For many people, the year 2020 was fraught with economic troubles. Many businesses were forced to shut down, either temporarily or permanently, as a result of the epidemic. Layoffs have been common (in both small and large enterprises), and the cost of items has risen dramatically due to delays induced by rigorous lockout procedures. To bridge financial gaps, you’ll need to possess some top income-producing assets.
If this catastrophe has taught us anything, it is the importance of earning and accumulating money for difficult times. We are lucky that economists predict an economic rebound in the following year, which will certainly provide enough prospects for wealth accumulation.
This article will elaborate on several passive income producing assets to increase your wealth in 2021. While passive, these can afford you a prosperous future – particularly if you consider pursuing more than one concurrently.
Please continue reading to discover about the top 31 income-generating investments for 2021.
- Financial Markets
- Financial Instruments
- Income-Generating Real Estate
- 9. Renting Your Single-Family House
- 10. Renting Your Multi-Family House Out
- 11. Owning an Apartment Building
- 12. Mobile Home Parks
- 13. Short-Term Rental Housing
- 14. Real Estate Investment Trusts
- 15. Farmland
- 16. Timberland
- 17. Mineral Rights
- 18. Tax Lien Certificates
- Become an Entrepreneur
- 19. Own an Income Producing Traditional Business
- 20. Buy a Franchise
- 21. Start a Website
- 22. Create A Product or Course
- 23. Buy Royalties
- Rent Out Your Stuff
- Best Income Producing Assets Summary
Financial markets, as the name implies, are places where financial transactions and securities are traded. In reality, this means that investors and lenders with excess capital lend their money to borrowers in the hopes of making a profit.
Most economies rely on this sort of investment since, because of its fluid character, it allows money to go where it is most needed and benefits all parties involved.
1. Savings Accounts and Money Market Savings Accounts
While savings accounts are the simplest and safest asset, the income received from them is also the smallest. Low risk equals poor gain in this scenario.
Savings accounts, while offering somewhat better interest rates than traditional piggy banks or regular bank accounts, will not provide you with a consistent source of income.
A savings account is likely to be the most suitable income producing asset for you if you prefer a low-risk approach to your money, even at the expense of a higher earning potential.
Personally, I use an online bank for my money market savings account. The interest, my annual return, is much greater than my local bank. I use Marcus; take a look .
If, on the other hand, you’re looking for a greater income, you might want to choose one of the other possibilities listed below.
2. Certificate of Deposits
While CDs have been around as long as savings accounts, they do not have the same level of public appeal. In a documentary sense, CDs are similar to checks or land deeds, but in a saving sense, CDs are similar to a savings account.
A bank, credit union, or government entity, like a savings account, uses your invested assets for their own gain. They then give you a percentage of the money’s growth.
CDs, on the other hand, pay greater interest rates with a catch, unlike savings accounts. You won’t be able to access the money you invested for a set period of time and will have to wait until it matures. A contract determines the waiting times (maturity dates). A CD’s maturity date serves as both a source of protection for borrowers and a source of opportunity for lenders.
The amount of interest you earn is determined by the length of time you invest your money and your financial institution.
The following are the general rates for various investment maturities as of this writing:
- Interest rates on quarter (three-month) CDs range from 0.50 to 0.60%.
- Interest rates on biannual (six-month) CDs range from 0.70 to 0.90%.
- Yearly (one-year) CDs have an interest rate of 0.85 to 0.90%.
- Interest rates on 18-month CDs range from 0.85 to 0.90%.
- CDs with a biennium (two-year) term have an interest rate of 1.00 to 1.10%.
- Interest rates on triennial (three-year) CDs range from 1.15% to 1.30%.
- Interest rates on quadrennial (four-year) CDs range from 1.16% to 1.35%.
- Lustrum (five-year) interest rate: 1.30% to 1.35%
- Interest rate: 0.70% to 1.00% for a decade (ten years).
CDs are one of the investments with a low risk level. The Federal Deposit Insurance Corporation (FDIC) insures most CD transactions for banks in the United States. Credit unions are insured by the National Credit Union Administration (NCUA). Several nations, such as India’s Deposit Insurance and Credit Guarantee Corporation (DICGC) and the Philippines’ Philippine Deposit Insurance Corporation (PDIC), have similar institutions.
If you’re interested in purchasing a CD, contact your local bank or credit union for further information, or contact your government’s treasury agency. Make sure you talk to as many people as possible to find the best CD rates for you and your situation.
3. Interest-Paying Bonds
Bonds, like savings accounts and CDs, work on the same principle: a borrower pays you a certain percentage in exchange for your investment in their company. Your investment is a loan that must be repaid after the bond’s pre-determined time has passed. Bond yields (interests) are normally distributed to lenders through coupons.
What are the different types of bonds to invest in?
- Companies (Corporate Bonds) are a type of corporate bond.)
- Investment-Grade Corporate Bonds) are issued by conglomerates and other stable firms.)
- Junk bonds (small businesses)
- Treasury Bills / National Bonds are issued by the entire national government.)
- Agencies at a national level (Agency Bonds)
- Municipal bonds are bonds issued by local governments.)
- Foreign Bonds are issued by foreign persons, organisations, companies, and governments.
Bonds are less risky than other assets (such as equities) because they are technically loans. Bonds have a lesser chance of default. Bond prices have historically been less productive than stock prices, although being more steady.
Generally, bonds are a better option for people who want to make a significant return from money-lending but don’t want to take on too much risk.
If you want to invest in bonds, you should look into the best solutions for your risk tolerance and financial condition. You might even be able to find a falling angel with a yield of up to 6% if you’re lucky. The higher the yield on a bond, the higher the risk associated with the income-producing instrument.
4. Dividend-Paying Stocks
Who says operating a business has to be difficult? Stocks may be the most straightforward type of firm ownership.
A stock is a sort of instrument that shows the owner’s proportionate ownership in the issuing company. A share is the name for a stock unit, and a shareholder is someone who owns a stock. Stock ownership is not the same as owning a proportion of a firm; rather, it is similar to owning a portion of the company’s assets. This is because corporations are treated as legal human-like entities in most countries.
Shareholders and corporations are both protected from weaknesses and interventionism in this type of setup. A shareholder cannot control a corporation, and a corporation cannot control a shareholder.
Shareholders possess a percentage of a company’s assets, as well as a portion of its earnings. Dividends are paid to shareholders by many larger and more blue-chip companies. Dividends are paid to shareholders on a regular basis, such as quarterly.
Of course, corporate dividend rates differ, with conglomerates typically paying larger dividends to their shareholders, with some companies offering additional rates of up to 25%. Financial, real estate, and commodity stocks tend to pay higher dividends.
Stocks’ main flaw is their excessive liquidity, which makes prices in this income-generating asset more unstable. As a result, while big profit peaks might occur, significant price drops are also normal. This has been demonstrated in a number of previous economic bubbles.
The following are the four greatest stock market crashes in history:
- The Great Depression of 1929 was triggered by the stock market crash of 1929.
- The 1987 Crash, sometimes known as “Black Monday,” was a financial disaster.
- The Dot.com Bust of 1999-2000
- Great Recession of 2008 Crash
Because of the stock market’s almost unpredictability, shareholders must perform extensive study and make market predictions in order to make the best investing selections. Investors, on the other hand, can lessen their stock investment volatility by investing in index funds. These funds distribute revenues among several enterprises and spread risk over a diverse set of businesses and revenue streams.
The term “financial instrument” refers to a set of financial documents that are traded between two or more parties. One party is left with assets, while the other is left with obligations.
Financial instruments come in a variety of shapes and sizes, such as cash, derivatives, and asset classes. A financial instrument usually entails a series of smaller transactions. Smaller transactions allow money to flow into the lower classes and help to build economies from the ground up. Take a look at some of our financial instrument examples.
5. Peer-to-Peer Lending
For investors, peer-to-peer (P2P) lending is perhaps the simplest way to make money in fintech.
Individuals or groups finance other people in this type of lending. As the name implies, these lenders are unaffiliated with any government agency or official financial institution, and they lend money at their own discretion.
Lenders are typically acquaintances of the borrower with a trusting relationship. Because there is an emotional connection between the lender and the borrower, this type of peer-to-peer lending does not fare well.
