Want to get 20% ROI on your investments?
We have four reliable strategies that have the potential to get you there (with 8 real examples, backed by data). Now I don’t mean one-shot deals. I am talking about steady investments where you can consistently earn over 20% ROI year after year.
Contrast that with the stock market.
You may get lucky for a year or two and get over a 20% return in a great year. But unless you are fantastically skilled at picking stocks, you are not going to be able to sustain that type of return over time.
So how can you generate over 20% ROI consistently?
You can get 20% ROI (or more) by (i) buying a cash-flowing blog, (ii) investing in real estate using debt to enhance your returns, (iii) purchasing a profitable absentee business (e.g., laundromats, FedEx routes, etc.) or (iv) buying high cash-flowing assets like vending machines and ATMs.
We’ll cover each of these strategies in detail (with real life examples), but if any of them resonate with you, you can skip ahead to that strategy by clicking on the corresponding link below.
- Buying a Profitable Blog
- Investing in Real Estate Using Leverage
- Purchasing a Passive Income Business (e.g., Laundromats, FedEx Routes, etc.)
- Buying an Alternative Income-Producing Asset (Vending Machines, ATMs, etc.)
We’ve got a lot to cover, so let’s get into it!
The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article. All investments carry some degree of risk and you are never guaranteed any returns.
Buy a Profitable Blog
Blogs are probably my favorite high-yielding passive income investment. The strategy is simple:
Buy an existing money-making blog and collect checks.
Starting a blog is a lot of hard work and it can take a long time to make money. I am not talking about that. You want to buy a blog that has all of the articles written and is producing steady cash flow. Doing this can be a perfect way to get passive income that produces a killer ROI.
ROI Analysis:
How good is the potential ROI? This table shows blogs that were for sale on Empire Flippers (a leading website for buying and selling online businesses) on the day that I wrote this article.
Take a look at the ROI column for these blogs!
|
Website Description |
Listing Price |
Annualized Cash Flow |
ROI |
|
Music/Electronics Blog |
$118,804 |
$35,640 |
29.9% |
|
Medical/Supplements Blog |
$154,700 |
$46,416 |
30.0% |
|
Culinary Blog |
$173,258 |
$41,580 |
23.9% |
|
Home Blog |
$201,584 |
$62,028 |
30.7% |
|
Crypto Blog |
$8,563,858 |
$1,868,484 |
21.8% |
|
Hobbies Sports Blog |
$39,435 |
$11,832 |
30.0% |
|
Home/Equipment Blog |
$40,463 |
$15,168 |
37.4% |
|
Home, Bed & Bath Blog |
$43,487 |
$11,858 |
27.2% |
|
Apparel & Accessories Blog |
$49,731 |
$14,208 |
28.5% |
|
Personal Care Blog |
$71,878 |
$17,256 |
24.0% |
The average ROI here works out to 28.3%! That’s pretty awesome for what will likely be an almost completely passive investment.
Note: I did not cherry-pick these listings. I just sorted the listings by selecting “display advertising” as the monetization channel. I then picked the first ten listings that came up.
You can, of course, go to Empire Flippers and do the same thing to get the latest data. You probably won’t get the same listings, but the ROIs should be in a similar range.
Of course, you can juice the returns even further if you choose to finance the purchase of your blog. Flippa.com (another popular online business marketplace) offers this option on their website.
Among the various online marketplaces, I really like Empire Flippers because they strike the perfect blend of high quality vetting (so you don’t see a bunch of scammy websites being sold) while still having a ton of profitable options to choose from.
They get a new batch of websites for sale each week (on Monday morning), so you can predictably see what’s new and jump on any great deals that are unveiled. I am an active user and love their service.
Want to learn more about buying a blog, including some of the key risks you need to address? Check out my article here:
Buying a Blog for Passive Income
If you don’t have the funds to buy and blog, but still want to learn more about how to get started, check out my article on How to Start a Blog From Scratch.
I cover all of the key areas you need to know, including how to set up your website and most importantly, my best tips for writing great articles, getting traffic to your blog, and monetizing that traffic.
Now buying a money making blog can be expensive (especially if you want one that makes real money), so if you want a nice middle option, you can hire a service to create a website for you. Make Lemonade is a UK based firm that specializes in this.
I have used their content writing service to help me expand my blogs when I was running short on time, but they do offer a full service model, where they will create your website for you from start to finish and include content that has gone through their rigorous keyword research process.
Check them out here if you want to learn more.
Invest in Real Estate Using Leverage
Investing in real estate can be a great way to achieve outstanding profits, especially if you use debt to magnify your returns. I own nine rental properties and this form of investing allowed me to make my first million.
