There are many different types of passive investments that can potentially pay off. Some of the more common ones include real estate, stocks, and bonds. While there are no guarantees with any type of investment, those who choose to go the passive route often find that they have less stress and more peace of mind, knowing that their money is working for them, even when they’re not actively involved in the day-to-day operations.
The following will explore some of the more popular passive investments and how they can provide a stream of income.
Real Estate
One of the greatest and biggest benefits of investing in real estate is that it can provide a steady stream of income. This is in contrast to the stock market, which can be incredibly volatile and may not always generate positive returns.
When it comes to real estate, there are a few particular different ways you can go about generating income. The most common is to purchase a property and then rent it out. You can also invest in a real estate investment trust (REIT), which is a company that owns or finances income-producing real estate. REITs can be a great way to get started in real estate investing without actually having to purchase a property outright. Another option is to become a real estate wholesaler, which involves finding discounted properties and then selling them at a higher price to another investor.
Digital Currencies
If you’re looking for a more high-risk, high-reward investment, you may want to consider investing in digital currencies. Also known as cryptocurrencies, digital currencies are a type of asset that can be traded online. Bitcoin, perhaps the most well-known cryptocurrency, has seen its value fully skyrocket in recent years, with some investors becoming overnight millionaires. There’s also Ether, which is the cryptocurrency used on the Ethereum blockchain, and Litecoin, which is similar to Bitcoin, but with faster transaction times.
While there’s no correct currency to choose, you should always look at the state of the market. Use OKX.com for USD to ETH conversion and find a strong digital wallet that will hold your assets securely.
Stocks
Real estate isn’t the only type of passive investment that can be lucrative, though. Another popular option is investing in stocks. While it’s important to note that there is some risk involved in this type of investment, if done correctly, stocks can offer some pretty impressive returns. According to data from JP Morgan Asset Management, “U.S. stocks have returned an average of 7% per year since 1802”.
While there are currently several different ways to invest in stocks, one of the most common is to purchase shares of an Exchange Traded Fund (ETF). ETFs are a type of investment fund that allows you to invest in a variety of proper stocks, bonds, and other assets all in one place.
When it comes to choosing an ETF, there are a few things you’ll want to keep in mind, such as the fees associated with the fund and what type of stocks it invests in. For example, some ETFs focus on specific sectors, such as healthcare or technology, while others invest in a variety of different industries.