How I Earned $4,100 Without Working – The Beauty of Passive Income

by Ryan Guina

My wife and I are slightly behind on getting our taxes done this year. The good news is that I should be finishing them up this week. One of the things that interested me this year when getting my tax paperwork together was our 1099 forms (for tracking interest, dividend, and other income).

The interest and dividend payments were the only 1099s that were applicable to my wife and I. When I tallied up the total of how much money my wife and I earned in 2007 from interest and dividends, it surprised me – the total was just over $4,100! I couldn’t believe we earned over $4,100 without working – that is well over $300 per month!

How we earned $4,100 without working

Well, I won’t break down the specific numbers, but I will tell you the types of income. I will also make a note that interest rates last year were very good for increasing your earned interest income!

Last year our $4,100 came from:

  • Earned interest from bank accounts and Money Market Accounts
  • Dividend income
  • Bank account and referral bonuses
  • Credit card rebates

Earned interest. Earned interest from bank accounts and money market accounts is self explanatory, so I won’t go into any details there. Just note that the rates this year are 30-40% lower than this time last year, so I don’t expect those numbers to be the same.

Dividend income. As for dividend income, my wife and I do not hold any stocks in individual companies, although I have thought about investing in dividend paying stocks in the future. For now, we are investing solely in index funds, which is where our dividends came from.

Bank account and referral bonuses. First, it is important to note that these count as earned interest for tax purposes. Last year, I took advantage of several bank bonuses which I received for joining a new bank or opening a certain account. The highest of these was $150, but I opened several other accounts with varying bonuses.

Perhaps the most well-known bank bonus is the $25 Capital One 360 bank bonus. New members who sign up with a minimum of $250 get a $25 bonus. If you refer someone who signs up, they get $25, and you also get $10. Do you see where I’m going with this? Repeat this process a few times, and you can make some very nice money.

Credit card bonuses. I also took advantage of a couple credit card offers for free money. This includes signing up for new cards for the bonuses and receiving cash back bonuses and rebates. The good news is that most bonus money you earn by signing up for credit cards is considered a rebate, which is not taxable! Be sure to check with a tax professional for the exact situation though!

How much can you earn by doing this?

A lot! My $4,100 was a mixture of interest income from cash on hand, dividend payments, and bank and credit card referrals and bonuses. While that seems like a lot, and it is, it is by no means the upper limit. There are a lot of regular folks who are able to take advantage of similar deals and situations to get a lot of free money. Here are two examples:

$5,000 – Rocketc, the blogger at Rocket Finance, just wrote a three part series about doing referral bonuses to earn income to make up for a budgeting shortfall. He was able to earn over $5,000 without working over the course of a year!

$11,500 – Madison, from My Dollar Plan, has over $200,000 in credit card debt that she uses to fund high interest savings accounts and make other strategic financial moves. The money is from 0% balance transfers, so she pays no interest as long as she makes the minimum payments on time, and pays the bill in full when it is due. She estimates doing this combined for earnings and savings of over $11,500 last year!

I am trying to increase my passive income next year

It might be tough to repeat these same numbers this year because the fed has drastically lowered the interest rates. However, I am doing a few other things to try and increase my passive income for next year. Hopefully a few of them will work well!

Anyone can get these types of bonuses. Here are a few ways to earn some free money with bank bonuses and referrals. It is easy for just about anyone to get over $100-200 in free referral money from that page. So go earn a few hundred dollars! ๐Ÿ™‚

Note: I may be a little loose with my definition of passive income – many people consider earned interest and dividends as portfolio income. Still, $4,100 without working is exciting to me and I want to do this every year!

Published or updated May 21, 2013.
Print or e-mail this article:

{ 15 comments… read them below or add one }


Nice sources. When we downloaded out tax forms for ING we discovered we earned over $1000 in interest from savings, CD’s, and referrals!

Let us know how it goes with your passive income!


2 Kirk

I remember as a young man when a very smart small business owner I knew told me that he spends his day trying to create PIGs. I gave him a dumbfounded look wondering what would ever motivate him to deal with pigs. They are such dirty creatures. He chuckled and told me that PIG stood for passive income generator.

This includes the interest and dividends that Ryan mentioned, but it also includes having systems in place that generate revenue without you actually working for it. It could be a blog where someone may click on a link at 3am while you are fast asleep. Or, it could be employees who earn a return for you on their salary.

So keep hunting those PIGs, Ryan.


3 Dividend growth investor

Way to go Ryan! If you invest your passive income you could generate even more income. A double/triple rising passive income progression ๐Ÿ™‚


4 David

A lot of people consider blogging a passive income, but you and I know it not to be true! Alternative, yes…passive, not so much.

Glad you have “alternative” income coming in, it’s a nice feeling and congrats!


5 Dividends4Life

Excellent! Invest it into a good dividend stock and the PIG will grow every year, ๐Ÿ™‚

Best Wishes,


6 Ryan

Kirk, Great comment! I’ve never heard it called PIGs before, but I love it! I wanna be a PIG farmer when I grow up! ๐Ÿ™‚

FFB, Congrats! It’s a great feeling, isn’t it! ๐Ÿ™‚

DGI, I love compound interest, and I plan on using that + time to work in my favor. ๐Ÿ˜‰

David, technically, most blogging income like AdSense is passive income. It just takes a lot of work to set it up!

D4L… That’s my plan!

Ron, I’m not too keen on $200,000 of credit card debt either. That just seems like too much work for me. But I am interested in increasing my passive income. I’m working on it!

Thanks for the comments, everyone.


7 Ron@TheWisdomJournal

Increasing my passive income has become something I’m keenly interested in this year, though the thoughts of having $200,000 in credit card debt scares the daylights out of me.

I’ll look for other ways ๐Ÿ˜€


8 My Dollar Plan

Wow, $4,100 is nice money for not so much work. It really is amazing isn’t it! Thanks for the link.


9 hank

Pinyo actually wrote a good post about alternative income streams that I thought of when reading this:

Congrats on the 4100! Good job!


10 Ryan

Thanks, Hank. I read Pinyo’s article. It’s a great reference… as usual! ๐Ÿ™‚


11 Scott

Earning passive income from savings and money market accounts is wonderful to watch grow. Teaching passive income opportunities to friends is the best reward. I really enjoy helping friends think outside the box and get creative. I even think earning free rounds of golf or finding ways to pay for hobbies are passive income opportunities.

Your blog is full of wonderful ideas for individuals and families. Great job!


12 MoneyEnergy

The target goals for me are about increasing yearly cashflow, which will include portfolio income as well as online income (which isn’t very passive, as we know). Last year I had about $1200 in this kind of passive income. This year is looking to be a lot better so far. But I need to keep spending levels down in order to make the most of it!


13 Blogging Banks

Wow $4100 is nothing to scoff at. Do you however have a more recent post about your 2008 passive income? Did you break through $5K?

That’s super inspiring..


14 Ryan

I haven’t completed my taxes this year; I filed an extension. I’m not sure if I broke it or not though, because the interest rates fell so much. I’ll have to look it up when I file. ๐Ÿ™‚


15 Smart Money

Passive income is my goal too. I’m aiming for greater than $100k per annum in passive income for retirement which I’m sure is achievable.


Leave a Comment

Previous post:

Next post: