5 Passive Income Ideas For Income Generation
Sure, it’d be great to have a high-paying job and a comfortable salary, but passive income can help investors build wealth and truly live like the 1%. Setting up multiple streams, to enable earning while pursuing other hobbies can potentially lead to early retirement.
Passive income is designed to make money while you sleep, read, or travel like you’ve been meaning to get around to.
“Many members of the ultra-wealthy have multiple income streams, and earn money through methods beyond their traditional 9 to 5,” notes Yieldstreet CEO Milind Mehere.
The effort and insight required for creating a new passive income stream can potentially pay serious dividends, especially if started early on in one’s career. If you’re a newer investor wondering how you can start building your wealth, here are our top 5 passive income ideas:
Rental Income From Home or Car
Services like Airbnb and Touro can make it easy for you to take a spare bedroom or car and turn them into sources of passive income. This is a great option for smart, time-pressed investors because the maintenance required (think house cleanings and car valets) can be cheaply outsourced, enabling extra cash each month with minimal additional effort and oversight.
Peer-To-Peer Lending
Investments in fintech platforms set a record high in 2021, and the fintech boom continues to transpire through 2022-2023. And there is a good reason behind it: smart investors who want to stay ahead of the curve are looking to fintech and outside of traditional equity markets to help construct their portfolio. This means huge amounts of capital are flowing into crowdfunding platforms that look for opportunities outside of traditional public markets.
Platforms like Prosper or Funding Circle allow individuals to apply for a loan, or allow investors to lend out money for a targeted return. Make sure that you’re comfortable lending and know what you’re getting into, but P2P lending is another passive income stream to consider.
Dividend Stocks
You may be able to employ dividend stocks effectively as part of your overall passive income strategy. Investing in dividend stocks makes you a shareholder, and can bring with it the benefits of regular payouts in the form of cash or more shares. This can be a great cycle to take advantage of because the more you own, the more passive income you can build.
REITs
Real Estate Investment Trusts function like a dividend stock, allowing you to potentially earn a fixed amount on your real estate investment with the benefit of certain underlying protections. If you are looking to add exposure to real estate into your passive income portfolio, but don’t have the funds associated with making a large scale purchase, this can be an easy way to start real estate investing without much effort on your part.
Alternative Investments Like Art Finance
Yieldstreet offers crowdfunding investment opportunities in deals outside of the stock market. This can allow you to access traditional passive income opportunities at a fraction of the cost of opportunities traditionally offered through hedge funds. For instance, our Art Finance asset class offers investment opportunities in works by some of the most important and widely recognized artists.
If you’re not sure where to start, you can take our quick and easy quiz which will give you some ideas about the best types of investment for you.
Final Words
Passive investing is a great way to generate income without actively managing your investments. One of the biggest benefits of passive investing is that it requires less time and effort than active investing, which can be a huge advantage for busy professionals like yourself. Passive investing can also help you minimize risk by spreading your investments across a broad range of alternative assets. This can help you weather market fluctuations and reduce the impact of any one asset’s poor performance. Whether you’re looking to generate additional income or build long-term wealth, passive investing with these 5 income ideas can be a smart and effective strategy.
All investments involve risk, including the possible loss of capital. There can be no assurance that any product or strategy described herein will achieve any targets or that there will be any return of capital. Past performance is not a guarantee or reliable indicator of future results. Current performance may be lower or higher than the past performance data quoted. Any historical returns, expected or target returns are hypothetical in nature and may not reflect actual future performance. All performance and/or targets contained herein are subject to revision by Yieldstreet and are provided solely as a guide to current expectations.
What's Yieldstreet?
Yieldstreet provides access to alternative investments previously reserved only for institutions and the ultra-wealthy. Our mission is to help millions of people generate $3 billion of income outside the traditional public markets by 2025. We are committed to making financial products more inclusive by creating a modern investment portfolio.
2 Represents an average net realized internal rate of return (IRR) with respect to all matured investments in your portfolio, utilizing the effective dates and amounts to and from the investments and net of management fees and all other expenses charged to the investments. Past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. All securities involve risk and may result in significant losses, including the loss of principal invested.[read more]