Are you searching for tips on creating passive income? There’s no better time to focus on creating passive income streams than summer 2021.
In this article, I will share with you several tips you can use for creating passive income so that you can fund your retirement or accomplish your financial goals.
Internet-Based Passive Income Streams
One of the very best ways to generate passive income during summer 2021, and beyond, is by creating internet-based passive income streams.
Thanks to the Internet, there are a wide variety of ways to create passive income streams online including:
Affiliate marketing – Sign up as an affiliate and earn a commission anytime someone buys the products or services from the company that you’re promoting. This is by far the quickest way to make passive income because you don’t have to create a product and, in most cases, you don’t have to talk with anyone either.
E-Commerce – Creating an e-commerce business is another way to earn a passive income because an e-commerce business can be 100% automated and remotely managed by a VA, so you don’t have to do any of the ongoing work yourself.
Flip Retail Products – Another excellent way to earn passive income online is by flipping retail products. This is another effective method for earning affiliate income because there’s nothing easier than buying a product at a discount and reselling that product for a much higher price.
A good example of the money that can be made from flipping retail products is Monopoly For Millennials, the most recent version of the iconic Monopoly game that was a huge hit during the holiday season two years ago.
Savvy entrepreneurs were able to make thousands of dollars during the holiday season buying this game low from retail establishments like Walmart, and selling it for a much higher price on websites like amazon.com.
Note – This method isn’t for everyone because you have to follow which products are hot and currently selling but with the wide variety of apps available in this day and age, it’s easier than ever before for an entrepreneur to track which products are in demand and essentially be in the right place, at the right time.
Earn Income Passively From Investing
Peer-to-peer lending – A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Prosper or LendingClub. Other players include Funding Circle, which targets businesses and has higher borrowing limits, and Payoff, which targets better credit risks.
Opportunity: As a lender, you earn income via interest payments made on the loans. But because the loan is unsecured, you face the risk of default, meaning you could end up with nothing.
To cut that risk, you need to do two things:
- Diversify your lending portfolio by investing smaller amounts over multiple loans. At Prosper.com and LendingClub, the minimum investment per loan is $25.
- Analyze historical data on the prospective passive income borrowers to make informed picks.
Risk: It takes time to master the metrics of P2P lending, so it’s not entirely passive, and you’ll want to carefully vet your prospective borrowers, and because you’re investing in multiple loans, you must pay close attention to payments received. Whatever you make in interest should be reinvested if you want to build an income.
Economic recessions can also make high-yielding personal loans a more likely candidate for default, too, so if COVID-19 continues to hurt the economy, these loans may go bad at higher than historical rates.
Dividend stocks – Shareholders in companies with dividend-yielding stocks receive a payment at regular intervals from the company. Companies pay cash dividends every quarter out of their profits, and all you need to do is own the stock. Passive income dividends are paid per share of stock, so the more shares you own, the higher your payout.
Opportunity: Since the income from the stocks isn’t related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money. The money will simply be deposited in your brokerage account.
Risk: The tricky part is choosing the right stocks.
For example, companies issuing a very high dividend may not be able to sustain it. Graves warns that too many novices jump into the market without thoroughly investigating the company issuing the stock. “You’ve got to investigate each company’s website and be comfortable with their financial statements,” Graves says. “You should spend two to three weeks investigating each company.”
That said, there are ways to invest in dividend-yielding stocks without spending a huge amount of time evaluating companies. Graves advises going with exchange-traded funds or ETFs. ETFs are investment funds that hold assets such as stocks, commodities, and bonds, but they trade like stocks. ETFs also diversify your holdings, so if one company cuts its payout, it doesn’t affect the ETF’s price or dividend too much.
“ETFs are an ideal choice for novices because they are easy to understand, highly liquid, inexpensive, and have far better potential returns because of far lower costs than mutual funds,” Graves says.
Another key risk is that stocks or ETFs can move down significantly in short periods, especially during times of uncertainty, as in 2020 when the coronavirus crisis shocked financial markets. Economic stress can also cause some companies to cut their passive income dividends entirely, while diversified funds may feel less of a pinch.
How To Earn From Multifamily Real Estate Investing
One of the most effective ways to earn passive income is from multifamily real estate investing.
Multifamily real estate investment income is fueled by 9-to-18-month tenant leases, which provide a regular and dependable income stream that should produce positive cash flow higher than typical stock dividends.
If you’re an accredited investor who is ready to get started investing in multifamily properties, I encourage you to contact me by calling (630) 229-2383 or click here to connect with us online.