It is a tried and true path toward wealth.
ROI Analysis:
Let’s take an example of how you can use real estate to make over a 20% ROI:
Sally has $15,000.
She buys a rental property worth $100,000. In today’s market, you can finance a rental property with just 15% down, so that’s what she does.
Note: you should have a bit of money set aside for repairs and such, but I want to keep this example simple.
If we assume she can get an interest rate of 3.5% on a 30 year mortgage (which was the market rate when I wrote this) and an annual appreciation rate of 3.7% (which is the appreciation rate of homes over the past 20 years), then after 10 years, we see the following results:
Property Value: $143,809
Loan Amount: $65,813
Equity: $77,996 (we began with $15,000 of equity due to down payment)
Annualized ROI: 17.9%
It gets better. That ROI does not take into account the “cash flow” that Sally has received during the year. “Cash flow” means rent minus expenses (such as mortgage, insurance, taxes, etc.). Cash flow varies, but my properties tend to cash flow between $100 and $200 per month.
Let’s take the average and say she makes $150 in cash flow per month. That equals $1,800 per year and $18,000 over 10 years.
If you add that $18,000 of cash flow to the mix, you get an annualized return of 20.4%.
That return would be even higher if she had invested that $18,000 in cash flow over the years, but I think you get the point.
What’s even better is that rental properties are generally very stable investments and can be semi-passive investments. For that reason, many people hold on to their rentals for decades. It’s a terrific way to generate high returns over the long term, without huge stress or massive effort.
If you want to learn more, check out my article on how to get started investing in rental properties.
Purchase a Passive Income Business
Another great way to generate 20% ROI or better is by buying a passive income business. Here are some options you can explore:
Laundromats
Laundromats can yield returns that easily clear 20%. On top of that, they can be operated in a mostly passive way.
After all, the machines are doing the hard work of washing and drying the clothes (with your customers doing the work of loading and unloading the clothes).
The process is mostly automated, but not completely. There are things you will need to do to successfully run this business as an absentee owner. If you want to learn how to do this, check out my article about starting a laundromat in six easy steps.
ROI Analysis:
So what type of ROI can you get from laundromats? Let’s take a sample of laundromats from bizbuysell.com (one of the leading online websites for buying and selling businesses) and find out.
|
Description of Laundromat |
Price |
Cash Flow |
ROI |
|
Phoenix Laundromat (Semi-Absentee Owner) |
$220,000 |
$60,000 |
27.2% |
|
Kings County (NY) Laundromat (With Staff) |
$250,000 |
$150,000 |
60% |
|
Queens County (NY) Laundromat |
$175,000 |
$100,000 |
57.1% |
|
Brooklyn Laundromat (with new machines) |
$650,000 |
$231,120 |
35.5% |
|
Two location Texas Laundromats |
$1,000,000 |
$260,930 |
26% |
|
Rhode Island Laundromat |
$325,000 |
$65,000 |
20% |
|
Brooklyn Laundromat (121 machines!) |
$699,000 |
$241,789 |
34.6% |
|
Philadelphia Laundromat (Hi-Tech) |
$586,000 |
$198,000 |
33.7% |
|
Cleveland Laundromat (Semi-Absentee Owner) |
$585,000 |
$197,000 |
33.6% |
|
Denver Laundromat (Hi-Tech) |
$695,000 |
$196,950 |
28.3% |
The ROI averages out to 29.6%. As with other examples I provide, you can go to bizbuysell.com and confirm this. Just eyeballing the listings should give you a pretty good sense of what type of returns laundromats can offer.
FedEx Routes
Did you know that you could buy a FedEx delivery route?
It can be a highly profitable business and, if you structure it right, it can generate passive income that can exceed a 20% ROI. The business is very simple. You get a bunch of packages from FedEx each morning. Your job is to deliver those packages to locations within your territory.
The great thing is that your discrete little piece of the FedEx delivery process is easily outsourced.
In fact, most owners do this. They usually own many routes, so they are not driving a truck and making deliveries. They hire drivers and put in place managers that oversee the deliveries. Once you have good managers and reliable drivers in place, the day-to-day operations of this business can be run without your involvement.
If you want to learn more about this business, check out my beginner’s guide to owning FedEx routes for passive income.
ROI Analysis:
So how good are the returns of a FedEx delivery business?
