Passive Income
Passive Income
Another way to accelerate your savings plan is to create passive income. Passive income is a great supplementary source of funds for many people, and it can prove to be an especially valuable lifeline during a recession or other tough times, such as the government lockdown imposed in response to COVID-19. Passive income can keep some money flowing when you lose a job or otherwise experience some financial hardship. We think everyone should have some sort of additional income streaming into their home.
The most asked question we receive is: “Where do I start??”
We suggest starting with your personal hobbies and/or passion. For me (Jason), I started with sneakers. My passion for sneakers started in the 90’s. Of course, my favorite player was MJ and getting a fresh pair of Jordan’s was the best feeling. Here’s a list of passive income ideas for you to consider:
A. Open a high yield savings account (everyone should have this account as it pays you to do absolutely nothing). The APY adjusts as the market changes, but this is a terrific place to park your money risk free.
B. Churn checking accounts (taking advantage of the sign up bonuses. The bonuses range from $200-$500 on average and can be easily executed without changing your payroll direct deposit).
C. Churn credit cards (credit card sign up bonuses range from $150 to $1,500 and up to 125k points. This will be covered on the credit card strategies page).
D. Stock trading (Robinhood, Webull or ETRADE).
E. Invest in CDs, municipal bonds and/or money market accounts through your bank.
F. Rent out your car (sites like Turo will allow you to rent your car out daily for extra cash)
G. Crowdfunding lending (utilizing sites like Honeycomb will allow you to invest in small businesses with a fixed rate return).
H. Peer-to-Peer lending. P2P lending is the practice of loaning money to borrowers who typically don’t qualify for traditional loans. As the lender you have the ability to choose the borrowers and are able to spread your investment amount out to mitigate your risk. The most popular peer to peer lending platform is Lending Club.
I. Invest in annuities. Annuities are an insurance product that you pay for, but can then provide you with passive income for life in the form of monthly payments.
J. Invest in a REIT. REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REIT.
K. Invest in Index Funds. Index funds provide you with a way to invest in the stock market that is completely passive. For example, if you invest money in an index fund that is based on the S&P 500 Index, you will be invested in the general market, without having to concern yourself with choosing investments, rebalancing your portfolio, or knowing when to sell or buy individual companies. All that will be handled by the fund which will base the fund portfolio on the makeup of the underlying index.
L. Referral income from credit cards and traditional banks. SOFI is offering a $50.00 bonus to sign up for a money account. For every SOFI money account offers .20% APY (subject to change) zero monthly maintenance fees. SOFI is a pioneer to a new way of banking.
https://www.sofi.com/invite/money?gcp=c82e38f5-cace-4ff0-ae5c-047fbe40fd8f
