Investing requires an understanding of a fundamental principle. The S and P500 had an annual return of over 28 percentage in 2019. While earning 1.50 percentage on your savings is about as good as it gets, you can make much higher returns in the stock market. While having a high-interest savings account is an excellent way to make some income passively, it pales in comparison to investing your money. They consistently pay higher rates than almost any local or national brick and mortar banks. That means you'll be making $3,000 per year off of your couple hundred thousand dollars instead of $200 like you would with a megabank.Įven if you don't have a ton of money saved up, you will still make way more money than you would with a regular checking or savings account. The best part is that as of this writing (May 2020), they pay over 1.50 percentage interest per year. The best high-interest banks are online only, so you won't need to mess with going into the bank to get started. That's why having your money in a high-interest savings account is CLUTCH. That means that even if you have hundreds of thousands of dollars with them, you'll very little money (like ~$200 per year). The big banks like Wells Fargo, Chase, Bank of America, and the others essentially pay around 0.08 percentage interest. Sadly, the banks' brick and mortar banks that most people use don't value them and barely pay any money in interest. If you are afraid of investing, there's a chance you have a decent chunk of change saved in a checking or savings account. When incentives are aligned, you give yourself the best chance to win. Preferred returns for their properties are in the 7 percentage range. ![]() Holding periods tend to be in the five-year range. Once complete, when leases run out, they can increase rents, which increase cash flows and the value of the properties. The fact they do all of the work themselves means they can do it for much less than many of their competitors. Or maybe they just need a fresh coat of paint. It could be updating bathrooms or kitchens. We're not talking about complete renovations. They're looking for properties that have high occupancy with positive cash flow that needs some work. They use technology and expertise to scour the country for properties that fit their specific criteria. Rather than try and be all things to all people, DiversyFund invests in lower risk multifamily housing. The thing I love about companies like DiversyFund is that they don't make money unless the investors make money since they invest and manage the projects themselves.Īnother thing that makes DiversyFund different is how they invest. It's a private REIT (real estate investment trust) that allows you to invest in professional real estate projects passively for as little as $500. It's often better having your very own real estate professional picking the properties. However, there are a ton of companies that give you the ability to invest in commercial and residential real estate projects without having actually to do any of the heavy lifting yourself. Talk to anyone who's a landlord, and they'll tell you that passive is the last word they'd ever use to describe having to replace a washing machine after a full day of work. ![]() It may surprise you what some of the best passive income ideas are. Unless you are making money the old-fashioned way (inheriting it), or you are willing to put in some effort.įor now, let's talk about a few passive income strategies if you're ready to invest and make your money work for you instead of losing value in a bank account. The truth is, to build a passive income stream, you will need to invest in an asset that produces passive income for you. And doesn't that kind of wipe out the passive in passive income? The best passive income ideas are just that – passive. Most passive income ideas need you to put in a LOT of work. Passive income means income from something that requires no (or little) work. Since you're already busy with your everyday life, you won't want to pick up a 2nd job that you don't have time for. ![]() ![]() The only problem is that most ‘passive' income ideas that you'll come across are not passive at all. Those who achieve financial independence will tell you that having multiple streams of income from different sources is the key. I mean, who wouldn't want to be making some extra money while playing with the kids or while watching a game? Earning passive income provides the opportunity to do just that. Making money while you sleep has a beautiful ring to it.
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