You may have been reading a lot of articles recently about how to generate passive income. It is a hot trend lately as there seem to be multiple ways of going about it. The best way, however, is in simply investing your money.
But, there are so many different ways to invest and not all of them are going to be providing income early on. Retirement funds like IRAs or 401ks Are not going to do much as far as giving you passive income. You need to focus on income generating investments so you can actually enjoy the fruits of your wise investments.
In this article, I will go over some of the types of investing that will put money in your pocket right away so you can enjoy the passive income it provides.
One of the best ways to see income from an investment is by buying stocks. It is a bit of a risk as you can also lose money, but with the right stock research tools you can reduce the risk. The more you research then the better off you’ll be when it comes to picking the right stocks for your portfolio.
There are several different kinds of stock investing. The most popular are mutual funds which spreads out your money across a lot of stocks and is less of a risk. You also don’t get much of a return so these are good for when you want to protect your assets or are saving for retirement. They can build your wealth over time.
Buying individual stocks is the way to go to receive dividends that will pay you every quarter if you have picked the right company to invest in.
In second place for passive income through investing is buying real estate. Rental properties are a fantastic way to generate income right away. As a bonus, you also are building equity in the house and even value so as you earn you also have something increasing in value for later.
Rental property is not exactly passive but it does provide a very stable income. If you live in an area where there is high rent demand but not many rental properties then you can charge whatever you want. You will be required to do some repairs and basically be on call when your tenant needs something, however.
If you do want to have it more passive then you can pay a management company to look over renting it out, screening tenants and also taking care of maintenance. You’ll make less money, but if you have multiple properties then this is a good thing to pay since they would be difficult to manage on your own.
Even buying property to use as an Airbnb is a good way to generate income. If you live in a touristy area or near a beach then you can see thousands of dollars in profit every month on short term lets.