What Is A Passive Income Stream Worth?

What is a passive income stream worth?

Personally, I think passive income streams are worth a lot more than what people realize.

As someone who recently quit their job to travel the world, earning money while you sleep is very important.

My work schedule is pretty erratic these days to be honest. Some days I’m doing big day trips (like a 2.5 hour to the mountains of krasnaya Polyana in Sochi) and don’t have time to work.

Other days, I’ll be closer to my Airbnb flat and can crank out 4 – 5 hours of high quality work.

So the ability to earn even when I’m not actively working is something I love about passive income. And it supports my lifestyle as well.

What determines a passive income stream is worth?

Overall, there are a three things I look at when evaluating a passive income stream.

The first is the monthly income potential (that’s net profit, not sales). Obviously, the higher the better!

The second thing I want to evaluate is scalability. Can this business be scaled? Can I throw advertising dollars at it and make a decent return?

And finally (and probably most importantly), I evaluate the amount of maintenance required to keep the income stream running.

I don’t care what anyone says. ALL passive income streams dry up over time.

If you own a rental property, you have to make repairs and deal with tenants.

If you own a niche site, you need to fix broken links, find new affiliate programs if the previous one is no long available, and just deal with regular website bullshit.

So the amount of maintenance work required to keep the income stream going is important.

To me, these are the three (profit, scalability, and time) that determine how much an income stream is worth.

Now…how do you properly “value” a passive income stream?

How I value passive income streams?

The way I think about passive income streams has changed over time.

Previously, I always thought about how much it was worth if I could sell it. Would it be 6x annual earnings or 10x annual earnings?

But ever since I “retired” and travel the world now, I look at it very differently.

When I look any income stream these days, I look at how much passive income it can earn me.

So say I have $10,000 to invest. How much passive income can it earn me?

Well, I could invest it in a high yield savings account and earn around 2% per year guaranteed returns.

I could also invest it in the stock market and earn around 7- 8% annually over the long-term.

And that’s exactly how I look at my passive income streams these days!

The other month I put some adsense ads for a smaller niche site that wasn’t converting much.

Anyways, the adsense income isn’t anything crazy – about $2 bucks per day on average.

But that’s about $60 bucks per month…or $720 bucks per year!

Do you know how much you’d have to invest to earn $720 of passive income every year?

You’d have to invest $36,000 and earn 2% to be able to earn that kind of money!

Pretty crazy if you think about it, right? I just put some ads on my site and it is literally the equivalent to investing $36,000 dollars into a high yield savings account!

What Are My Most Valuable Passive Income Streams?

These days I earn passive income through a variety of ways…including:

Selling erotica

Selling eBooks

Online courses

High yield savings

Audio Books

Niche sites

Dividend investing

Real estate crowdsourcing

I would say my most valuable sources of passive income out of this list would be (1) selling erotica, (2) selling online courses, and (3) audio books.

Most of these income streams are highly scalable and don’t require much time to manage at all, which I love.