A passive income and pay per hour augmenting strategy for my business
My passive income streams: a 5% interest savings account, Medium, options trading and REITs. If I can get the right option trading privileges on a trading platform and they offer 5% for liquid cash in the account too I might consolidate and keep the money there but for now I have put my money in CitBank (Not Citibank) which offers 5.05% per year. So, with a $30,000 account I can bring in $1500 a year interest and what should I do with interest income that comes in? I can keep the interest in the account and let the interest compound and accumulate. If I find nothing better to do with it, that would be money that could pay for six months rent depending on whether lived in Latin America or India. It could also pay for five or more round trip flights to Latin America or six months of rent some places in India.Only having to come up with money for a quarter to half my rent in the year is really cool. Now I just found another high yield online bank that seems to offer 5.3% with a minimum balance of only $2500 which would free up half the assets that are locked up with a minimum of $5000 and I could put that money in my brokerage account *and* make a extra $60 a year in this scenario. That is an extra $5 a month. At this point there is no telling where my options trading journey will go but I am learning it with the thoroughness of learning a language and I have heard that it is not out of the question to see a 2.5% return a week if you use your mind and don’t get pulled by emotions and make smart trades that you can back up with all kinds of reasons. If I could accomplish that, and it sounds like the perfect bar to set, a $10,000 investment account on January 1st could be worth almost $20,000 at the end of June and $36,111.12 by New Years Eve.
At the same time I can be writing on Medium which should, in theory, earn me more money the more articles I write over time if they are valuable and audiences continue to read them. I don’t have a profit goal yet, I just want to see how things work. There are a million other ways to use Medium for income besides the basic fact of being paid for views. Since I don’t have to niche I could write articles here and there on transcription and invite folks to get deals where they could get free or cheaper transcription at times when I don’t have as much work.
How much do I need to make to be able to charge a client what they are happy with and what I am happy with while also being able to pay a transcriber a rate that feels good to both of us? That might depend on the time I put into editing and reviewing but if I spend an hour looking over a 60 minute file and I am paid $.30 per minute on top of what the transcriber is paid that comes out to $18 for looking over a 60 minute file. So I have essentially created a job where I am payingbl myself $18/hour mostly for reading and editing. Not too bad at all, especially if I am into the project itself.
Inflation has happened in the pandemic, not to mention inflation of millenial’s net worth which means I have a bit of catching up to do but reaching that average in a reasonable timeframe is doable. I’ve had folks happy to be paid as little as .$60/minute or even less and I have been paid as much as $2.05 cents per minute for transcription projects. This leaves a really wide spread in beteeen what I make and what I pay out to increase transcriber pay a but and decrease transcription costs to the client.
I prefer to pay a bit more and ideally charge a little less. What if I paid transcribers $1.15 (sounds fair) and charged $1.75 for services? That is a spread of $.60 profit for me every minute which doubles what I can make for an hour of editing to $36/hour.
Now, some of these files will be clear audio and with transcribers who are trustworthy enough that I can double the playback speed. Some transcribers will be trustworthy enough that I do not really need to look over their work too much. So it makes sense to say I would be getting paid $.60 per minute (or $35/hour of audio editing) now!
If I can go through the audio at a speed of 200% that turns out to $75/hour for every hour I spend editing audio and that sounds like a good business model to me. I spend 20 hours per week editing audio on a project I enjoy doing and make $75 * 20 = $1500 a week, over $6000 a month.
If I can make that money through reading and editing transcripts, and creative and intuitive outsourcing, If I put it in my savings account, at the end of every month I am making an extra $25 in interest. So at the end of the year my transcription income for one month of work would generate roughly $300 more from interest and then that’s an extra $15/month, month to month, coming my way due to that $300. So after a year I am making more than $35 per month on that one month of part-time transcribing. If I take it as income already that can let me be financially independent as far as paying for Netflix and am phone service ) if I choose a cheap one) but I’d rather keep putting the money to work, wouldn’t you?
Say I feel confident that the fundamentals on an REIT (real estate investment trust) which lets you invest in real estate and earn a share of real estate income without having to buy and manage properties, Brandywine Realty, a thoroughly Tolkienssque REIT, offers upwards of a 19% yearly dividend yield. If I do the technical analysis and assess I am not bearish on this stock I might buy it, the sooner the better, perhaps, so lets put our 5.05% interest account worth $6000 when we finish the transcription project into a REIT with 19% interest. Maybe diversify, some in savings, some in the stock, depending on what we expect the stock to do. Assuming the stock does go bearish, instead of $25 per month as with our high-yield savings account, we are now seriously earning $95 a month on principle that came from one month of part time (80 hours) work.
Then I write about all this stuff and other things on Medium, there are various ways I can make more money. I can invite folks to sign up to get lower cost transcription when I have more availability and such things, and offer other services when the time feels right. Medium income contributes to these ROIs and my Medium views will hopefully funnel leads to my transcription business because if working part time for a month can earn me almost $100 a month which compounds and accumulates quite quickly: at the end of the year we will be making more than $118 per month on a part time one month reading and light editing project that I did for a month.
Say instead we invest that $6000 in options. Instead of growing to $7200 (effectively earning us $90/hour for our one month of part-time work now) it could potentially grow 2.5% weekly but let’s just say that is monthly to be really conservative.
$6000 + ($6000 * .025) = $6150.
= $8027.99 after twelve months.We have now effectively made $102.60/hour on our month of part-time work. Wouldn’t that be incentive to find the clients to work full time? The more you work the more younare incentivized per hour in effect! Our effective hourly earnings would be so mich higher still!
Now, this is a return of 2.5% per *month*, not 2.5% per week, and even if you were only getting returns of 2.5 per month on options trading, it already looks better than a REIT, but REITs look pretty good too, so this might be a diversification strategy. I am not even going to try compounding it by 2.5 per week like the above calculations but at that rate, if we can believe that we can be that successful trading options that half-time one month commitment to transcription has earned us $14615.60 in interest of a total on initial payout of 20.615.60 for an all time rate of return of 243.59%.
We were making $75/hour for $6000 in a month for 20 hours of transcription a week. If we take the interest into account, at the end of the year we have $7200, for 80 hours of work, not $6000 for 80 hours of work, so our effective income per hour at that point is if we let the interest accumulate over a year we can say that for a month of doing transcription we make $90/hour, effectively, thanks to an investment in real estate (and real estate is how average millenial net worth grew so much over the course of the pandemic!)
Of course the effective monetary value of our hours spent working keeps increasing! The next year, if we consider it like holding money in a CD for 2 years and do not touch it, we will have over $8568 at the end of two years, if we chose to keep all our money here, but we can be more strategic with that, too. That brings us to $107.10/hour effectively (after two years) though we might want to do something even more lucrative with the money and we are starting to have lots more options (no pun intended).
Maybe we double our hours to 180 in a month. So we make twice as much: $12000. In one year with a REIT with a 19% dividend we will have $14,489.41. Divide that by 180 hours of work and already within just *one* one year that turns into $90.56 per hour.
Let’s say we did buy and sell options, and they really do earn us 2.5% a week, that could turn into $20615.60 in one year. If we are successful in our trading, in a way that is reasonable to stretch for considering the nature of options trading, we made $257.70 for a part time job editing transcripts to make happy clients. A more conservative investment might be just working full time for a month. We would start with 160 hours and $12,000. We will get more clients by word of mouth too because making an effevtive $257.70 an hour to edit transcripts sure sounds lucrative if we could do it. We might want to do this for longer than one month, if we are potentially capable of making that kind of money.