The Truth About Earning $1K in Passive Income Per Month: How Much Do You Need to Start from Scratch?

Many people say passive income is easy money, but it actually requires time and capital to build the system in the early stages. However, once it gets going, it can indeed generate a continuous stream of income. The question is - how can one achieve a passive income of $1,000 a month?

Financial lawyer and investment advisor Erika Kullberg summarized a few reliable ways:

The most stable: dividends + real estate

Buying dividend stocks or real estate investment trusts (REITs) is the most straightforward approach. These assets provide you with regular dividends or rental income without the need for constant worry. Beginners can open accounts with major brokers like Vanguard or Fidelity, choose companies or funds with stable past returns, and then invest regularly with compound interest.

If you want to earn real estate income but don’t have that much money, platforms like Fundrise and Arrived allow you to invest small amounts in real estate. The downside is that the money has to be locked up for a long time to see real returns. If you need money urgently, you can also directly buy REIT stocks (like Iron Mountain), which is more flexible.

Zero-Cost Method: Selling Digital Products

Don't have that much startup capital? Try creating e-books, online courses, or printable templates. Once you create them, you can sell them repeatedly with almost no effort.

Platforms like Amazon Kindle Direct, Udemy, and Etsy can all be listed on. It does require effort to promote initially, but once it gains traction, it may generate ongoing income.

P2P Lending + Crowdfunding

The annualized return rate of P2P lending platforms is usually between 5% and 10%, with some even achieving double digits. Let's do the math—investing 140,000 yuan at an annualized rate of 9% would yield a monthly income of over 1,000 yuan. It sounds like a significant amount of principal is needed, but you can start with a small amount, earning and investing continuously to benefit from compounding.

Other Methods

• Affiliate Marketing (Earn commissions by promoting products)
• Create a personal blog or YouTube channel
• Parking space/storage space
• Create paid email newsletters

These all require initial time investment, but many can be started with almost zero cost. You can even start YouTube and online courses for free, at most buying some recording equipment.

Don't forget to pay taxes

Passive income is also subject to taxation, and how it is paid depends on the type and amount of income. Some real estate investments may allow for tax deductions (such as depreciation), so it is advisable to consult a financial advisor.