How To Build A Money Making Machine – The Complete Guide
It goes without saying that passive income is pretty amazing. After all, who doesn't love the idea of earning income while they sleep or go about their daily life?
And if you want to create extra income streams, I think one of the best tactics is to invest time and energy into building various money making machines.
I've been building money making machines since my time in college when I got into phone farming. And since then, I've created several income streams that are either semi- or fully-passive.
So in this post, I'm sharing some of the ideas that have worked best for me, as well as a few other ideas that anyone can get started with.
Let's get to it!
What Is A Money Making Machine?
A money making machine is an asset that generates income on its own and uses the income to produce even more income at a faster rate. In other words, it's an income stream that grows over time by producing income and then reinvesting it to fuel growth.
Many money making machines are completely passive, so you can sit back and make money on autopilot once you get them up and running.
In contrast, some machines take a lot of upfront time and resources to build. But once they're operational, they largely take care of themselves.
Each type has their pros and cons depending on how active you want to be. But both types have the potential to seriously increase and diversify your income.
How To Build A Money Making Machine
I've been building money making machines for a few years. Some have failed miserably, while others have grown into pretty decent income streams that I've then used to build other machines.
Generally, here's how the process works:
- You identify an asset that can potentially produce income
- You invest time or capital to acquire that asset
- You monitor the asset and fuel it so it begins making income
- You use that income to make the machine run or to buy other income-generating assets
As for what kind of assets you can buy, there's actually plenty of options!
1. Start An Online Business
An online business is one of the best ways to create a money making machine, and there's a few reasons for this.
The main one is that starting an online business doesn't have to cost much. So, pretty much anyone can give it a try without risking much money upfront.
Secondly, online businesses can have extremely high income potential and low fixed costs. Once again, this limits risk while presenting a lot of potential.
And, finally, there are so many examples of online businesses you can start. I've tried many over the years, ranging from a Shopify dropshipping experiment to selling meme mugs on my Etsy print on demand shop.
To build a money making machine, I think print on demand, or POD, is one of the best business models. This is because you don't have to pay upfront for inventory, and you work with a manufacturing partner to create, package, and ship your products to consumers.
POD businesses are also very scalable, and you can sell on marketplaces like Etsy with various POD integrations.
Alternatively, you can list your designs and products on websites like Redbubble or Society6, selling on a marketplace of millions of customers.
As your designs begin to sell, you can then invest your time into creating more unique products as you learn what consumers like. You can also invest the money into growth by paying for design help or for someone to manage your shop.
POD also has a pretty high income ceiling. Just check out this YouTube video from Etsy Shop owner Tim Koa, who shares how he made over $40,000 in 2021 from his shop.
It can take a long time to get any online business up and running. But once you do, you'd be amazed at the scaling potential and how fast you can grow with the right product and sales funnel.
2. Invest In Stocks & ETFs
Another straightforward way to create a money making machine is to start investing. And I like this method of putting your money to work since it's very accessible.
These days, pretty much any online broker is commission-free, and you can start investing in various stocks and ETFs without worrying about high fees. And thanks to fractional shares, it's often possible to start investing with just a few dollars.
Personally, I've been focusing on various dividend stocks and ETFs for my mission of creating new income streams. I like dividend-paying assets since you can reinvest dividends into more shares to fuel future growth, but that's just me.
And since you have the power of time and compound interest on your side, even a small starting amount can yield great returns in the long run.
For example, if you invest $500 a month at an annual rate of return of 7%, you'd have almost $600,000 after 30 years. And this is if you start at $0!
Now, there's no cookie-cutter answer for what to invest in. Really, it all depends on your goals, risk tolerance, and what type of sectors you want to invest in.
But the great news is that there are so many guides on how to begin investing out there and awesome free information. And I always recommend speaking with a financial advisor or professional if you have questions.
Even services like The Motley Fool can help get you started by providing stock pick recommendations and quality research from expert analysts.
Ultimately, I think investing is a great way to generate income and wealth. Just make sure you do your research, due diligence, and speak with a financial professional if you need advice.
3. Make Money Blogging
Out of all the ways to create a money making machine, I think blogging is my favorite. And it's also my most successful money making machine, generating $20,000 a month or more at the time of writing.
For some context, I started WebMonkey in early 2018. And in my first year, I only made $1,700 after hundreds of hours of work.
But fast forward a few years, and the blog earned $92,000 in 2021. And for 2022, it should earn over $200,000.
Most of this blogging income comes from Mediavine ads and affiliate sales. But I know plenty of other bloggers who also earn from sponsored posts, coaching, and selling products.
I personally love the ads and affiliate combination, and Mediavine alone makes $500 a day or more, which is crazy to me.
Now, the reason I view blogging as a potential money machine machine is because it's an incredible vehicle for generating wealth if you feed it content.