If, however, you opt to lend your money to strangers for a greater return, online P2P lending platforms exist for this purpose. These websites are notorious for generating hype for a sizeable return on investments. Some of them include , , , , and .
Despite the fact that these platforms do not require borrowers to provide a credit score or proof of income, they follow strict procedures to protect both parties. Loans should be almost instantaneous, with interest and repayment time flexibility, according to private P2P lending platforms.
The majority of P2P loans are repaid within 36 months, with interest rates ranging from 5% to 15%. While the interest rate on this income-producing asset is better than what most banks can give, it comes at a price.
The borrower and the lender are both taking a risk with private lending. By allowing for non-repayment, both parties rely on the peer-to-peer lending platforms’ trustor intervention. The only way to avoid this is to keep in touch with both the borrower and the lending platform on a frequent basis.
Real estate crowdfunding is also worth considering if you enjoy real estate investing and peer-to-peer lending. It buys properties by combining social media and investment. An investor can buy equity in a property and become a shareholder through real estate crowdfunding. The technique assists businesses in gaining access to funds and an investor group that they would not have been able to contact through typical capital raising methods.
6. Structured Settlement
A structured settlement is a method of settling an injury case in which the aggrieved party receives reparation money in installments rather than in one lump sum.
A structured settlement was first popularized in Canada, but it has since spread to the United States and other Commonwealth countries. Rather than being sued or losing a large sum of money up front, businesses commonly employ this approach to settle negligence cases.
While this is a dependable source of income, it needs the individual to be an aggrieved party in order to collect compensation, which means that someone else must inflict hurt on you to the degree where a strong legal case can be built.
Another topic of contention is the defendant’s or claimant’s potential dishonesty. Someone may falsely claim to have been harmed, while others may provide the claimant with unfairly low compensation.
However, as an investor, you can also enter into agreements. Investors can lend money to a defendant so that they can make a lump-sum payment to their victims. In exchange, the offender must repay the investment in installments, plus interest. Structured settlements have the potential to become a profitable asset.
Annuities are agreements between a person and a financial organization. After paying an initial amount toward the annuity, the individual can receive interest-bearing installment payments from the institution.
Securities, pension funds, health and death benefits, spousal coverages, mutual funds, and structured settlements are all examples of annuities.
The majority of annuities on the market, whether offered by government organizations or private businesses, are adjustable and flexible. Furthermore, many annuity products have lower taxes or no taxes at all.
When claiming funds, annuity installments are preferred to lump-sum claims, which can result in significant taxable income and expenses. If you win the lottery, for example, you can choose between receiving a lump sum payment right away or receiving annuity payments over time.
On the other side, the time and money required for an investor to obtain all of these services can be costly. Understanding the terms and costs connected with an annuity investment is essential.
Despite this, annuities are still a popular investment option for many people.
8. Writing Covered Call Options Contracts
Although this method may appear complex at first, it is a reliable income-producing asset for shareholders with almost-static equities (low volatility) who are willing to take a low-risk approach.
A covered call is an options strategy in which two parties trade an underlying stock and a related options contract.
Allow us to set up a hypothetical circumstance to further explain:
The trader (the original shareholder) must first have at least 100 stock shares and a corresponding call option before engaging in a covered call.
The agreed term of the contracts impact and the equivalent stocks striking price, which should be greater than its current price, are the two primary components of this call option.
A buyer pays a price for this call option. After that, one of two things happens: either the stock’s value rises over the strike price or it does not.
If the former occurs, the shareholder is compelled to sell the stocks at the strike price value, and stock dividends will cease to be paid. If the latter occurs, the shareholder retains both the stocks and the call option premium payment received from the call option buyer at the outset.
Furthermore, if the shareholder’s shares rise in value but not beyond the strike price, the shareholder can potentially earn income from both the call option payment and dividends.
This may appear complicated at first, but if you understand it, you can utilize it to earn money while doing almost nothing.
Income-Generating Real Estate
Our next top income producing asset is the ever-faithful real estate market. Since the Industrial Revolution in the 19th century, many people have become wealthy by exploiting the real estate market.
Real estate can be upgraded, left to appreciate, and then used throughout the period of capital appreciation. Because real estate is a tangible (or hard asset) rather than a liquid asset, it is less sensitive to price swings in the market.
