5 Ways to Earn Extra Income Through Investments

Investing can seem like a complex world to break through to, but now more than ever, there are increasingly easy ways to invest your money to earn more. The best part is that some options for investing don’t require a lot of money. 

As the pandemic continues, some of us may be looking for other opportunities to supplement our income. Whether your hours were cut or you lost your job entirely, rising debt can be a scary thought, and investing can seem like a solution to the problem. However, if you’re very deep into debt, consider contacting a bankruptcy attorney since these methods are long-term investments. 

Below are five ways you can take your existing income and invest it to earn more money. Some of these take time to see progress, so don’t expect results overnight!

  1. Play the Stock Market

Buying and selling stocks can seem like an uncomplicated way to make extra money, but it is definitely not easy. Knowing what to buy or when to sell can be difficult. Buying stocks that pay dividends can be a long-term approach to making extra money, but it can work for you. As a company does better, in theory, you can expect your dividends to grow too. No matter if you invest for dividends or day trade, we recommend doing your own research. 

Pros

The stock market offers two ways for investors to make money depending on the effort they decide to put in. Day traders buy and sell stocks daily and usually don’t hold onto them for long. The other way is to wait and invest for dividend returns. When you buy a stock, the stock represents a percentage of ownership you now own. As an owner of the company, you are entitled to a dividend of the company’s profit. 

Cons

Depending on the method you choose, your results can be very different. If you don’t do your research, you can end up investing in companies that may not grow or are currently having issues. Dividend returns can vary from year to year, so there’s no guarantee of similar returns. People dedicate their careers to analyzing how the stock market works, so taking the time to do your research will save you time, money, and stress from poor investment decisions. 

  1. Explore Cryptocurrency 

Cryptocurrency is new and popular among investors. Many consider it to be the “Wild West” of the digital world investing because it’s decentralized. This means no one government or bank controls their value. Cryptocurrencies can be worth anything to anyone, meaning that anyone can buy or sell them for any price. 

Pros

Ease of access is one of the top qualities Crypto has to offer. You can buy and sell crypto from your smartphone. There’s also a huge potential for returns but be warned Crypto can be very volatile. 

Cons

Crypto can be very unstable. You may have seen the incredible ups cryptocurrencies can have, but for every extreme up is a just as incredible down. There are many risks as people still figure out how it works and how it can be used. In addition, since it isn’t regulated like other investments, there’s no guarantee of a return or a way to measure how the cryptocurrency will act reliably. 

  1. Try out Commercial Real Estate

Depending on how you invest, commercial real estate can even be a passive income for your portfolio. In most cases, investing in real estate can be expensive and end up being more work than you expect. 

Pros

If you work with a real estate investment trust (REIT), you can gain a somewhat passive income from it. How it works is you invest in a trust with other investors, then a manager from the trust will purchase commercial real estate on your behalf. This removes all of the efforts you would originally have to put into managing a property and simplifies it into dividend payments for your investment. 

Cons

Securing quality tenants and negotiating decent rent rates for your tenants is essential but complex. So many factors like the property, location, amenities, and so much more can influence how much people are willing to pay. 

  1. Learn about Bonds

Bonds are sold to investors when companies, governments, or other entities need to raise money. It’s a loan that, with interest, the entity will repay to the investor. 

Pros

In most cases, bond prices tend to be less volatile than stocks. They also can provide the investor with steady, reliable returns as your money is repaid with interest. 

Cons

Generally, the returns on bonds are designed to be long-term. While there are some less expensive bonds, most require more significant amounts to buy. 

  1. Look into Rental Properties

Investing in residential rental properties can be lucrative and, in some cases, considered passive income. Real estate is a popular investment for people looking to diversify their portfolios. If you can afford the initial cost to buy or finance a property, finding a marketable property that’ll attract quality tenants can almost guarantee a return on your investment. 

Pros

If your investment succeeds and you have a good tenant and cover your expenses effectively, you can expect to gain decent returns. Investors that decide to invest in more properties can hire a manager that will oversee the properties for you. 

Cons

Managing these properties can be more than some people want to handle. Since these are your properties, you act as the landlord. Like any landlord, the responsibility for maintenance and repairs falls upon you. In addition, the costs are your responsibility as well. Attracting and maintaining decent tenants can be difficult, and dealing with negative tenants that damage the property can make your investment harder. 

If you have some extra money around and want to invest, then consider some of these options. Depending on how much you have will determine which method you can use, but all have the opportunity to help you make extra money. No matter what you decide to do, we recommend that you take the time to do your own research and find which method is best for you. 

About the Author

Veronica Baxter is a writer, blogger, and legal assistant operating out of the greater Philadelphia area.

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