For example, I spend at least $1,000 a month paying my awesome freelancing writing team to help write articles. But those articles begin generating revenue the second they go live and begin getting views.
This is how you can scale a blog over time. And I've found that blogging has become a lot more passive these days versus when I started.
There are also plenty of blogging niches you can explore. And starting a blog can be free or barely cost more than a cup of coffee a month when you're starting out.
If you're ready to launch your own blog, you can check out Namecheap for affordable, professional WordPress hosting, domain names, and more.
4. Invest In Real Estate
Like investing in stocks and ETFs, another option to build a money making machine is to invest in real estate.
Historically, this was easier said than done. But these days, buying a rental property is quite expensive, and even tactics like house-hacking with a duplex take a lot of upfront capital.
The good news is that real estate is still on the table. For example, you can always invest in various publicly traded REITs, which are companies that own and operate income-generating real estate.
Alternatively, you can invest in real estate through crowdfunding companies, buying shares of assets like multi family homes and commercial real estate.
Fundrise is one beginner-friendly crowdfunding company as an example. It actually lets you invest starting with only $10, and historically, it's returned about 8-9% annually.
I also like Fundrise since it pays out quarterly dividends, which you can reinvest to keep this money making machine going.
As for fees, it charges 1% in annual fees, which is a bit lower than some other competitors in the crowdfunding space.
The bottom line is that real estate can generate consistent income. And with crowdfunding or REITs, you don't need to be wealthy to get in on the action.
Start investing with Fundrise!
5. Rent Out Your Assets
Speaking of rentals and generating income, one more way to create a money making machine is to rent out things for profit.
The idea here is similar to running a rental business; if you have an asset that's valuable, you can probably find people willing to rent it from you rather than buying it.
Some popular example of things you can rent out to generate income include:
- Your extra storage space with a company like Neighbor
- A spare room through Airbnb
- Your car with Getaround
- Equipment like cameras, instruments, drones, tools, and electronics with Fat Llama
- An RV with RVshare
Fat Llama, a general rental marketplace, is an excellent example. Just take a look at the photo above where someone has rented out their pressure washer over 790 times, which would have earned around $15,000 at the $20 daily rental price.
This just goes to show you that you don't need a lot of money to build a money making machine.
And platforms like Neighbor don't even require any money since it just lets you rent out extra storage space you're not using. Talk about some nice, easy free money.
6. Invest In Other Assets
One final way to get a money making machine is to put your money to work by buying other assets.
Like I mentioned, stocks, ETFs, and real estate are some of the income-generating assets I've been considering the past few years. I also put money into equipment to launch my YouTube channel, which now makes over $1,000 a month in mostly passive income.
These are just a few examples though. And other assets that you can consider include:
- Index funds
- Artwork with a company like Masterworks
- Bonds
- Wine with a company like Vint
- Certificates of deposit (CDs)
- Small businesses with a platform like Mainvest
Many of these ideas let you get started without much upfront cash. And, over time, you can reinvest your earnings to keep the income machine rolling.
Just note that returns aren't guaranteed with pretty much any investment. And again, you should speak with a financial planner or professional if you need advice for your specific situation.
What Are The Benefits?
Now that I've covered some strategies you can use to create a money making machine, here are a few of the potential benefits building one can provide:
- Diversification: With several income streams, you're more diversified, which can help reduce risk.
- Wealth Building: While a bit obvious, one major benefit is that these machines can help you build wealth at a faster rate than just having one income source.
- Flexibility & Freedom: One of my favorite aspects about money making machines like a blog, YouTube channel, and investments is that it helps unlock more freedom. Since I started blogging, I've been able to live and travel to different countries and continents, and I've loved the location independence it's unlocked.
Tips For Creating A Money Making Machine
I want to wrap up this post with a few tips I've personally found quite helpful while trying to build different machines that make money over the years:
- Try Several Ideas: As mentioned, diversification can help limit risk. It can also help you discover which machines work and which ones don't. So, don't be afraid to invest in stocks, to start a blog, or to use platforms like Fundrise to get started.
- Reinvest Earnings: Income can help fuel a money making machine to run faster, or let you start a new machine entirely.
- Put In Upfront Work: For me, my best income sources like blogging have come after a lot of upfront work. So, don't always shy away from active income since it can be quite powerful.
Extra Reading – The Best Passive Side Hustle Ideas.
Final Thoughts
Thanks to technology, there are so many ways you can put your money to work and diversify your income. And, hopefully, some of the ideas for building a money making machine that I've covered help you accomplish just that.
For me, I'm going to continue with investing, blogs, and YouTube for the near future. But there's no single right answer for how you can get started.
The video above shares some of the strategies I've used to build multiple income streams, but again, you have to do what makes sense for you.
Play to your strengths, do your research, and put in the work! You might be amazed at how far you end up after just a few months or years of effort.
Best of luck, and thanks for reading!
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