Below are seven income producing assets that you can invest in to start earning you passive income.
I’ve split the listing up into two ways: Safe and risky. The former are assets I consider to be more conservative and proven that you can start investing in. The latter are a bit more aggressive — but can yield great outcomes if done right.
Safe income producing assets to invest in
These are conservative, low-risk income producing assets. The trade-off to its low volatility though is that you won’t earn as much as more aggressive assets. It’s still a good idea to have a few of these in your portfolio to ensure proper diversification.
Asset# 1: Certifications of Deposit( CDs)
A certificate of deposit, or Cd, is a low-risk financial investment offered by banks.
How they work is simple: You loan the bank money for a define quantity of time known as a “term length” and you gain interest on the principal during this time.
A typical term length is anywhere from three months to five years. During this time, you won’t be able to withdraw your money without taking a penalty hit. BUT it’s pretty much assured that your fund is increasing at a fixed rate.
The interest rate varies on how long you are willing to invest for. The longer you loan fund to the bank, though, the more you are able to earn.
And since Cds are insured by the FDIC up to $250,000, they’re unbelievably low risk.
But there are a few drawbacks 😛 TAGEND
Inflation. The median inflation rate in the U.S. over the past 60 years is 3. 7% — which stands on the high aim for most Cd interest rates. This means you can actually lose fund if you keep your money in CDs because of inflation.
Low aggressiveness. If you’re young, that means you can stand to be a lot more aggressive with your investments( because you have more time to recover from any losses ). Your possibilities for growth is much higher. This allows you more wiggle room to invest in riskier assets and potentially earn more fund.
Length of investment. You might not be able to part with your cash for a long time — especially if you have other fiscal goals in the near future( buying a home, vacation, weddings, etc .).
If you want a low-risk investment that ensures you peace of mind, CDs might be for you.
Asset# 2: Bonds
Much like Cds, bonds are like IOUs. Except instead of dedicating it to a bank, you’re lending money to the government or firm.
And they work similarly to CDs as well — which means they’re 😛 TAGEND
Extremely stable. You’ll know exactly how much you’ll get back when you invest in a bond.
Guaranteed a return. You can even choice the amount you want a bond for( one year, two years, five years, etc .).
Smaller in their returns, especially when compared with aggressive investments like stocks.
If you want to know exactly how much you’re getting back, bonds are a great investment.
For more check out our article on bonds here.
Asset# 3: Real estate investment trust( REITs)
The U.S. Congress established real estate investment trusts, or REITs, in 1960 to give people the opportunity to invest in income creating real estate.
They’re a fantastic option if you want to get involved with real estate expending but don’t want to construct the commitment of buy or financing property. Like with most blue-chip stocks( more on those later ), REITs pay out in dividends.
REITs also focus on a variety of different industries, both domestic and international. You can invest in REITs that build apartments, business builds, or even healthcare facilities.
In all, they are a straightforward style to get involved with real estate without having to eat the upfront cost of buying property. To get started, go to your online broker and buy a REIT like you would a typical investment.
If you don’t know how to do that, that’s okay! Check out our article on mutual funds to find out exactly how you are able to open one.
Risky income producing assets
The following are riskier investments that might involve more active management on your component. The earning possibilities for these investments is high. If you set the time and endeavour into these assets, you might find yourself with a nice sum of money to prove for it.
Asset# 4: Dividend yielding stocks
Some companies pay out earnings to their shareholders each quarter via dividends. These are known as “blue-chip stocks” and are likely to reliable and able to climate most economic downturns.
Many investors like to add a few dividend paying securities via blue-chip stocks in their portfolio to ensure that they receive earnings consistently throughout the year. And while some are happy to hand pick individual shares to invest in, you can get started by investing in indicator funds that specialize in high-yielding dividends.
A few suggestions below 😛 TAGEND
Asset# 5: Property rentals
Renting out property seems simple enough:
Buy a home or apartment building. Rent out the rooms to renters for a nominal fee. The rental checks come in like gangbusters each month while you sip pina coladas and make passive income.
Hell, that DOES sound awesome — but it’s also a complete oversimplification. In fact, renting out property is anything but relaxing. That’s because you’re responsible for all facets of the building you’re renting out as the owner. That includes repairs, upkeep, and chasing down renters who don’t pay you rent.
And god help you if they do miss a rent payment. If that happens, you’ll have to find another way to pay your monthly mortgage payment.
You CAN make money from renting out properties( many people do !). It’s merely that doing so can negatively affect your finances in a BIG way. Check out our house poor article for a good example of that.
If you’re interested in purchase properties to rent out, be sure to check out our article on buying a home for more.
Luckily, with the rise of services like Airbnb, you are able to only rent out a spare room in your house and not worry about buying a separate apartment division. You simply sign up for the platform and take advantage of short-term rentals. You’ll still have to deal with certain pains of property management but you’ll be able to leveraging property you already own( e.g ., spare bedroom in your home ).
Asset# 6: Peer-to-peer lending
Also known as “crowdlending, ” peer-to-peer( P2P) lending allows investors to essentially act like a bank. You loan fund to others via a peer-to-peer lending platform( such as Lending Club ), and later they pay you the money back with interest.
Unlike a bank though, the person seeking the loan doesn’t have to deal with financial background checks or incredibly high interest rates due to things like bad credit history.
P2P lending isn’t without dangers though. In fact, relying on someone with crappy credit to pay back a loan might be one of the riskiest fiscal investments you stimulate. But if you’re willing to devote yourself more to learning about the platform and use fund you don’t mind losing, it could be a very fruitful financial investment.
Asset# 7: Generating your own product
This is one of my favorite ways to make money. Not only is it low cost but it’s also easily scalable — entailing the sky’s the limit for your earning potential.
And you don’t require engineering or carpentry abilities to generate your own product either. In fact, you probably use products every day that you can create too 😛 TAGEND
E-books Online courses Podcasts Webinars Whatever!
These digital information products are perfect ways to earn money without sacrificing overhead.
BUT they come at a cost: Your time and energy. Not merely do you actually have to create the product, you also have to make sure that the product will sell.
That’s why we’ve devoted our sister site, GrowthLab, to helping entrepreneurs generate, grow, and scale their businesses. Check out the site today for more information on how you can get started with information products too.
Earned more fund today
Income producing assets are a great way to supplement your income through your investments.
If you want to learn how to make even more money, my team and I have worked hard to create a guide to help you earn more today 😛 TAGEND
The Ultimate Guide to Attaining Money
In it, I’ve included my best strategies to 😛 TAGEND
Create multiple income streams so you always have a consistent source of revenue.
Start your own business and escape the 9-to-5 for good.
Increase your income by thousands of dollars a year through side hustles like freelancing.
Download a FREE copy of the Ultimate Guide today by entering your name and email below — and start earning more today.
Read more: iwillteachyoutoberich.com