Let’s face it — we could all do with some extra cash in our bank accounts and income-generating assets.
Indeed, money’s tight for millions of Americans right now. At $14 trillion, national consumer debt is at an all-time high. Huge numbers of people battle against a dwindling bank balance every single day of their lives.
But you don’t need to be in a financial bind to benefit from extra income. Wealth generation is, of course, a means of getting yourself out of debt. However, it’s also a one-way ticket to a better quality of life all-round. The key to attaining it?
Any investment that appreciates helps to unlock the door to financial freedom. The trick is finding the right investments to make!
Thankfully, there’s a wide selection of top money-making options you can start right now. With a bit of time, effort, and/or initial capital, you can build yourself a cash cow to milk for years to come.
Sound good? Read on for 11 incredible ways to generate income in your sleep.
1. Savings Accounts
Save more than you spend, and you should always have money in your account.
Earn interest on those savings, though, and you’re onto a winner.
You want your money to work for you. When it just sits in a current account, rates of inflation mean that your cash becomes less valuable over time.
Are you looking for an easy income-generating asset to get started with immediately? Go down to your bank (or head to their website) and open yourself a savings account.
The low rates of interest mean you’re unlikely to earn your financial freedom this way. You will, however, see your bank balance start appreciating. Better still, the numbers will increase without you doing a thing.
2. Certificate of Deposits
CDs, as they’re otherwise known, offer an alternative to traditional savings accounts.
You get all the benefits of a savings account, just with higher rates of interest. In exchange for those higher returns, though, you agree not to touch the funds for an agreed-upon period.
You might sign up for a 12 month, $1000 CD offering a 5% return, for example.
At the end of that year, you’d walk away with $1050. During that year, though, you wouldn’t have been able to withdraw money from the account (without incurring a fee).
You walk away with more cash than you had before, and more than you’d have got with a basic savings account. Those are both positives. For some people, though, lacking access to that cash could be a problem if emergencies were to arise.
Furthermore, rates of interest are notoriously low at the moment. You’d be lucky to see returns anywhere near as high as the figure in our example.
Real estate is an excellent investment that can earn big bucks when done correctly.
Unfortunately, housing isn’t cheap, which means you need a degree of capital upfront to make it happen. That fact aside, though, few other assets offer returns as high as houses and apartments.
Own one, two, or more properties, and you can almost guarantee your financial security and freedom.
There are multiple ways that real estate can make you wealthier.
Firstly, assuming the housing market’s in good shape, your property will naturally increase in value over time. Secondly, you could purchase sub-standard property, fix it up, and sell it on for a profit (in a process called ‘flipping’). Thirdly, you could buy rental property and find tenants to provide a monthly income-generating asset.
4. Room Rentals
Do you already own a house or apartment?
Well, the chances are high that you’ve got one or more spare rooms in it. And, if that’s the case, then you could be sitting on a significant source of income-generating asset.
Renting those spare bedrooms out (or converting rooms into new bedrooms) can be a substantial financial boon; each one could bring you hundreds or thousands of dollars every month.
The best part? There’s very little work to do on your part.
Advertise the spare room(s) online and/or offline to find the tenant(s). Make sure they know and agree to the rental terms, including how much to pay and when to pay it.
And, voila, you’ve turned your spare rooms into income-generating assets.
The downside is that you have to share your space with someone. With diligent vetting of prospective tenants, though, you shouldn’t struggle to find respectful and friendly people.
Another option would be to use Airbnb for short-term rentals instead. The swift turn around means you won’t suffer at the hands of troublesome tenants. Better still, you can charge a higher per-night rate.
5. High Dividend Stocks
Stocks represent a transition from consumer to owner.
Invest in them, and you essentially own (a portion of) the company. The businesses in which you invest start paying you money, as opposed to the other way around.
Throw in dividends, and things start looking even better.
This is when a company pays a proportion of its earnings to investors. As a shareholder in a profitable company, you’ll receive a regular cheque as a reward for your investment.
Unfortunately, many people feel out of their depth with regards to the stock market. Feeling out of their depth and fearful of the consequences, they’ll decide not to invest at all. They miss out on the potential rewards in the process.
The easiest way to get started is to use index funds. Imagine spreading your investment between a pre-selected bundle of reputable companies. That, essentially, is what you get with an index fund.
You benefit from the automatic diversification of your portfolio. Better still, with certain funds, you can receive dividend payments too.
A Note on Compounding Interest
The trick to any investing is starting as early as possible.
Because of compounding interest.
As you know, any investment accrues interest. As a result, the value of your initial investment increases exponentially as time goes by; you get interest on top of interest.
The longer you invest, the more time that compounding can work in your favor.