Let’s take a look. The information is from bizbuysell.com.
|
Description of FedEx Route |
Price |
Cash Flow |
ROI |
|
6 FedEx Routes – Meridian, MS |
$650,000 |
$155,000 |
23.8% |
|
7-11 FedEx P&D Routes – North Carolina (full time manager) |
$1,175,000 |
$279,156 |
23.7% |
|
8-12 FedEx P&D Routes – North Carolina (full-time manager) |
$1,485,000 |
$370,240 |
24.9% |
|
18 FedEx P&D Routes – North Tampa (2 managers) |
$1,900,000 |
$475,000 |
25.0% |
|
6 FedEx P&D Routes – McComb, MS |
$600,000 |
$139,811 |
23.3% |
|
5 FedEx P&D Routes – Knoxville, TN |
$425,000 |
$91,181 |
21.4% |
|
6 FedEx P&D Routes – Rapid City, SD |
$495,000 |
$109,984 |
22.2% |
|
20 FedEx Routes – Wenatchee/Omak, WA (full time manager) |
$1,549,000 |
$514,313 |
33.2% |
|
12 FedEx P&D Routes – Alabama |
$950,000 |
$300,404 |
31.6% |
|
FedEx Line-Haul – Sacramento, CA |
$1,250,000 |
$398,000 |
31.8% |
The average ROI for these FedEx routes is 26.1%.
What I love about this option is that you get to partner with a massive company like FedEx and get all of the benefits of their branding, marketing, and infrastructure.
You don’t need to worry about getting customers, staving off competition, or really anything else that most business owners stress over. All you need to do is make sure the deliveries get done on time everyday.
Bread Routes
Like a FedEx route, you can buy a bread route that covers a territory.
Once you own that territory, you can sell bread to various retailers and pocket a commission for each sale. Best of all, you can have drivers run these routes for you and operate this as an absentee-run business.
To discover more about this business, read my article on buying bread routes for passive income.
ROI Analysis:
Now let’s get down to the ROI.
Here are bread routes that I found on Routesforsale.net. There are a bunch of other places where they sell bread routes (and for different brands), but I just used this site because it had a large selection of routes.
|
Description of Bread Route |
Price |
Cash Flow |
ROI |
|
Arnold & Bimbo Bread – Blythe, CA |
$104,000 |
$58,552 |
56.3% |
|
Arnold & Bimbo Bread – New London County, CT |
$115,000 |
$71,330 |
62.0% |
|
Arnold & Bimbo Bread – Sebring, FL |
$220,000 |
$90,222 |
41.0% |
|
Arnold & Bimbo Bread – Daytona Beach, FL |
$177,000 |
$78,992 |
44.6% |
|
Arnold & Bimbo Bread – Atlanta, GA |
$200,000 |
$74,908 |
37.4% |
|
Arnold & Bimbo Bread – Dalton, GA |
$131,500 |
$66,971 |
50.9% |
|
Arnold & Bimbo Bread – Buford, GA |
$299,000 |
$129,011 |
43,1% |
|
Arnold & Bimbo Bread – Perry GA |
$199,000 |
$74,308 |
37.3% |
|
Arnold & Bimbo Bread – Coffee County, GA |
$209,000 |
$120,796 |
57.7% |
|
Arnold & Bimbo Bread – Gilmer County, GA |
$120,000 |
$59,488 |
49.5% |
The average ROI for these bread routes is a whopping 46.0%!
Now, you should temper your expectations here because most of these routes are likely operated by the owner. If you want a more passive income source, you will have to hire drivers to run the routes. Of course, in that case, the ROIs will go down, but you should still have a lot of room to play with.
Other Passive Income Business Ideas
To keep this article to a manageable length, I focused on only three passive income businesses, but there are a host of other options that you can explore.
If you want to look at some more ideas, I have written in-depth articles on the following businesses:
Self Storage Businesses: Start a Passive Self Storage Business in 7 Easy Steps
Automatic Car Washes: Beginner’s Guide to Passive Income Automatic Car Washes
Bounce Houses: How to Start a Bounce House Business in 4 Easy Steps
Buy Alternative Income-Producing Assets
If you don’t have the money to buy an entire business, you can piecemeal it.
What I mean is that you can start buying income-producing assets that can eventually turn into a real passive income business. I am talking about things like vending machines, ATM machines, and even cars.
You can start by buying one of these items, making a little money from it, using that money to buy more assets, and continuing until you have built an empire.
What’s great is that the ROI for even a single item is well over 20%. Let check it out!
Vending Machines
Owning a vending machine can be a great passive income source.
You just place it in a high-traffic location and make money every time someone buys something from your machine. The cost to get started varies, with a simple gumball machine costing only around $200 to a more expensive vending machine running between $3,000 to $5,000.
