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In my previous post, I covered the ‘top 10 passive income streams’ that could be setup with little or no money investment. In this post, you’ll see some crazily profitable ways to be debt-free and build wealth just by investing some money upfront.
I would openly pronounce that, if you’re looking to multiply your earnings without actively working for it, this post is for YOU!
Hope I’m not giving night terrors by suggesting you to invest money!
But, Let me tell you, ‘Why you Should invest money?’.
My prompt answer will be in order to create wealth.
Time is your most precious asset! I would say, the best Investment of Money is to Spend Money to buy Time & Reuse the later to make Steady #PassiveIncome. Click To Tweet
You can make money with minimal investment but that requires you to put in a lot of efforts & invest loads of time.What if you can’t afford that much time? In such a state, the best way to build wealth is only by investing money.
Passive Income Streams that Require Upfront Money Investment
There are several categories of investments, and many of those categories have thousands of choices within them. So finding the right ones for you isn’t a trivial matter. The single greatest factor, by far, in growing your long-term wealth is the rate of return you get on your investment.This is when the below list comes handy and helps you take the proper leap to attain financial stability and live your dream life.
1) Dividends Stocks
Dividend investing is a smart strategy that produces a relatively reliable stream of income for investors. Unlike the stock market which is generally volatile, the scope of dividend stocks is pretty reliable. By investing in the dividend stocks, you’ll be able to receive regular income as a shareholder. All you have to do is find great companies to invest in.
However, successful dividend investing requires a thorough knowledge and lot of research.Finding such stocks with a high dividend yield can create a consistent source of residual income that has been proven to outperform the market if applied over the long term. There are many online brokerage firms that help you identify companies to invest and make big money.
Interested! Get started, by investing in the top 3 dividend stocks and by choosing the best online brokerage.
2) Mutual Funds
Investing in Mutual funds is a popular passive form of investment across the globe. Unlike stocks (which are an active form of investment) where you invest in a specific company, in mutual funds, you invest in a collective group of stocks, bonds, and securities. As a mutual funds investor, you are liable to acquire even more revenue, if your collective group of stocks performs well.Hence, this process is considered to more lucrative than the stock market.
Stocks that do well can make up for the shortcomings of the stocks that have not performed so well, and this is an advantage of a mutual fund investment.The overall risk factor for the mutual fund investor is lower than that for the stock investor.
Most beginner investors start with mutual funds. In order to Mutual fund investors should allow a longer time frame, in terms of years, to observe slow and steady growth. Investors interested in actively trading mutual funds should invest in ETFs (exchange-traded funds), which were designed for that purpose.
3) Exchange Traded Funds
Mutual funds are still the cornerstone investment of many retirement plans, but ETFs have been gaining in popularity in the past few years. ETFs are not the same thing as mutual funds. Unlike mutual funds, however, ETF shares are traded on a national stock exchange. Generally, ETFs combine features of a mutual fund and stocks. Like stocks, ETFs can be bought or sold on an exchange at any time during the trading day. But similar to a mutual fund, an ETF holds a basket of assets, like tech stocks, or, more broadly, the U.S. stock market.
Which is a better choice for your investment portfolio?
As per Investopedia:
If you are a long-term, buy-and-hold investor with little interest in trading, you are probably fine with highly rated, no-load mutual funds held by a reputable fund manager since the ability to trade often and quickly is not a characteristic that is important to you.
If you prefer to buy and sell more frequently, ETFs offer greater tradeability, lower costs, diversification, and transparency and therefore may work better for your objectives.
4) Peer to Peer Lending
As per Wikipedia, Peer-to-peer lending (P2P lending) also known as Crowd-lending, is the practice of lending money to individuals or businesses through online services that match lenders directly with borrowers.
In simple, peer-peer lending is a practice when an individual or business gets loans from another entity, not a bank.
If interested you can lend a small portion or the total money based on the request of the borrower. The interest rates are decided based on the credit score of the borrower. As a peer-to-peer lender, you can earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates, even after the P2P lending company has taken a fee for providing the match-making platform and credit checking the borrower. So it’s a win-win situation to both the borrower and the lender.
5) Forex Trading
Foreign exchange market is the place where the trading and exchange of foreign currencies takes place. It is the largest and most liquid market that is susceptible to both risks & rewards depending on how well you do the trading and implement the strategies.
You can obtain funds for your trading account with as little as $100 investment at many retail brokers and begin trading the same day in some cases. The high volatility, ease of access and 24-hr market, low investment make forex trading a potential source of income.
If you want to make good income trading the Fx market, it’s highly essential that you understand and implement the core strategies.
6) CD Ladder/Fixed Deposits
Certificates of deposit, or CDs, typically have the highest interest rates among government-insured savings products. That makes them ideal for people who want to earn passive income without taking much risk.
The price for getting higher interest rates is that you agree to lock in your money for a set time period, sometimes up to five years. The longer a CD’s term — and the larger your deposit — the higher your rates. If you wish to break the bond and release the money within the maturity period, you’re prone to withdrawal penalties.
7) Cash-back Credit cards
The advent of credit cards system has made money-management quick and simple. The rewards offered by these credit cards companies have been compelling the customers into maintaining multiple credit cards over the decades.
Most top credit cards let you earn anywhere from 1-5% back on your money, and that’s with almost no effort on your part! If you’re like me and don’t spend a lot, you can still get points by paying off your regular home bills, groceries, gas, insurance, and all of their other expenses. To get the most of these cash cards, try to use your cash back card for all of your everyday expenses.
Many people prefer to invest in most of the above passive income streams, but it is clearly a choice of the individual.
In fact, I would say choosing the right idea is 80% of the battle.