For instance, assuming a 10% return each year, a 5 dollar daily investment over 50 years would return $2.3 million! That’s a prime example of the power of investing (and starting your efforts early).
Start later in life, and you have to invest more money upfront to enjoy the same returns.
Investing at a young age means there’s less risk too.
Markets fluctuate; bull and bear markets will both occur during your lifetime. With more time at your disposal, though, there’s less chance of you losing your money. The market will recover, and everything should, in theory, average out in your favor (assuming you leave your money invested).
Stocks and shares have a reputation as risky investments.
Bonds are a low-risk alternative.
They’re essentially loans. Invest in bonds, and you’re effectively loaning cash to governments or corporations. In return, you receive an interest payment for the duration of it.
Then, at the end of the loan period, you get the initial investment paid back into your account (minus the cost of inflation).
The good news is that bonds are a safe bet; you’ll always get the return that’s been promised to you! The main downside is the minimal returns you get versus higher-risk investments. Likewise, the money you lose to inflation can slash what you receive from the interest payments.
Ultimately, bonds are a good bet for anyone with lower risk tolerance. For older people with less time to weather market fluctuations, they make a lot of sense. You’re almost guaranteed to get your money back!
For younger people, though, it’s worth considering the opportunity cost involved. Your money could be spent elsewhere, in riskier places that return far more.
7. Real Estate Investment Trusts
Known as REITs, for short, real estate investment trusts are another great way to leverage real-estate to enhance your financial wellbeing.
Even better, you have none of the responsibilities of a landlord or property owner. Invest in REITs, and you wave goodbye to all tenant inquiries, housing repairs, marketing efforts, and so on.
Think of it as investing in an ordinary company.
However, this particular company is involved in the management, ownership, and/or investment in real estate properties. It’s essentially a mutual fund (managed by professionals in the industry) that holds one or more real estate projects.
Investor money goes towards the running and development of the projects.
REITs are popular for two reasons:
1) The dividends they pay tend to beat those of typical dividend-paying shares (stocks and bonds etc.).
2) It represents a far more passive way of generating income from real estate.
Got some capital burning a hole in your pocket? Want the financial benefits of investing in real estate, with none of the hassles of owning it yourself? REITs are a great bet.
E-books are a prime example of a passive income-generating asset stream you can start creating right now.
These days, it’s easier than ever before to become an author. Thanks to Amazon’s publishing platform, you can self-publish an e-book and get a cut of any sales you make!
It’s a lot of work upfront, for sure.
Once you complete the content, though, it can earn you passive income-generating assets for years to come. Why not combine those Amazon sales with those from a personal website? The revenue you get from your e-book should get a significant boost.
9. Online and/or Email Courses
Creating web courses is much the same story.
They take a lot of work to complete upfront. You have to identify an area of expertise and put together a high-value educational resource. Finally, you need to find people willing to pay for it!
All of that takes time, effort, and a level of capital investment to do well.
Once it’s done, though, you’ve got yourself a valuable asset that could, in theory, earn an income well into the future. Think about selling the course on a personal website as well as on sites like Udemy.
Already have an audience? Well, you’re one step ahead of the game. Use it to your advantage to drive sales from the start.
Here’s more info on starting an online business.
Blogs are nothing new.
Four million new blog posts hit the web every single day. That’s a hell of a lot of content being created at any moment in time!
Despite the competition, starting a blog remains a great way to generate passive income online.
You can do it cheaply too.
For a few dollars, you can buy yourself a domain name and organize hosting. From there, creating well-written, optimized content that ranks in Google is free, and should see high levels of traffic coming to the site.
In time, you can use everything from advertising and affiliate marketing to selling personal products to make money.
11. App and Software Development
In our digital world, app and software development skills are in high demand.
Individuals and businesses pay serious money for the right product(s).
Know how to code? Well, use that skill to your advantage. The app or piece of software you create could become a significant course of income if you can market it to the right parties.
Look around you for problems that need solving. Think about the challenges faced by people and businesses and set about creating digital solutions.
Having created the product, you could sell the rights to it or charge a subscription fee for its usage.
Either way, you’ve built yourself an incredible income-generating asset.
Need some inspiration? Here’s a post full of apps that make money.
Invest In These Income Generating Assets
Almost everyone would benefit from having extra cash in the bank.
After all, more money leads to more opportunities and less stress. The trick is finding a legal and lucrative means of putting it there!
Income-generating assets are one of the best ways to do it. Investing in anything that increases in value is a sure-fire way to facilitate financial freedom.
Hopefully, this article has provided some top ideas for assets to get you started.
Want to discover more ways to earn a passive living? Click here now!