Real estate investing can be done in a variety of ways, and the possibilities are endless. Continue reading for some of our best tips on how to make the most money in real estate investing.
9. Renting Your Single-Family House
Most real estate investors’ go-to strategy is to invest in rental properties. Over the last decade, renting out your single-family house has shown to be successful, and it is simple to maintain without the help of a professional. Isolated homes, townhouses, twin houses, rowhouses, and bungalows are examples of single-family residences.
Renting a single-family home presents a reasonable workload because the renter is responsible for utilities, furniture, and appliances. Furthermore, because single-family houses appreciate at a faster rate than other properties, the revenue generated from renting them is generally higher.
In contrast, essential services such as gas and electricity are charged to the landowner in multi-family homes (described below). Renting out multi-family properties usually means more money, more management, and more time. Yet, as a total return, the financial results may be better.
10. Renting Your Multi-Family House Out
Multi-family houses are buildings that can accommodate two to four families. Apartments, townhouses, condos, duplexes, and quadruplexes are examples of multi-family housing.
As a result, the rental revenue from these properties can be up to four times that of a single-family home. It has the potential to significantly increase cash flow.
Because jobs may be aggregated and completed in bulk at one site, maintaining a multi-family house may be easier than maintaining several single-family residences.
These rental properties, on the other hand, have a high upfront capital cost. The cost of establishing or purchasing a duplex, triplex, or quad necessitates significant dividing and restoration costs. A multi-family property purchased with loans and covered by home insurance would make it easier to handle and track liabilities.
Multi-family houses are a source of concern since they generate an undiversified investment portfolio, making the investor more vulnerable to location difficulties than investors with a more diverse real estate portfolio.
Multi-family dwellings, on the other hand, tend to dominate the market. This is visible even during economic downturns, when families sell their homes and invest in multi-family rentals in order to save money. That happened most recently during the Great Recession of 2008, when single-family home prices plummeted. As a result, the value of duplexes and triplexes increased.
11. Owning an Apartment Building
Are you dissatisfied with your small earnings? Do you want to take real estate investing to the next level? Apartment buildings could be your best source of income!
Apartment buildings are well-known for the rapid growth of their cash flow. While single-unit apartments enhance income on a certain plot of land, a duplex or triplex can provide three times the rental income on the same plot of land. An apartment, on the other hand, can provide ten to one hundred times the rent. Even a small increase in your monthly rental might add up to a large rise in your net worth.
In addition, huge complexes generate more various income in real estate than modest accommodations. Parking fees, pool rent, vending machines, in-house cafeteria, gym membership, and laundromats are all examples of miscellaneous income. Taking advantage of the apartment complex’s amenities can help you earn money in addition to your rent.
When purchasing an full apartment building, on the other hand, several aspects must be considered due to the big initial investment. Appearance, accessibility, location, and other criteria all play a role in the initial real estate investing decision.
Everything must be constructed in such a way that people will want to move in and profits will be maximized. After all, constructing a large structure necessitates a large sum of money, which should be directed toward maximizing the return on investment.
Other liabilities, such as legal and financial liabilities, are also more prevalent in apartment complexes. Governments typically pay high taxes on larger infrastructures, and owners are typically held liable for any mishaps that occur. Big structures are also scrutinized by officials and are more likely to be subjected to lengthy processes and bureaucratic permits.
To avoid these issues, apartment building management is required. Outsourcing apartment management is generally recommended due to the benefits of their knowledge and experience.
Other options include hiring security guards and installing closed-circuit television cameras throughout the structure.
Overall, the Great Recession has demonstrated that apartment investing is a reliable source of consistent income. With proper planning, preparation, and upkeep, you may quickly increase your wealth with an income-producing apartment property.
12. Mobile Home Parks
Warren Buffet, the legendary investor, once made over a billion dollars by investing in mobile home parks. This fact astounded many people, revealing mobile home parks as a new flourishing real estate sector.
Once seen as a laughingstock in the real estate sector, mobile trailer houses now house 5% of the population in the United States, or over 20 million people. In the United Kingdom, Germany, the Netherlands, Australia, and New Zealand, manufactured housing is also well-established.
Mobile homes are becoming increasingly popular around the world. With the rising costs of housing and land, many low- and middle-income people rely on these less expensive and easier alternatives.
