5 Ways Pharmacists Generate Passive Income
In this post, I will describe 5 five ways pharmacists can generate passive income.
There are two types of income sources: active and passive income.
Pharmacists get their active incomes from working their full-time jobs.
You can get creative with this. I have personally known pharmacists who are trying to earn extra income in a variety of different ways.
First, there are pharmacists that work full-time jobs at a community pharmacy and pick-up extra shifts at their local hospital during their off days.
On the other hand, there are pharmacists who work in as a hospital setting and pick-up PRN shifts at a community pharmacy.
Lastly, there is a new unique set-up that I came across. This pharmacist works two part-time jobs plus a PRN position. This setting is unique because it allows this pharmacist to consistently get more than 60 hours per week.
This is an awesome income stream! However, the trade-off is that this pharmacist does not receive any sort of benefit afforded to him from a full-time job. Plus he is working all the time and is going to be affected by a possible pharmacist burn-out syndrome.
Is there an alternative? In this post, I will explore various ways pharmacists can achieve passive incomes. If you talk to any financial adviser, they’d recommend you to:
- Start investing as soon as possible
- Diversify your investments
- Increase your income streams
So what are the different types of passive income pharmacists participate in?
5 Ways Pharmacists Generate Passive Income
To reiterate, passive income is various ways you can make money without having to play an ongoing, active role in earning it. There are many ways for you to generate passive income but these are the most practical and effective currently.
This is a good option for pharmacists looking to invest their extra money. It is usually recommended that you save enough money to cover at least 20% of the cost of the house before deciding to get an investment house.
One of the benefits of putting down a 20% down payment is the added benefit of forgoing the PMI or mortgage insurance. Buying a house and renting it out is not one hundred passive of course.
You have to work to find tenants and maintain your rental property. Essentially, you’re getting the renter to pay for your monthly mortgage payment plus a little bit of extra income.
If you don’t have the time and effort with rental properties, you can try your luck with real estate investment.
There are currently three main ways to invest passively in real estate.
1. Real Estate Investment Trust (REIT)
2. Real Estate Crowdfunding
3. Real Estate Syndicate
I plan on investing in REIT and Real Estate Crowdfunding in the future and will update you on my return of investments.
If you’re interested there are good resources out there on this topic.
1. Passive Income MD: The Best Real Estate Crowdfunding Sites
2. US News: 7 Best Real Estate Crowdfunding Platforms
3. Money Under 30: Real Estate Crowdfunding: Should You Invest?
4. Financial Samurai: Real Estate Crowdfunding Learning Center
5. The Best Real Estate Crowdfunding Sites Right Now
Selling a book or Ebook
As with any passive income, you have to initially put in the work then the passive income part will kick in. Having a book for sale is another excellent way pharmacists can secure a good source of passive income. The income comes from both sales and royalties from your book. Don’t believe me? You can check out blogs from Med101, the Happy PharmD, and Your Financial Pharmacist.
Eric Christianson from MedEd 101 created several books for sale on Amazon. One of which I own and recommend it as a resource for BCPS board certification preparation.
Alex Barker from Happy PharmD published a book title called “Indispensable: The prescription for a fulfilling pharmacy career.”
YFP team of Tim Church and Tim Ulbrich published “Seven Figure Pharmacist: How to Take Control of Your Financial Life.” I have yet to read both of these books but here are two reviews you can check out if you’re interested in this book. Read it here and here.
Affiliate marketing is when you’re agreeing to promote certain products or services in exchange for a small commission or fees. The most well-known affiliate marketing program online is the Amazon Affiliate program among others.
Affiliate marketing is a good way to earn a little of referral fees and commissions before you earn money from Google Adsense or Mediavine advertising networks.
If you want to see all of my affiliates, please see my recommended page and the best pharmacist refinance companies.
Also, please check out my post regarding how to monetize your blog here.
You can think of peer-to-peer lending as online social banking. Borrowers come to the various pee to-peer companies looking for a loan with better terms than their local banks. Investors come looking to lend their money at better rates of return than what their banks offer.
Two popular p2p lending companies right now on the market are Lending Club and Prosper. There are others too. Curious? Check out these two posts:
- The 8 Best Peer-to-Peer Lending Companies of 2019
- Best Peer-To-Peer Lending Sites For Borrowers And Investors
Dividends from Stocks
There are so many ways to invest in stocks. There are mutual funds, index funds and robo-advisors such as Betterment. You can buy stocks directly by opening an account with E*trade, Fidelity, Charles Schwab, and TD Ameritrade or the like.
Whichever method you decided, these investments will bring you both market appreciations and stock dividends.
Since I published this post, I wanted to go back and do some more research on the internet for more supplemental information.
This posts from Pharmvest gives you a good how-to for real estate investment, you can read it here. I am also a fan of the White Coat Investor and Passive Income MD. You can read their thoughts on real estate investment here and here.
Subsequently, I read a post from Passive Income MD regarding peer to peer lending. I read about P2P lending return of investment in another post and they’re also on the fence about it. In fact, if you’re not careful, you may get negative return of investment from peer to peer lending.
Based on there reviews and experiences, I may push this investment vehicle further down my list and focus more on passive income from dividends and real estate investments.
The idea of having passive income is to increase your income streams and allow you to invest or save more money.
After you have generated some passive income streams. How many passive income streams should you have? You should aim for as many streams as possible. Your day time job, rental properties, investment in stocks and other business ventures should be enough.