If you've ever wondered how to start building passive income without a huge bank account, you're not alone. In a value-packed YouTube video, Toby Mathis, Esq.—a seasoned tax attorney and author of Infinity Investing—shares realistic ways you can begin earning income in your sleep, starting with just $1,000.
Here are seven of his top tips:
1. Start with Dividend Stocks
Dividend-paying stocks are a favorite of long-term investors for a reason. Especially strong are:
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Dividend Aristocrats – companies that have increased their dividend for at least 25 consecutive years.
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Dividend Kings – those with 50+ years of growing dividend payments.
Even a $1,000 investment can start generating income—say, $50/year—that grows year over year through compounding.
💡 Simplified Option: Don’t want to pick individual stocks? Try high-dividend ETFs like:
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Vanguard’s VYM
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Schwab’s SCHD
These typically pay ~4% annual yields plus potential for growth.
2. Add Covered Call Strategies
Want to supercharge your dividend income? Add covered calls—selling options on stocks you own. This strategy earns you rent on your stock portfolio by letting others pay to buy your shares at a premium.
Toby calls this being a “stock landlord.”
👉 For a deeper dive, check out his book: Infinity Investing.
3. Try Peer-to-Peer Lending
Platforms like Prosper and Groundfloor let you loan small amounts to many borrowers. You can spread $1,000 across dozens of microloans and earn returns averaging 11% or more.
⚠️ Note: This strategy is less liquid than stocks. You may need to wait months or years for full repayment.
4. Leverage with Caution
If you're financially disciplined, using a line of credit or HELOC to fund investments might make sense—but only if you can repay it within 6 months. High interest debt can erase all your gains if not handled quickly.
💡 Only consider this if you have consistent cash flow and a strong repayment plan.
5. Invest in Real Estate Investment Trusts (REITs)
Can’t afford to buy a rental property? No problem. REITs are shares of real estate portfolios that pay consistent dividends.
Top picks include:
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Federal Realty Trust (FRT)
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Public Storage (PSA)
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Realty Income (O)
These often pay 4–5% yields and offer exposure to physical real estate markets.
🧠REIT ETFs like Vanguard’s VNQ or Schwab’s SCHD provide broad exposure and diversification.
6. Bonus Strategy: Build a Subscription-Based Business
Got a hobby or expertise? Start a YouTube channel, sell online courses, or build a community membership.
📈 Example: Just 1,000 people paying you $25/month = $25,000/month in recurring income!
Toby has seen people turn:
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Lesson plans for librarians
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Coaching playbooks
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Felting tutorials
...into six- and seven-figure businesses simply by sharing what they love.
7. Final Advice: Passive Income Is a Mindset Shift
Stop trading time for money. Instead, build scalable, repeatable systems that generate income—whether you’re working, relaxing, or sleeping.
✅ Start small
✅ Stay consistent
✅ Reinvest and let compounding work its magic
⚠️ Important Disclaimer
Investing involves risk. Nothing is guaranteed. You could lose some or all of your money. I am not a financial advisor, and this is not financial advice—just educational information.
Always do your own due diligence.
💬 Want Toby Mathis’s Free Book?
Go to the comments section of his YouTube video and type: “free ebook” to get a copy of Infinity Investing.
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