So, you’ve got a full-time job that you love and enjoy, and you don’t have plans of leaving. But what happens if your full-time job isn’t enough to pay the bills? Maybe it’s covering the bills but just barely leaving no money to spare? This is where passive income can be very attractive. Passive income can sometimes be described as extra income or supplemental income. It is above and beyond what you’re making in your regular job. Now, what makes it “passive” is that it requires very little work or effort on your part to make this income; it’s not meant to feel like a job.
If you want to build passive income in 2023 but aren’t sure how or where to get started, these four tips are for you.
Dividend Stocks – Get Paid for Doing Nothing
If you’re looking for a way to make income without having to do anything, dividend stocks can be a great option. The one thing to note with this route is that it is the stock market, so there is risk involved. Just because you purchase stocks, doesn’t guarantee you’ll make a profit, but dividend stocks by nature tend to be less volatile than what growth stocks offer. The great thing about dividend stocks is that they pay monthly.
It’s worth doing your research and making sure you make a wise investment. If you need help deciding which stocks to invest in, try speaking to a professional investor that can advise you properly.
A Rental Property Can Bring in the Money
Another option is to invest in a rental property that will bring in income monthly. You don’t have to do anything in terms of work, you simply collect the rent. Of course, this solution can be easier said than done. You need to have the funds to invest in an income property, the rental market has to be ideal, and the place needs to stay rented at all times and not sit empty for weeks/months.
You may want to rent out a room or an entire floor in your current house instead of investing in a fully separate dwelling. This can be a great introduction to what it’s like to be a landlord, and from there you can grow.
Consider a High-Yield Savings Account
Then there are high-yield savings accounts. Passive income is the interest earned on your savings. For this to be profitable you need to have enough money to invest in a savings account, and you need to be sure you’re getting the highest interest rate possible. You won’t make a ton of money using this route and it will take much longer to build, but it’s still passive income in that you don’t have to work for it.
There are Some Negatives to Passive Income
It’s worth pointing out that there are some negatives to a passive income. Generally speaking, they take an initial investment. They also don’t tend to pay off quickly; instead, they can take time to start generating a profit for you. So, while they aren’t putting in much effort and work, you do need to be in it for the long haul and have the luxury of time on your side.
If you’re trying to pay a big, unexpected bill fast, this isn’t the solution. If you’re trying to build a nest egg for your retirement that is decades away, a passive income makes more sense.
If you’re looking to inject some cash flow into your financial portfolio for 2023, a passive income could be the solution. Each of these options could be ideal depending on your goals.
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