passive income is an important part of building wealth. It’s money you earn without actively working for it, such as rental income or income generated by a business in which you’re not actively involved. If you’re looking to increase your passive income and make over $10K per month within 2 years, there are several strategies you can use.
Start with a Solid Financial Foundation
Creating sustained, long-term passive income starts with getting your financial house in order. That means starting with a budget that helps ensure you’re paying off debts, making regular contributions to savings and investments, and cutting out unnecessary expenses. Once you have a firm financial footing, you’re ready to start exploring strategies for increasing your passive income.
Invest in Real Estate
Real estate is one tried-and-true option for increasing passive income. Investing in real estate involves purchasing residential or commercial properties and then collecting rent on those properties from tenants. You’ll benefit from the appreciation of the property value over time, too. As long as you select good investment properties and manage them correctly, you can enjoy months or years of residual income. This is especially true if you fund your investments with low-interest loans.
Leverage Peer-to-Peer Lending
Peer-to-peer lending is a process where people borrow money from individual investors instead of banks. It can create both short-term and long-term passive income opportunities. You can invest in loan programs directly or through platforms like Lending Club, Prosper, and Goldman Sachs Marcus. Generally, you can expect to earn interest rates ranging from 4-9%, depending on the quality of the loan. The key is to spread your investments across different borrowers to reduce the risk of default.
Create a Dividend Investment Portfolio
With dividend investing, you essentially buy shares of publicly traded companies and receive regular dividends on those shares. This is an easy strategy for creating passive income, and can even provide tax advantages as well. Meanwhile, you can also benefit from the potential long-term growth of the stocks you choose. To maximize your passive income from dividend investments, focus on stocks with higher yields, but also make sure to research the company and its history of dividend payments.
Invest in Digital Assets
Cryptocurrencies, tokens, digital coins, and other digital assets offer another source of passive income. With these investments, you can earn returns in multiple ways, including trading with leverage, sharing profits from pools, buying staking rewards, and more. Many digital asset exchanges also offer low fees and high liquidity, so you can get in and out of trades quickly. Just be sure to thoroughly research any digital asset you consider investing in.
Consider a High-Yield Savings Account
High-yield savings accounts are not typically considered a “passive” income, since they require an active contribution of funds. However, they do offer some of the highest returns available, usually starting at 1%. So, if you have savings that you don’t need immediate access to, it’s worth considering a high-yield savings account. Just remember to read all the fine print before selecting one, as there may be terms and conditions that limit your ability to withdraw funds.
If you’re looking to make over $10K per month in passive income by 2023, the strategy you use will depend on your risk tolerance and level of experience with investing. Taking steps now to set your financial foundation, investing in real estate, leveraging peer-to-peer lending, creating a dividend portfolio, investing in digital assets, and utilizing a high-yield savings account can all help you reach your goal.