- I’ve been obsessed with growing my passive income streams, so I asked financial experts for help.
- They recommend investing in dividend-producing stocks, as well as rental real estate.
- They also recommend investing in learning new skills that you can use to earn money.
- Read more stories from Personal Finance Insider.
Over the past couple of years, I’ve become obsessed with learning more about passive income. I had a friend who was making twice what I was making monthly just through passive income from investments and a rental property. I knew that if I wanted to really elevate my finances and have the freedom to explore more creative projects that didn’t guarantee immediate income (like writing a new book or starting a new business), I needed to master passive income.
I started to find easy ways to make a little bit of passive income every year. I put my money into high-yield savings accounts and CDs with a good annual percentage yield. I also created income streams within my business (by selling products like courses and ebooks) that brought in passive income when sales were made.
But I knew I needed to find more ways to go from making a couple hundred dollars a month in passive income to a couple thousand — or more.
That’s why I reached out to financial experts to get their top tips to help me grow my monthly passive income. Here are the best and most helpful tips.
1. Invest in a dividend-producing portfolio
I’m a bit of a rookie when it comes to investing, but one of the things I’ve been curious about is making investments that produce dividends, which are distributions of some of a company’s earnings to shareholders.
Financial planner Patrick Healey says that one of the easiest forms of passive income comes from investing in a dividend-producing portfolio.
“This could be done by investing in dividend-producing stocks, ETFs, and mutual funds, or by investing in passive real estate investments (whether it be publicly-traded or private),” says Healey. “Assuming you select stable investment options, the reliability of quarterly or monthly income [can] supplement retirement or other life expenses.”
Finding dividend-producing stocks, ETFs, and mutual funds is at the top of my to-do list.
2. Invest in yourself
Since my go-to passive income strategy so far has been to create products to sell through my different businesses, I figured that could be a good avenue to continue to explore and focus on.
Zach Reece, a CPA, recommends thinking about more ways to continue to invest in yourself.
“Many passive income endeavors are activities that require some specific skills: photography, writing, crafting, real estate property management, and so on,” he says. “By investing in yourself and learning these skills, you’ll be able to improve the quality of the product or service that is producing your passive income.”
3. Invest in rental real estate
While investing in rental real estate isn’t something I can swing financially right now, it’s a future passive income stream that’s a goal of mine.
Healey recommends owning investment real estate as another popular form of passive income.
“A word of caution, though, in the current environment: Real estate values are very elevated right now, and maintaining discipline in buying decisions, as well as identifying creditworthy tenants, is essential,” says Healey. “This is a great way to grow wealth and take advantage of low [mortgage rates]. Lock in low, fixed-rate financing for the next 30 years.”
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