A passive income investment is something that pays you money while you sleep, the best passive income investments are ones that pay you for life without ever working or needing a job.
When thinking of my income, I don’t think of my true income as money I earn from my job, instead, it’s the income I make while I sleep that I count as true income.
“What’s the best investment money can buy?”. “It depends on your financial goals”. That never made any sense to me, how can my goals be any different from yours? Isn’t the goal to make as much money as possible and be rich?
Don’t we all want to know how to be a millionaire? It turns out, the answer is not so black and white, with that said, this is my attempt at answering that question for my younger self, here are the top 5 passive income investments of all time.
1. Real Estate Investing
If you want to make the most amount of money, as quickly as possible, with the most flexibility and balance, then real estate is the go-to asset.
You can buy $100 worth of real estate with only $20 down, so your money goes much farther than anywhere else.
Unfortunately, it’s difficult, dividends are much easier to start with and it takes a pretty big learning curve and much more money to start doing this.
If you can master it though, real estate can be a protection against inflation in the worst-case scenario.
So, it’s just about as safe as a blue-chip stock, when it comes to taxes, you can write off just about everything when it comes to real estate, property taxes, mortgage interest, and other things.
2. Stock Market Investing
This is specifically for, buying dividend stocks to generate passive income, this is my all-time favorite passive investment.
3. Royalties
I make around $80 a month in royalties from books I put together, the sky is the limit, so the money is definitely there, however, it’s difficult and not everyone can make a product people will want to buy.
Since you’re investing in yourself essentially, I think the risk is low so it shouldn’t be too much hassle to get a few pieces of valuable information together and package it conveniently for someone else to consume, also, taxes for royalties are taxed on Schedule C under ordinary income rates.
4. P2P Lending AKA (Peer To Peer Lending)
This is where you loan money to people and small businesses that were not able to get approved on loans from traditional banks, these investments are higher risk because the borrowers usually have lower credit scores.
The return rate on your money is about 4-7% so it’s a pretty good return, however, you need to be careful doing this because anyone can get started, but you may never get your money back if someone defaults on their loan.
In addition, taxes are based on your income tax bracket, which isn’t as good as long-term capital gains.
5. Alternative Investments
Let’s start with the ones that you should avoid, many people seem to think these are good investments, but they aren’t.
These include collectibles, coins, art, watches, etc, these investments don’t pay us passive income and involve a degree of luck beyond our control.
However, it’s easy to invest and buy for anyone around the world, so it earns a high score for accessibility.
Investing here to protect yourself isn’t very safe since, you risk damages, loss, or theft, and your investment losing value, for taxes, it’s taxed a long-term capitals gains rate of 28%
Honorable mentions I didn’t include are CDs, bonds, high yield savings accounts but I don’t consider them “Investments” as much as just places to hold your money so it doesn’t lose value.
Yeah, that’s right another nice and short blog, I thought I would give you a strong hit after hit of tips, tricks, and techniques, and take out the fluff, I hope you still found it valuable.
We can probably both agree that it doesn’t matter how long the blog is, what matters is the value that is inside it right? And let’s be honest (You don’t really want to read millions of words do you?).
So, with that said and done, if you want the shortcut to success in your financial life, click the link below and you will get instant access to my brand-new book Skills. Scale. Sustainability.
Once you gain your copy of this book, I will reveal the ZERO to HERO blueprint, used to keep growing and succeeding in your life, even if you’re a complete beginner or a business master.
Thank you for stopping by and taking the time to educate yourself, you’re already ahead of a massive amount of the population, I believe you will achieve your hopes and dreams.
Don’t lose hope! I know it can be hard, but the highest mountains have the most beautiful views.
Until next time…
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