Last week, Primeland Development let you know why everyone needs a passive income. This week, we’re discussing the best ways to gain income through investment. To recap last week, Passive income is a stream of money that can be attained with little effort. It’s the direct opposite of active income, which requires you to trade your time for money – if you’re not working, you’re not earning.
Now, with passive income, although you need to put in the effort initially, once set up, you will receive the benefits long after the work you’ve done is completed. This frees up your time, gives you financial leeway, and improves your quality of life.
Today we’ll be discussing the various ways to can earn money in your sleep through investing.
A common way to generate income is through purchasing property, it’s a popular method because it allows you to build real estate value while gaining monthly rental profit. There are two ways you can use this method, either you purchase a property outright, or you utilise a mortgage to pay off the property. Either option is viable and depends on your circumstance.
The most important part of building wealth through property is to consider location & hands-off management. When it comes to location, keep an eye on property hot spots such as Orlando and ensure you utilise the growing markets. A Location with booming tourism often has a rich economy which, in turn, creates a fantastic rental market. An example of this is found in Sycamore Resort, Orlando, which is estimated to have an 80% occupancy largely due to its location.
The other option to keep in mind is property management, it’s called passive income for a reason, you want it to accumulate wealth without alot of work on your behalf. This is why hassle-free management is crucial. Property management services can often offer rental & leaseback programs which take care of the hard work for you, for example, maintenance, guest booking, cleaning, etc.
These types of programs allow you to take a backseat and trust that your investment is paying off, the end goal of most passive income is to free your time up.
#2 Dividend Stocks
Dividend stocks offer simple, consistent, and steady returns. You can enjoy a regular cash flow due to their price stability. Through investing in companies, you will receive a section of their profits that are funnelled back to you as dividends. The earnings you gather from this can either be cashed or reinvested.
The yields can vary significantly between companies, so it’s important that you choose ones that fit the dividend aristocrat label. These are companies in the S&P 500 index that not only “consistently pays a dividend to shareholders but annually increases the size of its payout”. A company is considered a dividend aristocrat if it “raises its dividends consistently for at least the past 25 years. (Investopedia, 2021)”
So if you’re unsure of how or where to invest, make sure you pay attention to the dividend aristocrat list.
#3 Purchase Index Funds & REITS
If you have the capital to invest but are looking for a method that doesn’t require much knowledge or energy, then this is a great option. Both of these options enable you to have a relatively low-risk investment for the long term & they are a popular option as they promise ownership of a wide range of stocks.
When it comes to index funds It’s important to take your time when deciding how to invest your money, this is because not every index fund is low-cost, and some not track an index as well as others. Luckily as we mentioned before, the S&P 500 list allows you to see hundreds of the largest US companies across all industries. This takes a lot of hard work and high risk away from the investor, as you can be confident in your investments.
When you invest in REITs you are investing in a company that owns or finances real estate and allows anyone to invest in portfolios of assets. Through investment, you are able to earn a share of the profit generated through the real estate investment. If you want to reap the benefits of real estate investing, but don’t want any of the hassles, this is a great option. The only negative is, you won’t own your own property – which many people value.
Passive income through any of the ideas we’ve shown here works, these are tried and tested methods that have been around for years and delivered many great results.
Are you ready to make money while you sleep and ensure that your future finances are stable? Primeland development is a high-class real estate company that specialises in returning high profits to investors. Our recent project, Sycamore Resort – offers 2 years of guaranteed rental income with just a 30% down payment.
We care about the investor’s journey and pride ourselves in making investments easy.