expected, due in great part to Cristal’s professional skills and support. We highly recommend Cristal as a first choice for anyone needing representation with real estate.”

- Michael & Nancy Lee

“Our experience in working with Cristal Clarke resulted in the successful and discrete acquisition of a property which was not yet on the open market. Her knowledge of the Montecito/Santa Barbara area and vast expertise blended with her passion for real estate and architecture, provided us with the very highest level of professionalism and personalized services. Cristal exhibited a rare combination of excellent communications, attention to detail, creativity and patience.”

- Richard and Catherine Frinier

“Cristal really breaks the mold. She knows every nook and cranny of this real estate market, understands value, and follows up on everything, all the time. She was incredibly patient with our two year quest to find the perfect house. Every house hunting trip from across the country was well planned, and our time was never wasted. On top of her professionalism and expertise, she is delightful to spend time with. We are thrilled with the home we purchased, and grateful to Cristal for so wisely advising us through this process, right through to the close and beyond.”

- Laurie Siegel

“We met Cristal first in the course of renting a winter home (for three years), then buying a house using her as our agent. She was amazingly good at listening to our wants and showing us homes that fit our needs. Her mastery of the paperwork was perfect. Most importantly, there was never a situation where we doubted her straightforwardness or integrity. If we do another real estate transaction in Montecito (which I doubt, we’re happy with what we purchased), without question we’d use Cristal again.”

- Ken Saffir

“Susan and I just want to thank you for your efforts in the sale of our home. You are really quite amazing. Your competence, persistence, optimism and humor made the entire process effortless. Every problem that arose, you somehow fixed; any obstacle, you overcame. We have bought and sold many homes. It has never been such a painless and enjoyable process!”

- Michael & Susan Marquart

“A little something about “our” realtor, Cristal Clarke. My wife and I came to Santa Barbara about fifteen years ago looking for a seasonal home from which to enjoy the weather and amenities of the central coast. Being in the real estate business myself I was familiar with agents and brokers so entered the market with open eyes. We “flipped” a few houses in the early years, dealing with various agents and finally ended up in Montecito. That’s when good fortune put us together with Cristal. To say we were impressed is to put it mildly. Cristal really knows the market. She is familiar with the area, its history and trends. When we have questions about a particular property she either has the answers immediately or gets back to us by phone or email. There is no waiting or wondering with Cristal. She is an agent who is “on top of it.” Her recommendations as to price points, contractors, inspectors and title agents have proven to be exceptional, showing great insight and the highest professional standards. We consider ourselves exceedingly fortunate to say that Cristal Clarke is our realtor and would recommend her services to any serious buyer or seller.”

- Rob & Judi Kelch