What Are The Best Passive Income Sources?
Fluctuation in financial and property markets over the last three years has made it difficult for many people to calculate how to achieve long-term life goals. In these cases, having multiple income streams can help to overcome fear about rising and falling housing prices, decreases in other markets and overall uncertainty. If you maintain a passive income, you can very easily achieve the lifestyle you want while continuing to make essential purchases with your salary. Understanding where passive income can come from is important to anyone with financial goals and we discuss a plethora of passive income streams in the paragraphs below.
P2P Lending Strategies
Lending money to friends and family is tough and can readily lead to disagreements. The P2P lending market is one way you can earn interest on loans via regulated third parties like Prospr; if you have enough savings to begin with. Be sure to use regulated lending platforms to avoid becoming out-of-pocket if borrowers default on their loans.
Certificate of Deposit Accounts
Certificate of Deposit, or CD, accounts can be easily opened at the bank with no minimum investment. However, with low, low rates of return (around 1.5%), only the super-rich can afford to live comfortably off the returns on a CD account: in 2020, you needed close to $9 million in savings to earn $50,000 per annum.
Bonds are a calculated defensive strategy useful in times of heightened financial uncertainty, like the COVID-19 pandemic. The 10-year yield of investment bonds has increased significantly recently which has made this type of investment especially lucrative. However, the value of bonds goes down when the Reserve Bank raises interest rates, so act accordingly.
Creating A Product
Creating a useful product is an exceptional way to generate passive income. Whether your product is something you sell at the markets, something you produce digitally or your face-to-face time, you can make the rules when it comes to remuneration. Assuming you have enough spare time and skills, it is worth considering how you might use your knowledge to manufacture something you can sell on the side for cold, hard cash.
Physical Real Estate
Owning real estate is potentially one of the best forms of passive income because it grows in value over time, earns income and is tax-deductible. It requires money to get into the property market, but once you’re there it is usually a safe bet: presuming good market conditions.
Crowdfunding Commercial Real Estate
This passive income option can be facilitated through a variety of regulated bodies who crowdfund investment capital for commercial real estate ventures. This option can be safer than individual property investing because it diversifies the risk amongst a large portfolio of investors.
Investing in blue-chip, dividend-paying stocks is also potentially one of the most high-paying of all passive income sources. Markets are making a comeback since the end of the global coronavirus pandemic. However, in order to make enough passive income to live, you still need a large volume of capital upon entering the market.
Contact Pillar Financial
Call our friendly team on 1300 730 309 or reach out via our contact page to ask what we can do for you as you begin your journey towards passive income acquisition.