However, the money is in the land, not the units. The majority of mobile houses in the United States are owned by the tenants. The mobile home is set up on the property of the park’s owner. Each mobile home owner pays a monthly land rent to the park owner.
There are numerous advantages to this setup for a landowner (or should I say park owner).
For starters, buying a mobile home park is less expensive than buying a traditional home. According to one Forbes column, a typical home costs $100,000 per household, but a piece of land of the same size costs only $10,000, a tenfold reduction.
Second, the proprietor divides a large plot of land into smaller ones to accommodate many mobile home units. When it comes to balancing the budget, it’s similar to how apartments do it. As a result, vacancies do not have a significant impact on your cash flow because your revenue is spread across numerous plots of property.
Most park owners just look after the land, not the units or buildings, therefore mobile home parks require less upkeep.
Mobile home parks, like apartments, must first locate a renter willing to rent the land and build a house in the park. Once a mobile home is placed in the park, a steady income is almost guaranteed.
Citing the same , the author says that ‘it can cost a tenant $5,000-$7,000 to move their home out of a park.” 98% of mobile homes will remain in the same location after the second year. A large percentage of homeowners never expect to sell their homes. 75% of owners expect to stay in their mobile homes for five years or longer.
Convenience and low hazards are two advantages of having a mobile home park. This is why an increasing number of Americans and Europeans are putting their money into an asset class that is both appreciating and producing income.
It’s a fragmented sector, with mom-and-pop-owned mobile home parks strewn across the country. Before you invest, do your research!
13. Short-Term Rental Housing
The tourism business is growing by the day (excluding 2020, of course). Travel and related expenses contributed $2.9 trillion to world GDP in 2019, approximately equal to the entire Italian GDP.
The demand for short-term rentals rises in direct proportion to the increase in travel.
In 2019, the industry leader, , hosted more than 2 million accommodations per night globally. Airbnb’s initial public offering (IPO) was worth $100 billion, one of the largest IPOs in 2020. Its nearest competitor, , also hosted hundreds of thousands of transactions between homeowners and tourists.
Both of these services (which we highly suggest) rely on homeowners who are prepared to rent out their homes for a short period of time. This is the concept of short-term rental housing; instead of staying in hotels, vacationers rent out authentic homes for a few days.
Many people have become wealthy as a result of the aforementioned passive income setup. While short-term rentals are less expensive than hotels, the rents are higher than long-term, regular monthly, and annual rentals. This is an chance for homeowners to rent out their properties to high-paying clients for a short period of time. After a continuous supply of temporary customers is established, landlords can replicate long-term renting at lower rates.
Owners can adjust their rental rates whenever a customer leaves their lodging because the renters are only there for a short time. This gives business owners more control over their operations and allows them to be more flexible and experimental with their rates and amenities. With long-term housing rents, when renters are more inclined to complain about and negotiate rent increases, this would be difficult.
The final advantage of short-term rental property is one that cannot be bought. It is the cultural experience and relationships formed by the renters throughout their brief stay. The encounter can leave an indelible impression on both the owner and the client.
The location of your property could be a disadvantage. Your cash flow will be lighter in the summer months if it is located near a seasonal sport, such as a ski resort. Seasonal peaks and troughs may occur in your income-generating asset.
There may also be other small drawbacks, such as obnoxious tenants or legal constraints. Even so, you should be able to make money from your short-term rental if you list your home on Airbnb or Vrbo.
If you’re managing the short-term rental housing yourself, then consider buying your primary residence nearby. We have a guide of lands that are free, which may produce a greater return on investment.
14. Real Estate Investment Trusts
Many investors aspire to be landlords or even moguls with a diverse portfolio of properties, but they lack the skills to repair leaking pipes, replace damaged door hinges, or clear drains or cesspools. Playing Monopoly makes it easier to become a real estate mogul.
Your wishes have been granted! In a way, yes. Real Estate Investment Trusts (REITs) are a type of real estate investment trust.
REITs are real estate investment trusts (REITs) that invest in a wide range of sustainable real estate holdings. Anyone can invest in REITs. It’s one of the top income-producing real estate assets where the properties are managed by someone else.