Still, that’s far less expensive than buying an entire business and it’s a terrific way to start generating some stellar ROI.
The only part of this that requires some work is restocking and collecting money from the machine, but you can easily outsource this function.
For more details on this business, check out my beginner’s guide on how to start a vending machine route for passive income.
ROI Analysis:
I could not find a lot of great data to analyze the ROI of a single vending machine. But I did find some solid data on vending machines businesses.
As with other examples, I searched bizbuysell.com for vending machine businesses and selected a representative sample.
|
Description of Vending Machine Route |
Price |
Cash Flow |
ROI |
|
Cape Cod Vending Business (8 machines) |
$27,000 |
$9,943 |
36.8% |
|
Texas Vending Business (7 machines) |
$60,000 |
$10,976 |
18.2% |
|
Maryland Vending Business (132 machines) |
$125,000 |
$74,414 |
59.5% |
|
Portland Vending Business (12 machines) |
$125,250 |
$147,500 |
117.7% |
|
Texas Vending Business (8 machines) |
$15,000 |
$6,645 |
44.3% |
|
Tampa Vending Business (10 machines) |
$120,000 |
$60,000 |
50.0% |
|
Florida Vending Business (2 employees) |
$250,000 |
$85,070 |
34.0% |
|
Los Angeles Vending Business (120 machines) |
$180,000 |
$69,000 |
38.3% |
|
Entire University Vending Route (26 machines) |
$65,000 |
$35,000 |
53.8% |
|
Silicon Valley Vending Route (31 machines) |
$149,000 |
$60,000 |
40.2% |
The average ROI of these vending machines routes is 49.2%.
As with bread routes, most of these businesses probably have the owners running the routes. If you want a more passive operation, you will need to hire employees to run the routes for you and that will eat into the ROI.
ATM Machines
Like vending machines, this type of business involves placing ATMs in high traffic areas and receiving a fee every time someone makes a withdrawal.
You can get started on a pretty small budget, though. The average new ATM costs between $2,300 to $3,000.
What’s great about ATMs is that they are even simpler to operate than a vending machine route. You don’t have to worry about buying 17 different types of snacks and drinks and lugging them around in your van. There is only one type of inventory you need: cash.
Fortunately, there are services that can restock your ATMs with cash for a fee.
Interested in finding out more? Check out my beginner’s guide to ATMs for Passive Income.
ROI Analysis:
Unlike vending machines, it’s pretty easy to figure out the ROI on a single ATM Machine because there’s some good data to work with.
Average Cost: $3,000 (I chose the higher end of the scale to be conservative)
Average ATM Surcharge: $3.00 per transaction
Average Number of Transactions/Month: 180
Monthly Gross Revenue: $540/month (multiply ATM surcharge by number of monthly transactions)
Annual Gross Revenue: $6,480/year (monthly gross revenue of $540 times 12)
So, if you take the annual gross revenue of $6,480 and divide it by the cost of the ATM ($3,000), you get an ROI of over 216%!
Now there will be additional costs you have to deduct from your gross revenue, including possible revenue sharing with the owner of the location where you placed the ATM, but those costs will be far less than 50% of your gross revenue. So if you cut your ROI in half, that still gives you over a 100% ROI.
This is type of ROI is supported by information from companies in the ATM industry. According to Liebermann Companies, you may be able to make your money back on an ATM within 6 months of buying, which equals a 200% ROI.
Cars
This is a pretty cool one.
You can rent out your car on Turo.com and make great passive income. One option is to use your existing car and rent it out when you don’t need it (perhaps on the weekends).
In that case, your ROI is basically infinite.
But you can also buy a car just for this purpose and rent it out. This a legitimate business model and there are people who own fleets of cars and rent them out through Turo.
ROI Analysis:
Turo has a tool called the Carculator, which allows you to type in the year, make and model of your car. The Carculator will then give you an estimate of how much you can make renting out that car on Turo. I love these types of tools because they give you amazing data!
I typed in a 2017 Toyota Prius Three Touring and the Carculator indicated that I could earn $388 per month.
That works out to $4,656 per year.
I then hopped onto cargurus and searched for a Toyota with that same year and model. They all seemed to hover around the $19,000 range. So if you take $4,656 and divide it by $19,000, you get a potential ROI of 24.5%.
Now I just randomly typed in a year, make and model for this example. But you may want to play around with the Carculator and type in different car models to see what you can earn. I have no doubt that you can find car models that can generate better ROIs.
Conclusion
So there you have it – some great strategies to consistently earn potentially 20% ROI or more.
Hope you can find one that works for you. Happy investing!
