Mailbox money is the ultimate way to build wealth. It’s passive income that will appear in your mailbox, with little or no effort. But where did this term come from and why is it making a comeback? And what are the best ways to generate mailbox money? Let’s find out below in the complete guide to passive income streams, also known as Mailbox Money.
What is Mailbox Money?
Mailbox Money is an old term for “passive income” which means getting checks in the mail without much effort.
The term “Mailbox Money” is now used to describe various forms of “passive income”. And it is important in achieving “financial freedom.” But not all forms of Mailbox Money are 100% passive. They need active, upfront work to potentially generate passive income in the future.
But the power of generating that passive income stream is phenomenal. Building a Warren Buffett-style snowball can grow and generate money while you sleep. That is the dream, and checks appearing in your mailbox or email, make the world an amazing place.
That is Mailbox Money.
What is the Meaning of Mailbox Money
Mailbox Money is another way of describing “passive income”, which used to mean getting a check in the mail for work or effort you have already completed.
The meaning of Mailbox Money has changed over the years. The term was made popular by songwriters who would write songs for an ongoing paycheck. If a song became a big hit, they would receive royalties on album sales. They would get ongoing royalties for radio plays and licensing deals for commercials and usage of the song.
Examples of Mailbox Money
Outlaw country songwriters like Johnny Bush made it big in the 1970s after writing a song that Willie Nelson later recorded and put on his album Shotgun Willie. That effort paid off and generated mailbox money for the songwriter, as documented in an article by Texas Monthly, highlighted in his own words below.
“And all the mailbox money off that has been great. I get the publishing check every six months, for sales. And then every ninety days I get the BMI check, for when the song gets played on the radio. That money saved me through the spasmodic dysphonia years.”
Johnny Bush
This old term is getting more popular, with rap stars like Nipsey Hussle bringing it into the mainstream. Nipsey discovered the idea of “Mailbox Money” from an article that described passive income and equity. He wrote an album called Mailbox Money and self-released it in 2014. He sold 100 copies for $1000 each alongside other merchandise that generated revenue for the artist.
For Nipsey, the reasoning behind Mailbox Money is the importance of independence. It represents “the ownership he has over his career as an independent artist”. He admits that the process of generating mailbox money can take time, but it lets you “eat the apple off your own tree”. Implying that by doing the hard work himself, and bypassing a record company, he received most of the profits and he was working for himself.
And even more recently, the famous singer and songwriter Jimmy Buffett says it best in his song mailbox money, released in 2020.
“The postman starts his outboard
Jimmy Buffett
‘Cause we get our mail by boat
That song I penned in ’81 still keeps our world afloat.
If it wasn’t for the radio and those Parrot-headed fans
I’d have to get a day gig, which would surely spoil my plans”
Mailbox Money is all about working hard, setting up those income streams, and then letting that passive income roll in. And if you can avoid a “day gig” as Jimmy Buffett suggests, you’ve achieved financial freedom and you can enjoy your life.
Active VS Passive Income Streams
To understand mailbox money, we should look at the difference between active and passive income streams. And how that relates to the world of mailbox money.
Active Income Streams
Active Income is defined as working a job and getting paid for your effort on an hourly basis. Your time generates money for a company. And in turn, that company pays you a salary.
Passive Income Streams
Passive Income is money you receive for something you own, that generates money. For example, an investment in a dividend-producing company. This example of passive income is 100% passive and ideal for most people.
Other forms of passive income are not 100% passive and require effort to set up. For example, writing a song, or creating a blog or YouTube channel. If successful, this work could generate ongoing passive income and the potential for these income streams is huge and can be very lucrative.
The greatest superpower of mailbox money, and passive income is that there is no limit. You can have multiple revenue streams all spewing cash. And this can be the ultimate way to escape a “day gig” and live your life financially free.
Let’s take a look at various ways to generate Mailbox Money.
How to Make Mailbox Money
There are many ways to make mailbox money and there is no limit on how many revenue streams can be set up. It’s important to note, not all forms of passive income are 100% passive. This means that some forms of passive income will require hard work to set up and maintain. While some options are more “set and forget” but can take longer to bear fruit. Let’s take a closer look at these.
