What is Passive Income vs. Residual Income?
Passive income is earned from investments or activities without active involvement, while residual income is generated solely from passive sources like royalties.
1. Rental Properties
Investing in rental properties for passive income and wealth building through monthly rent from tenants, considering market research, costs, and management options.
2. Real Estate Investment Trusts (REITs)
Diversify portfolio with income-producing properties. Low-cost entry, various types available. Research financials, asset focus, and fees for informed decisions.
3. Dividend Stock
Invest in dividend stocks for regular income. Research companies based on price, yield, and performance. Be aware of market risks.
4. Peer-to-Peer Lending
Invest online through platforms like Prosper and LendingClub for higher returns than savings accounts.
5. High-Yield Savings Accounts
High-yield savings accounts offer low-risk, higher-interest opportunities to grow your savings. Research, compare institutions, open an account, and watch your money grow.
6. Certificates of Deposit
CDs offer low-risk, predictable returns for long-term financial success. Identify goals, compare types, choose wisely, consider inflation and interest rates.
7. Municipal Bonds
Municipal bonds are local government-issued securities for funding public projects. Research, choose wisely, buy through a broker, and build a tax-exempt diversified portfolio.
8. Treasury Securities
Safe US government investments with low returns. Available as bills, notes, or bonds. Can be bought directly or through a brokerage.
9. Corporate Bonds
Investing in corporate bonds offers income and risk. Companies raise capital with bonds. Assess financials, ratings. Diversify, expect losses.
Annuities offer guaranteed payment streams in exchange for lump sums or periodic payments. They come in fixed or indexed forms, with varying returns and costs.
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