In the United States alone, 87 million people are projected to be investing in REITs, with a gross market value of up to $3 trillion.
REITs, like stocks, do not own any real estate. Instead, they fund structures such as homes, apartments, shopping malls, hotels, warehouses, and cable towers, among other things. REITs have the greatest significant competitive edge over other money-making enterprises because they are widely diversified.
Retail, residential, healthcare, office buildings, mortgages, and others beyond the five categories stated above are the most common types of REITs.
REIT mutual funds and REIT exchange-traded funds (ETFs) are stock market investments that are publicly traded. Investors receive a portion of profits in the form of cash dividends, which are usually paid out every month or quarter.
With real estate in foreign nations, there is, of course, the possibility of high taxes and fees. Certain REITs are nonetheless vulnerable to economic instabilities and an overstock bubble, even if they are well-diversified. Mall and hotel REITs, for example, underperformed during the COVID crisis, but industrial and warehouse REITs gained.
REITs, in general, are one of the best investments you can make!
If directly planting crops is not the career for you, then go for being a haciendero! (a farm owner)
According to the , 39% of all farmland in the United States is rented or leased. This figure is even higher in other agricultural countries, especially in Southeast and South Asia.
Smart investors can exploit this to diversify and enhance their portfolio by investing in this unusual real estate sector.
Farmers who rent land can put their money toward other important components of their business, such as seeds, irrigation, fertilizer, extra labor, and technology. In addition, farmland owners can get regular rental payments.
Agricultural land leasing and sale prices, on the other hand, are not to be taken lightly.
Farmland in Canada’s Okanagan Valley is valued $103,000 per acre. In Rhode Island, where the land is sold for $138,000, the value rises. And if you think that’s a lot, consider that the farms in Almeria, Spain, cost more than those in Rhode Island, which cost roughly $213,000 per acre.
What is the expected rate of return on Farmland?
If rented, the typical monthly return ranges from $50 to $250 per acre. The most costly farms in Europe, on the other hand, rent for 791 euros per hectare each month, or approximately $2400 per acre.
The most serious issue that agricultural landowners confront is likely the government’s close inspection. Especially given the fact that land reform is still a divisive societal topic today.
If owning farmland isn’t enough, it could be time to venture into the timberland industry!
The timber industry is one of the largest in the world. In 2018, the sector earned in the United States, employing almost a million Americans. This business is also profitable in the Northern hemisphere (mainly in Russia, Sweden, Poland, Austria, and Finland) and the tropics (Brazil, Indonesia, and Malaysia).
Because timber takes a long time to develop, this kind of revenue requires a lot of patience. Yet, the wait is worthwhile, particularly if you are already receiving the benefits.
Softwoods, such as cedar, are less dense than hardwoods like pine and redwood, but they grow faster. Within a decade or two, the majority of trees are ready to be harvested. Hardwoods (maple, oak, and walnut) on the other hand, which are denser, take 25 to 100 years to develop.
Several of these can also be used as a source of revenue. Maple syrup, made from the sap of the maple tree, is a popular breakfast item in the West. While waiting for the trunks to mature, the product has a large market and can be sold.
Timberland has different values depending on where it is located. Bare land costs roughly $160 to $200 per acre in the Pacific Northwest of the United States, where timberland is among the most expensive. In addition, planting costs range from $120 to $180 per acre. Prices range from $500 to $2000 per acre when these are planted with mature trees. Some high-end locations have prices as high as $100,000 per acre.
The timberland business is expected to outperform the equities of the 500 most lucrative corporations in the United States, according to projections. To avoid litigation and other farming difficulties, landowners must follow existing environmental regulations and limits.
17. Mineral Rights
Mining rights are another lucrative sector; in 2018, the worldwide mineral mining industry was valued at $77.8 billion. Mineral rights, on the other hand, are significantly more intricate than farms and timberlands.
First, there is a contrast between government-approved and unapproved rights. Surface rights and mineral rights are the two types of rights. Surface rights give the owner the ability to alter the ground’s surface. Mineral rights provide the owner ownership of the minerals and resources discovered beneath the surface.
