Everyone wants to generate passive income. I don’t know how this myth started, but I know it’s a pretty widespread delusion.
Let me be clear: truly passive income doesn’t exist.
I discuss this in the video below.
As I say in the video above, you don’t want passive income because passive income doesn’t exist. What you want is full time money for part time work, and you want it several times over.
Being in four places at once beats the hell out of the fictional passive income.
The closest thing I’ve found to passive income makes money in several places at once.
What is this magical method? What is the easiest way to make your money make you money in several places at once?
The Humble ATM
Not as “sexy” a passive income stream as you’d like? Fact is usually less interesting than fiction, stranger or not.
ATMs are a wonderful way to do business. People need money, you help them get it, and you get a fee for your trouble.
If you can afford to keep it stocked, you can turn a good profit running an ATM or three. As a general rule, you need to be able to move $520,000 through an ATM every year.
This sounds like a lot more money than it is.
Really, that boils down to $5,000 on Monday and $5,000 on Friday. Not all ATMs will do this kind of business, but many will.
Having to have cash up front is the largest reason why I recommend online business over offline. If you have the cash, though, it’s an excellent way to grow your income.
How does stocking an ATM work?
Your business makes money
You put that money in your ATM’s cassette (the part that holds money)
People withdraw money from their account through your ATM
You are paid a transaction fee, which is different depending on your service provider
Your service provider reimburses you for the money that was passed through your ATM by EFT, because people are withdrawing money out of their own bank accounts and not yours.
Note that the money you make on your ATM isn’t considered a profit margin, because you have no cost in this situation.
YOU GET YOUR MONEY BACK.
This is exactly the same as when you put cash money in your bank account and your bank gives it out to someone else in a loan. The difference is, your money is making you far more in an ATM than it will ever make sitting in a savings account.
How much can you expect to make?
We’ll rough out these figures, for simplicity’s sake.
Assuming you keep an ATM stocked with $5,000 and make $2.25 per transaction, your profit in fees will be between $56.25 if every transaction is $200 and $562.50 if every transaction is $20.
It would be extremely unusual for all your transactions to be for the same amount, but these extremes show you the range. Swap $2.25 for your transaction fee and you can determine your own maximum profit with this formula:
(Total ATM Cassette Amount) ÷ (lowest transaction amount) × (Transaction Fee) = (Your Profit)
The lower the average transaction amount, the higher your profits will be. That means that the most profitable places to place an ATM are the areas where the average customer needs or has less money.
How does this stack up as “passive income”?
Your rate of return will be somewhere between 1% and 11%, and at the time of this writing the average return on a savings account is between 0.01% and 0.11%.
This means that an ATM is like a bank account with a rate one hundred times higher than your run of the mill savings account. You can find higher rates out there, but not without much greater risk.
“But I don’t have $520,000, Lloyd!”
Keep in mind that the amount of money that passes through your machine will be sent to your bank account in an EFT. You can recycle the same money several times over, only adding to it when you need float money to hold you over while the draft clears.
I know of no other investment that gives you a rate of return that consistently beats inflation, has inherently high demand, and possesses so little inherent risk. It’s a fantastic opportunity.
Using the figures above, you can easily add $1,125 to your weekly income ($58,500 per ATM per year) by using an ATM for your so-called passive income.
You still have to do the work in refilling it, so it still isn’t “passive”…but it’s pretty damned close.