Unlock Passive Earnings: Build These 6 "Digital Online Vending Machines" for Mostly Automatic Income
- Larry Jones
- Apr 12, 2024
- 8 min read
Updated: Apr 19, 2024
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Introduction
For many years now, I have been on the hunt to purchase at least one physical vending-type business. I've looked for standard vending machine businesses. I've looked at laundromats and car washes. I've searched for these businesses on websites such as BizBuySell.com, Craigslist.org, and Loopnet.com. I've called and talked to business owners and brokers. I've even visited the locations of businesses for sale. For one reason or another, I've never been able to pull the trigger on one of these business purchases. Out of all the ones I've looked at in recent years, there's really only one that I regret not buying - a deeply discounted laundromat that is only a few miles from my house. I delayed on making an offer, and another investor snatched it up!
In the meantime, while still trying to find a good deal on a physical vending business to buy, I've been busy working my investing plan. My wife and I own a rental property as well as invest in all your "standard" work retirement accounts - our 401(k) and 403(b)'s. We also have Roth IRA's that we are maxing out. These are all pretty standard investing approaches that most people are aware of.
Over the years, though, through regularly educating myself in the personal finance information world, I've discovered other ways to invest that are simple, easy, and take very little time to manage. What I'm about to share here in this post, I consider to be online versions of vending machines. You spend a small amount of time monitoring and growing these investment vehicles, and they can generate a small, yet steady passive income; some deliver daily, some monthly, and some quarterly. Every day that I continue to own and manage these digital assets, the more convinced I become that these are a lot easier to manage and maintain over physical businesses. And now, most days, I have the thought, "forget about physical vending business opportunities. Pour more money into these online assets!"
What Are "Digital Vending Machines?"
For this blog post, I'm defining digital vending machines as online assets that generate some kind of cash flow, whether that be interest, dividends, royalties, rewards, affiliate income, or product sales.
As I mentioned in the Introduction above, there are numerous online opportunities to invest, even for non-accredited investors. While you need to do your due diligence on these online, mostly passive, relatively easy investment opportunities, the alternative investing vehicles discussed in this blog post can bring unique diversification to your overall portfolio.
6 "Digital Vending Machines" for Passive Income
This list of passive investment vehicles will be in order of easiest to most difficult to execute, at least on the investing front end. For example, in the first digital machine, all you need to do is spend money. Can't get much easier than that! And then in the second machine, you need to sock away a decent amount of cash to make some interest income. Now, that will require a bit more work on your part to save up some money, and so on.
So, with this progression of easiest to hardest investing instruments in mind, let's dive into my list of six digital, online vending machines that I'm creating and building upon over time.
Digital Vending Machine #1: Credit Card Cashback Rewards
This one has to be the absolute easiest of all passive income streams because all you need to do is the following:
Apply for a credit card that has a great cashback reward system. Cards that I like utilizing for cashback rewards include the Chase Amazon Prime card and Chase Freedom Unlimited card.
Put as many high-dollar charges on the card as possible. We're talking utility bills, tax payments, recurring subscriptions, groceries, charitable gifts, gas, etc. The more normal, regular budget expense charges you can make, the better. You don't want to rack up a bunch of unnecessary purchases that you can't afford.
Pay off your card balance every month without fail! If you don't pay it off every month, then you may as well not even employ this passive income strategy. Carrying a balance will activate interest charges and negate any financial reward.
Depending on the type of cashback rewards card you have, you will be able to take advantage of these rewards in different ways such as a direct cash transfer to your bank account, applying to your card balance, gift cards, and more.
Digital Vending Machine #2: High-Interest Savings Accounts
Again, this is another digital passive income strategy that is relatively easy to setup and execute. If you have some excess cash, you can stick it into a high interest savings account. Depending on current interest rates and how much cash you want to remain liquid, you could earn from a few extra hundreds of dollars in annual interest money up to several thousands.
Some higher interest savings accounts I have used over the years include:
Digital Vending Machine #3: Dividend Stocks
In the previous passive income machine, I mentioned the M1 High Yield Savings Account. This savings account offered through M1.com is just one part of their financial offerings. The main reason I created an M1 account several years ago was for the purpose of purchasing dividend stocks through its investing brokerage.
Through my M1 account, I now own several stocks of dividend paying companies such as Apple, Bank of America, American Express, Coca-Cola, and many others. A few times a month, I receive dividend payments from a few of these companies. Some of these dividend payments are a few pennies. Other payments can be several tens of dollars depending on the company and how many stocks I own.
Regardless, these dividend stock holdings provide a small but reliable income stream that adds to my digital portfolio.
Digital Vending Machine #4: REIT Dividends
I currently invest in two REIT companies that provide regular dividend payments:
RealtyMogul.com - of the two REITs presented here, I have the least amount of money invested in this REIT. The dividend payout happens monthly through RealtyMogul, and the average monthly dividend is around $50.00. This amounts to approximately a 6% annual return on investment.
