There is enough understandable appeal behind the idea of building wealth through passive income, particularly when you’re worried about saving enough money from your work earnings to meet your retirement goals. Passive income involves regular earnings from a source apart from a contractor or an employer. As per the IRS and its rules, passive income should income from 2 sources, a business in which the person doesn’t actively participate or rental income. There are many who find passive income is that which helps you earn something for nothing and has got a ‘get rich quick’ appeal too. Check out few types of passive-income strategies you may try.
• Lending Club investments – Play it safe
There’s probably no other passive income which can be better than earning interest on safe investment vehicles like bank certificates of deposit and US Treasury securities. Although the problem is that such instruments give you very less in return, which is often less than 1%. This may be the best form of passive income but you can’t definitely retire on such returns because they’re too low. This makes it perfect to talk about peer-to-peer lending platform where people come online to get loans, watch out for high interest opportunities and offer funds for such loans. You can earn interest rates which exceed 10% per year and hence this can definitely be a good option.
• Try index funds – Investing in the passive stock market
Index funds are nothing but a kind of mutual fund which offers you an opportunity to invest in the passive stock market. In case you invest your dollars in an index fund which is based on S&P 500 Index, you will actually be invested in the general market without you having to readjust your investment portfolio. All of it will be handled by the fund and it will adjust your investment portfolio likewise.
• Inherit money – The safest way of passive earning
Who doesn’t wish that we had a rich uncle or a grandfather who loved us so much so that he named us the beneficiary of his estate? But sadly enough, this happens only in the movies but this is undoubtedly the easiest and the quickest way to seek advantage of a passive amount of cash. Though there are very few cases of massive inheritance, yet the benefit of this option is that you wouldn’t have to create any capital amount to benefit from this stream.
• Rental money – The most legitimate way of passive income
Earning money from renting your house or apartment is the most legal way of making passive income and thankfully this is also one of the most lucrative options available. You will fall in love with the cash flow that you get monthly, the equity which you’re able to build, the long term appreciation of the real estate property and the tax perks that you get.
Apart from the above mentioned ones, there is a huge list of passive income ideas
which you might follow according to your convenience. Continue building wealth so as to build your financial safe in the near future.