Investments
Investments are the perfect way to generate passive income. The level of skill and effort required varies on the investment. The weapon of choice for most investors is an ETF, but let’s take a look at all the options available that may be worth your time.
| Dividend Paying Stocks: | An Exchange Traded Fund (ETF) is the most popular way to invest for passive income and generate income. Warren Buffet, the world’s greatest stock investor says index funds make the best retirement sense. He believes you should “consistently buy an S&P 500 low-cost index fund”. An ETF such as the S&P 500 is an index that tracks the performance of the top 500 companies listed on the US Stock Exchange. Investing in the S&P is a low-cost, low-risk investment over the long term. This is great advice from Buffett, but any dividend-paying stock is perfect in this scenario. |
| Bonds and Treasury Securities | Bonds and treasury securities are a great way to lock away some money for a set amount of time to generate passive income. This can be achieved by purchasing bonds or treasuries directly, or by investing in mutual funds or ETFs. This method of generating mailbox money is often overlooked. Investing in bonds is a little more complicated than investing in basic indexed ETFs. However, it’s possible to generate some nice checks in the mail. |
| Real estate investments (REITs) | REITs are real estate investment trusts that are companies that own or finance income-producing real estate across various property sectors. REITs can be seen as risky because they are influenced by economic conditions and interest rates. And it’s worth getting investment advice on REITs before making any investments. REITs can be purchased via publicly traded funds, mutual funds, or ETFs. The average investor may be more comfortable sticking with Indexed ETFs, but REITs can provide some great opportunities for more advanced investors. |
Royalties and Licensing
It’s possible to turn your active, creative endeavors into passive money machines. Music or book royalties can be lucrative for those lucky enough to write something that hits the mainstream. Let’s take a look at what is possible.
| Music Royalties | There are various ways to make music royalties. And it’s not impossible to make some mailbox money by having your music played or sold on physical media. With a decent-sized fanbase, musicians can make a steady stream of income from engaged and excited fans. And if your music makes it big, you can get performance royalties for your song playing on the radio. Or streaming royalties from streaming services like Spotify. However, it is estimated that each stream generates $0.003 per song played. This means you need many streams to see any benefit. But that’s ok because some songs can generate royalties forever. Take a look at Mariah Carey’s Christmas song All I Want for Christmas Is You? That song makes $3 Million every single year. And it has made more than $60 Million in profit over the years. This is unbelievable. Music royalties can be a fantastic source of mailbox money. Talented musicians, with a little luck, can develop a devoted audience. And with their support, this income stream could generate mailbox money, like Nipsey Hussle did. |
| Book Royalties | In the internet age, anyone can write a book and share it with the world. And that means book royalties are possible for any budding author. Book publishers are no longer the gatekeepers to the book publishing industry. Twilight Fan-fiction written by an “amateur” became the multi-million-selling series Fifty Shades of Grey. Using services like Amazon Kindle Direct Publishing can generate 60% royalties on the book’s earnings. And like music royalties, all that is required is a loyal fanbase and a few great books. And like 50 Shades of Grey, any book creates valuable Intellectual Property (IP) and that can lead to other licensing for movies or TV. The effort to write a book can compound, and like like a passive investment, it can generate ongoing mailbox money. |
Online Ventures
With so many people online, selling products and services online, it’s a fantastic way to generate passive income. Online ventures are cheap and easy to start and they can make mailbox money if successful. Let’s take a look at the best options.
| Affiliate Marketing | By starting an online blog, affiliate marketing is a great way to generate passive income. This can be achieved by writing a great blog post about a product or service you like. And then, simply add a link on the review so that readers can buy the product via an affiliate program. The most common affiliate program is the Amazon affiliates program. If a customer clicks an affiliate link from your site and makes a sale, you will earn a commission. The commission rate ranges from 1% to 20%, depending on the product category. The amazing thing is, if that customer buys other items in the process, you get a commission on that item too. To be successful in affiliate marketing, you will need a blog that has a decent amount of web traffic. The Industry average click-through rate is small (1.9%). So you will need a lot of traffic to convert those clicks into a sale. This form of passive income requires some real work to get started, but it can pay off in the end. |
| Digital Merchandise Sales | Internet trends are your friend when it comes to creating digital merchandise. Stickers, t-shirts, and coffee mugs can be designed and sold online through various online platforms like Amazon, Red Bubble, and Tee Spring. And if the design is “evergreen” it can sell month after month and generate serious money for years. Creating digital merchandise can be a lot of fun. By selecting a visual niche and creating digital images to slap on various products, it is a fun creative outlet. Especially when consumers respond to designs and the sales roll in. Non-creative types do not be alarmed, you don’t need a degree in fine art to design anything. Many of the best-selling t-shirts or products on these platforms are interesting or funny phrases that are text only. So it is possible to get creative and get involved in digital merchandise sales. |
| Membership Sites | If you are a teacher or an expert in a specific field, you can create a membership site to generate passive income. For example, a finance expert may sell access to their stock tips through a membership site. Or a Jazz Guitarist could sell access to online lessons through a membership site. Expertise in any field can be put online and sold through a membership site. However, this does require hard work up front to put together. It may also need ongoing updates and customer support. But if it is in a niche you are passionate about, it’s a fantastic opportunity to build a loyal audience and generate passive income. |
Creative Ventures
Share your creativity across the globe because every human being is a mouse click away. This is fantastic for creative ventures such as writing or anything art-related. The potential audience for your work is now in the millions. Let’s take a look at a few options to generate the sweet, sweet cash.
