Passive Income Streams That Can Set You Up For Retirement

Passive income streams are sources of revenue that you can benefit from without too much effort – the money just flows in. Passive income that is genuine is considered the holy grail of personal finance. Not all passive incomes are the same, and some take more effort than others to start. But once started, it’s usually a consistent funnel of income every month.

Everything that is passive takes active energy to get it started. The best and only time to put in effort is when we are still young. Creating a sustainable passive income will be beneficial for you when you retire. There are a variety of passive incomes streams that you can create, which will allow you to be financially free so that you can travel and do whatever you please with your time.

Here are the passive income streams that can set you up for retirement:

1. Rental Real Estate

Investing in real estate is an excellent source of passive income. It is also considered a a great way to build wealth even after retirement. There are several options you can consider when you want to embark in your real estate business.

You can start buying rental properties such as commercial buildings where you rent out your space and collect a monthly income without doing much work. You just have to make sure that the monthly rent can cover the mortgage. Another option is to invest in real estate funds. If you do not have enough money to buy a property, invest part of the money to a Real Estate Investment Trust. It is a type of security that you can buy and trade like a stock and earn interest from.

2. Fixed Income Investment

Bonds and CDs are not the most exciting way to generate extra income because of low-interest rates. However, these types of investments can provide the ability to generate passive investment income and may start looking more appealing as interest rates gradually climb.

Not only that, but if you have a lot of money that you’re able to save up, then a fixed income investment might make sense. If you can generate a few thousand dollars a month with your investment, that might be more than enough for you to live.

3. Dividend Stock Investment

Dividend stocks can provide current income and have the potential to generate capital gains . Dividend income is entirely passive and has a low tax rate, which often times makes it appealing for many people.

You just need to have a compelling portfolio, and it will help you to generate revenue even in retirement. Dividend stocks are great because as the company releases earnings, you also get paid. Depending on how much you invest, dividend stocks can be extremely beneficial.

4. Franchises

If you are not yet quite ready to build a business from scratch, but you have the money to invest in an existing business concept, you can find a franchise. Franchises are nice because you don’t have to develop a business strategy from scratch since the business already exists.

By obtaining a franchise, you really just follow a manual or handbook that the corporate office gives you. Most of the time, the franchise will be a well known brand and people will already know what you offer. Just find a good location, hire people to run the business and collect the profits from the sidelines.

5. Peer To Peer Lending

A new radical way to invest money is through something known as peer to peer lending. Peer to peer lending involves you acting as the bank and giving someone money in exchange for interest that you collect. You can lend to others through lending cooperatives, tons of online platforms that exist nowadays.

With this type of a loan, you take the majority of the risk, but if the individual does come through and pay you back, you’ll collect a nice return on interest. The interest rates you can charge are higher than what you are likely to receive from a bond or certificate of deposit. You will also get your return on investment more quickly than you would with anything else.

6. Annuity

An annuity is an ultimate passive income generator. With the annuity, you have to invest a lump-sum amount to an insurance company and they pay you a set amount of money every month for the rest of your life.

For those of you who are really looking for an easy passive income stream for retirement, this is the ideal one. There is literally no work involved and it’s extremely passive.

Conclusion

Passive income streams should be started at an early stage. These income streams can give you financial independence even after you retired. In this post, I shared with you passive income streams that can set you up for retirement.