Second, mineral rights are governed by different rules in different countries. Any private entity can hold minerals on territory where they have mineral rights in countries like the United States, Finland, and Sweden, as long as they secure the necessary permits. This is in contrast to other countries such as England, Mexico, and the Philippines, where minerals and other natural resources are constitutionally protected.
This profitable asset class will only work in countries with fewer restrictions on mineral rights, such as those that enable private residents to explore and mine their own territory.
After a person’s mineral rights in a piece of land have been established, he has two options:
- Mine themselves
- Offer your permission to a mining business (as long as you get royalties)
Given the prohibitive equipment costs for the average investor, the first method is quite costly for many. For most investors, the second strategy is likely to be the most effective. It doesn’t require any upfront funds and allows them to generate income from the ground up.
For the mined minerals on his land, a lessor (landowner with mineral rights) might demand either an upfront payment or deferred royalties from the lessee (mining contractor). However, both of these are lucrative undertakings, with royalties ranging from 2% to 12% in some cases.
Accepting an continuous royalty, on the other hand, comes with two major risks: rising oil prices and a reduction in the amount of mined material. Because oil prices fluctuate, royalties earnings fluctuate as well. Furthermore, the amount of money received is determined by the amount of mined content.
On the other hand, if the up-front pay is less than the proportionate and acceptable ratio of outflows, lessors may forfeit potential earnings.
Yet, if you hold mineral rights or inherited mineral-rich land, this is the greatest strategy to optimize the asset’s return.
18. Tax Lien Certificates
Municipal governments are always seeking for methods to get rid of as many liabilities as they can, including property taxes. Tax lien certifications arose as a result of this.
A tax lien certificate is essentially a declaration of interest in real estate, generally a house. It is a method by which the government collects unpaid property taxes. Tax lien certificates are often offered to investors through an auction process.
When a property owner fails to pay property taxes, a tax lien is placed on the property. Once the debt is paid in full, this restriction is removed. If not, people who are willing to take over the tax payment are offered these liens. The property owner has effectively mortgaged his home to the lien buyer in this situation. The tax lien comes before the mortgage, thus the owner must pay it before selling their home.
This approach is used by savvy investors to obtain high interest rates by paying other people’s taxes or receiving low-cost, unattended assets. Tax lien certificates are legal in 29 states, with average interest rates ranging from 5-12%, while some cities and towns charge up to 36%.
While this income-generating asset appears to be promising, there are a few drawbacks to consider. One is the property’s current status. It must be confirmed that certain property owners are attempting to avoid paying their property taxes.
Changes in political, economic, and societal norms can also affect properties that have been foreclosed due to tax liens. Furthermore, private entities hunting for properties to flip for a profit, such as hedge funds, REITs, and real estate businesses, raise the bar in auctions. Small-time investors will find the market nearly impenetrable due to the cash-paying institutions.
It’s a good idea to do some research about the property before bidding at the auction. If at all possible, take a virtual tour of the house, stop by and look through the windows for damage or prospective concerns, and tour the neighborhood to ensure that you are not overpaying in comparison to other homes in the area.
Become an Entrepreneur
Who says starting a business isn’t profitable?
Several entrepreneurs began their businesses as basic entrepreneurial operations. Learning the fundamentals of money management will help you along the road.
Entrepreneurial businesses are the foundation of local, national, and international economies. Based on a study commissioned by the , there are around 582 million entrepreneurs in the world or approximately 7.5% of the global population. Most billionaires are self-made and started as a simple yet savvy entrepreneur.
Also, for those introverts, some of the businesses below are perfect occupations that need you to work alone.
Thus, if you’re wondering if being an entrepreneur would make you wealthy, the answer is an emphatic yes!
19. Own an Income Producing Traditional Business
As the name implies, they are business concepts that have stood the test of time and will continue to do so in the future. These enterprises may appear and sound unappealing, but they are unexpectedly profitable income generators.
In fact, George Soros, one of the world’s foremost philanthropists, once said that ‘great investments are boring.’ Richard Ruback and Royce Yudkoff teach courses on how to grow a small enterprise or startup. Chinese billionaire applied to 30 jobs to establish a small company until building his China business empire.
However, due to experience, economies of size, and capital, smaller businesses are more vulnerable than larger organizations.
Unlike huge organizations, many new small businesses rely on a small pool of clientele to survive. To boost revenue, this business risk necessitates immediate and effective diversification of the consumer base.