| Writing Gigs | The internet has opened up the ability to generate passive income for everyone. It’s simple to start a blog, put some advertisements on it and you can generate mailbox money. Write enough blog posts that help people and you can make some great money. It’s also possible to sell your writing skills to others, through sites like Fiver or Upwork. Online content generation is a booming business, and it’s a nice way to generate some extra income on the side while you pursue other mailbox revenue streams. |
| Photography Sales | Most people have a camera phone in their back pocket at all times. And these modern marvels produce some unbelievable photos. Rather than snapping pics and sharing them with your friends on your socials, it’s possible to sell images and photos online for 15-45% commissions. Sites like iStockPhoto and Shutterstock make it easy to upload and sell your photos online. This field can be competitive but if you love taking photos, it could be a great way to build a following and it is a worthy venture for serial snappers. |
Benefits of Mailbox Money
Mailbox money is a powerful idea, that can translate into a life-changing reality. Those extra dollars trickling in may seem trivial at first. But those dollars slowly add up, and compound over time. Those hours of effort will also compound and ultimately be your ticket to escape the rat race.
Setting up various income streams can produce financial stability, security, and freedom. And there is no greater feeling than when that passive income hits your bank account. It’s amazing. And those income streams can continue to grow and there is no limit to how big it can go.
Challenges and Considerations
The biggest challenge and consideration in setting up a passive income stream is the initial investment and time commitment. There is no guarantee for success, and it can take 1-2 years to see any results on some of these passive income ideas. Those initial years can be difficult and frustrating.
Managing and maintaining income streams that are not 100% passive can wear you down. If you are working a 9-5 job and have family, friends, and a social life, you need time to manage these things. So you may not have the time to build an income stream that needs some serious, upfront dedication.
We are all human and have limits. Passive Income is a fantastic idea, but most forms of passive income aren’t very passive. But what is the best way to achieve financial freedom with the help of mailbox money? Let’s take a look at the Mailbox Recommendation.
Mailbox Money Recommendation
There are various ways to build up revenue streams to generate mailbox money. And unless you are interested in spending time and money setting up extra revenue streams, the simplest way is usually the best.
Primary Passive Income stream (100% Passive)
Start with a Primary Passive Income stream. This will generate Mailbox money without any additional work. This means investing in an indexed ETF over a long period of time. Re-invest the dividends and let the compounding do the hard work for you.
This method of investing is recommended for time-poor, set-and-forget investors. And it has been recommended by Warren Buffett, Morgan Housel, Rick Rule, and many other high-profile investors.
The trick here is to invest as much as you can, over time and “dollar cost average” into your favorite ETF funds. Just keep it simple and keep investing over a long period of time.
It’s also worth finding other forms of income that are 100% passive. Such as renting out space or storage options. You can read my Spacer review where I have made over $3500 in 4 years just renting a spare car spot.
Secondary Passive Income Stream (Not 100% Passive)
Any artist, blogger, or musician can achieve something special through a secondary income stream.
Choose something you love and are passionate about. Make sure it is something that you enjoy the process of creating or writing about it. That passion will see you through the long hours spent working in your spare time. Creating something special to share with the world.
That passion will show in your work, and it will make your work special and stand out. Do it your way, enjoy the process and amazing things will happen. It will be a fulfilling experience and hopefully, you will reach like-minded people who will love what you do. And they will happily spend money on whatever you have lovingly crafted for the world to see.
And those dollars rolling in while you sleep will make it all worth it.
Final Thoughts
Mailbox Money is an essential part of achieving financial freedom. Building revenue streams that generate money with little or no effort is a fantastic way to escape the rat race.
The simplest, and most popular way to generate mailbox money is through an income stream that is 100% passive. This can be achieved by investing in indexed ETFs and then re-investing the dividends. Over time, that income will grow exponentially and you will receive bigger and bigger checks in the mail.
Setting up a secondary stream of income that is not 100% passive is a fantastic way to turbocharge your mailbox money. This is best achieved by following a passion while learning new skills, and enjoying the process.
There is a passive income stream that suits everyone. Hopefully, this guide provides a few ideas on how to get started with passive income streams. And it shows that mailbox money is achievable, transformative, and essential in achieving financial freedom.
Let me know what you think in the comments below.
M. Moneyman
