Tuesday, January 24, 2012

Candy Machines

If you google passive income you’ll find several articles, largely they spout identical advice.  Real-Estate, Invest (stocks/bonds), Peer to peer lending.  The trouble is that these are capital intensive.  Many of them make suggestions for less capital intensive projects, but they are mostly related.  One common suggestion is rental unit management where you convince rental unit owners to let you manage their property for a portion of the rental unit income.  Unless you have some compelling skills or experience in the area, its not really something you can just pick up.  If you can also convince people to let you manage their  investments, this works too.  (There may be some legal hurdles for both of these things).

One common suggestion that never occurred to me was to buy those small quarter candy machines.  Apparently these cost about $200 and produce on average about $25 per month in profit.  The return-on-investment (ROI) with these machines is massive (with these numbers) is 150%.  This comes at a price, first of all you have to be able to place the machines in locations.  This means a lot of cold-calling to business owners.  You can’t really pay them enough to justify them caring.  The best your could reasonably offer them is something in the single digits.  $6 a month isn’t going to convince anybody. The common answer is to give a proportion of the revenue to charity.  This is common enough that some charities have programs ready made for candy machines.    

While one of these would be good at handling my $5.61 shortfall next month, it seems to have a certain quality of sceminess to it.  Cold-calling isn’t my forte’ and I don’t know how to justify the business owner using my machine over simply buying their own.  It appears to me that several self-proclaimed “passive-income guides” mention this as a strategy.  It’s so off the wall my suspicion is that some blog did it first then the other passive income guides just picked up on it.  

I’ll go ahead and try to scope out possible locations where I could do this.  If I get any bites I’ll go ahead and try to do it.  There are surely better ways to accomplish a $5.61 monthly passive income stream.  Other passive income streams that don’t directly involve buying assets generally require some time input in order to get set up.  This blog for example.  While its likely that this will never amount to an income stream of more than a gumball a month.  People do invest time into blogs like these in order to develop income streams, though its hardly passive. 

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