Fundrise.com - for a few reasons, I decided to regularly and aggressively invest monthly into this REIT platform. Of the two companies, this one seems to be the most robust and user friendly for regular, ongoing investing. The dividend payout happens quarterly every April (Q1), July (Q2), October (Q3), and January (Q4). My annual rate of return averages around 5.4%. My current quarterly dividend payout is around $560.00 and growing each quarter. I would anticipate by the next quarter payout, I will be averaging almost $200/mo in dividends. For the ease and convenience of this REIT, I believe these to be solid returns. I have no toilets to plunge or grass to mow. This is easy breezy real estate investing compared to my rental house. Click on my Fundrise referral link to sign-up today!
Also, check out this post on REIT investments.
Digital Vending Machine #5: Peer-to-Peer Lending
How do banks make money? The primary way is through charging interest to individuals and companies for money loans. With peer-to-peer lending platforms, you get to act like a bank. You can loan your money out to others and receive both principal and interest payments over a prescribed timeframe such as 3-5 years depending on the platform.
I currently utilize two peer-to-peer lending platforms for regular, ongoing passive income. What's really cool about these two platforms is that I have small amounts of income invested into hundreds of very small notes ($10-$25 per loan) that have very small payouts. As the borrowers pay the micro loans back each month, it's interesting to watch my account activity, because this is about the closest thing to online vending as you're going to get with small repayments back to me almost happening daily.
Prosper.com - while the Prosper platform is extensive with several different financial offerings, I currently only use this platform for peer-to-peer lending. I make regular, ongoing micro loans to borrowers who need personal loans for a variety of reasons, and then these borrowers pay back the principal and interest. I currently don't have a lot of money invested on this platform. I really should invest more, though, because my current rate of return is around 9%. Probably the best return I'm receiving from all my alternative investments!
Groundfloor.us - the Groundfloor peer-to-peer platform is unique in that it is a combination of a real estate investing platform with peer-to-peer micro loans. I believe many real estate investors use this platform for short-term bridge loans, so many times you get your small investments (principal + interest) back fairly quickly. Again, it's fun to look at the investment activity ledger and see money pouring back into your account on an almost daily basis, just like if I were selling snacks in a vending machine. Check out my Groundfloor referral link to sign-up for an account, today!
Digital Vending Machine #6: Digital Products
Okay, so I saved the hardest income streams to set-up as my last online "digital vending machine." Creating digital products takes time and energy to set-up, unless, of course, you are selling other people's products. Personally, I like creating and selling my own stuff.
For example, I have eBooks, Audible books, and paperback books all for sale on Amazon. Check out my Amazon author page to see all my currently available books. While the paperback books are technically not a digital product, they are available online and printed/produced by Amazon. I do not need to hold physical inventory of these books. Once I have everything set-up on the Amazon site, they do the rest of the work, so it's still a very passive product after my work is completed.
My digital products provide me a small trickle of unreliable income. My ultimate desire is that they earn A LOT more than they currently do. I am working a plan (this website is part of that plan) to increase my online presence and offer more products over time tied into the Speak the Language of Money brand. Only time will tell if my strategy is successful, but I am believing the best!
How I Track All My Digital Vending Machines
Yes, I am a personal finance geek. I like to spend a little time each day tracking my family's personal finances. I've been doing it for years.
A couple of years ago, I ran across some spreadsheets that track various parts of your personal finances, and I had an epiphany that I could create a spreadsheet that tracks all of my family's passive income streams! So, that's what I did. I created my very own passive income tracking spreadsheet and use it daily.
Would you like your own copy of my sheet that you can completely customize yourself? To receive your own FREE fillable net worth spreadsheet, passive income tracker, and more, click on the link below to sign-up to our email list! |
Conclusion
In wrapping up this exploration of "digital online vending machines," I've discovered that they present an exciting and potentially lucrative alternative to traditional physical vending businesses. My own journey has underscored the simplicity and accessibility of these online income streams, which resonate with today's digital-focused economy. From cashback rewards on credit cards to engaging with peer-to-peer lending platforms, these digital investments offer not just convenience but also a diversified source of income that can bolster financial stability and growth.
Reflecting on my initial pursuit of physical vending businesses, I've come to appreciate the shift towards these digital avenues that favor flexibility and reduced overhead. Each of the six digital vending machines I've detailed here serves as a step in an investment continuum, providing clarity and ease for even non-accredited investors looking to expand their portfolios. This shift not only makes investment more accessible but also aligns with modern financial practices that value automation and efficiency.
Personally, delving into these digital assets has been transformative, reinforcing the importance of ongoing education and strategic planning in personal finance. For those of you considering similar ventures, I urge thorough due diligence and a proactive approach to financial management. The digital landscape offers abundant opportunities for passive income, yet it demands a commitment to learning and strategic foresight. Armed with these insights, we can navigate the complexities of modern investing and potentially secure a more affluent financial future.
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