While it’s a good idea to have a day job, investing in income-generating assets is one way of supplementing your monthly income. As an investor, you start by redirecting your monthly earnings towards assets that generate revenue. You need to create a concrete financial plan and determine the right amount of money you’re willing to invest in. Here are the top five income-generating assets that you should consider in your next investment.
According to Statista, 55% of adult Americans invested in the stock market in 2018. Stocks involve investing in business equity and earning dividends. You don’t require a lot of capital to invest in stocks and be rewarded in dividends.
You can choose to invest in individual stocks by buying a company’s shares to test the waters or go for mutual funds where you invest in multiple stocks from different companies. While individual stocks come with potentially higher risk levels, mutual funds are considered safer because they’re diversified. You need to familiarize yourself with the workings of the stock market before you invest your hard-earned money.
Trading CFDs on stock indices or forex trading is a viable way of investing in assets that generate income. Depending on the amount of capital you’re willing to spend, the risk management practices you employ and your trading strategies, you can generate some good revenue. While day trading is potentially risky, it’s a lucrative business idea.
Real Estate Assets
Rental properties are the most common real estate investing strategies that can help you generate a passive income. The investment entails buying residential properties or redeveloping apartments and sourcing for tenants who will pay you rent. Even without property management experience, you can hire a property manager to handle everything, including building maintenance and rent collection on your behalf.
Investing in rental properties is a costly business venture that requires you to do a lot of due diligence to avoid making costly mistakes. Thankfully, with the emergence of online services such as Airbnb, you can also make money by renting out a spare room in your home and generate some extra income. You can expand your investment portfolio into office buildings, parking garages, and storage units as you grow.
Peer-To-Peer Lending (P2P)
P2P is an investment model that is designed to allow individuals to act like banks. Through credible lending platforms such as Lending Club, you can lend money to other people and earn an income through interests.
However, in P2P, borrowers don’t have to go through the stringent financial background checks, like in the case of banks and other financial institutions. This means that investing your money in P2P could be a risky investment because expecting a borrower with a poor credit score to repay you is quite a considerable gamble.
This is one of the most straightforward ways of generating passive income consistently. You simply need to open a savings account and start saving at your local bank. Over time, your money will accrue and earn you some revenue depending on the interest rates and the saved amount. You may also benefit from liquidity.
Even with minimal capital, your investment options are limitless. If you don’t have enough funds to get started, consider checking out various asset investment guides online on how to raise capital or source for angel investors. You need to build a solid investment foundation in order to make the most out of your income-generating assets.