Creating passive sources of income is one of the smartest financial moves that you can make. Not only do they provide you with an extra stream of revenue, but you earn the extra cash while putting in minimal effort. However, not all passive income sources are created equal. Some bring in higher returns, while some require a little more involvement than others. Well, if you are looking for places to invest some of your money in, here are the three best options.
Real estate has long been hailed as the passive investor’s ideal investment. It is beneficial in two main ways. First, as long as you have tenants in your properties, you are guaranteed a steady source of money. This should be enough to cover your mortgage repayments at the very least, but the chances are that you will be earning more than minimal returns. Secondly, real estate investments are always appreciated. Thus, even if you were to sell your properties, you can expect to make quite some profit on the sale. Commercial real estate typically brings higher returns than residential real estate investments, so you might consider it over buying homes. However, it also costs more to acquire commercial buildings than residential ones, so keep this in mind as you choose your investments.
One flipside of choosing real estate as your source of passive income is that it requires some involvement. You will need to look for tenants, keep the properties in good condition and pay property taxes and insurance premiums. If you don’t wish to be involved in the management of rental properties, consider joining Real Estate Investment Trusts, commonly known as REITs. These are commercial investment companies that specialize in buying, maintaining, and selling real property.
Here, you provide your initial investment and then await the dividends. If the company sells the property, you will also get part of the selling price, which is undoubtedly higher than your initial investment. And the best part is that you will never have to worry about tenants or property taxes.
Stocks are yet another popular passive income source. Dividend-paying stocks, however, are arguably the best kind of stocks to invest in.
For one thing, they provide reliable and steady income and are typically lower-risk than other forms of stocks. You can also sell your shares using automated trading platform, and you will almost always sell them for a profit.
To improve your chances of making good profits, consider investing in Dividend Aristocrats. These are companies that consistently prioritize their shareholders’ well-being and are continually growing from strength to strength.
Selling Online Courses
Most passive income sources typically require a substantial monetary investment. However, if you are low on cash, you can still earn extra income by creating online courses. The only investment you will need with these is time and effort.
Start by picking your area of expertise and then curating a course that imparts knowledge or skills to others. It is wise to pick a niche with high demand because you will not struggle to find a market. After creating your course, you can then sell it to websites within the niche or ask them to be your affiliate marketers.
Bonus Tip: Set Yourself Up For The Future
Setting up alternative passive income streams can help you build long-term wealth, but for this, you will need to combine long-term with short-term strategies, and high-risk with low-risk investments. If real estate is a high ROI, low-risk investment, it is also worth considering the potential of investing in cryptocurrency. Today, with platforms such as the Swyftx exchange, anyone can get started and build a base for future investments.
Earning a passive income can be your path to financial freedom and living the life you’ve always wanted. If you are looking for the best investments, consider real estate, dividend-paying stocks, and online courses. These are investments that could transform your financial life for the better.