Another issue is the company’s reliance on its founder. The founder is the most important person in most small businesses. Unless employees or other co-founders are scrupulously involved in day-to-day deals, their absence paralyzes the entire organization.
Finally, money and beginning capital are important considerations because they are required to manage and fund everything from raw materials to labor, production, transportation, compensation, and other expenses.
Fortunately, some enterprises are simple to establish as a first-time income generator. These are some of them:
Start a carwash business
These are some of the easiest to start and most profitable example of entrepreneurial business. A typical car wash requires a conveyor belt, cleaning materials, water supply, vacuums, workforce, and the area where cleaning would be done. The type and style of cleaning differ depending on the size and nature of the customer’s car.
How much money can you make with a carwash business?
The annual gross income for a carwash firm is estimated to be $139,000, with an annual profit of $86,531 for the owner.
Start a Passive Income Laundromat
Laundromat shops are common in high-income countries, and you can find one in almost every area. A laundromat does not require numerous staff because one employee may manage business operations from within the store. Employees aren’t even required at certain self-service laundromats.
A typical self-service laundromat needs a set of automated washing machines and dryers, as well as soap, bleach, water, and other basic laundry supplies. The average self-serve laundromat can earn between $100 and $1,500 per day, according to Laundromat Resource.
Start a Vending Machines Business
The majority of vending machines do not need to be supervised. The owner must buy a few units and install them in high-traffic areas where passers-by are likely to observe or visit. When supplies run out, these must be replenished. A typical vending machine might make at least $5 per week, with weekly earnings exceeding $100.
They are extra infrastructures set aside to hold the products, equipment, and personnel of other people or organizations. This company requires a facility that has appropriate room, security, and climate control for the materials it stores. The average annual income of a self-storage business ranges from $361,000 to $798,800.
Specialty Cafés and Bistros
Business-people who aim to establish this type of business must have basic knowledge of cooking and serving customers. They must also have a clean, customer-friendly, and broad area to operate. A specialty cafe business is considered small to medium-scale, employing at most 20 employees. Moreover, these businesses need significant startup capital for materials like raw food materials, utensils, appliances like refrigerators, furniture, and air-conditioning. The earnings of cafés and bistros vary wildly depending on food served, number of customers, and establishment capacity, although net income margins play from 60-85%.
20. Buy a Franchise
One business concept flourished in the post-World War II world until it dominated today’s world: franchising.
Franchises provide a number of benefits, the most important of which is brand recognition. In a world when the market is already flooded with a variety of firms, companies with a strong brand identity are more likely to survive. It’s because people trust the things they’re used to, from employees to local officials. Borrowing a business name, trademark, and logo provides a kickstart and leverage for earnings and growth for a new business.
These well-known brands are already experts of their trade, with a proven revenue-generating system in place. Starting a franchise is a more secure approach to thrive if you’re a business owner who wants to grow quickly and safely. It’s even better if the parent firm provides training and observation, which can help you grow as an entrepreneur while also increasing your commissions.
Leading franchises are frequently scouring the country for the greatest places to start a business, giving your branch the highest chance of success. Following a pre-determined plan and formula, on the other hand, prevents business owners from adding their own unique touches to their branches. Franchises are adamant about putting profitability and investment security ahead of originality and creativity.
Different brands also have other requirements and standards. For example, KFC has startup costs that range from $1.2 million and $2.5 million, a McDonald’s branch is worth $1 to $2.2 million, or you can start a Subway at around $116,000-$253,000. Some franchise brands might also require you to have a minimal amount of assets and experience as ‘insurance.’
Of course, buying an existing franchise is one of your best bets if you want a guaranteed and immediate victory!
21. Start a Website
Websites are one of the simplest methods to make money in today’s digital age!
Despite popular assumption, having a high-traffic website does not mean you’ll make more money from ads. The most important aspect of online advertisements is clicking. A website that receives 1,000 clicks per day can earn up to $450 per month.
Earnings are, however, not only from advertisements. As in real estate, site-flipping is also gaining traction these days. Investors purchase domains hoping that clients purchase them—platforms like host these kinds of site-flipping website transactions.
Yet, the biggest downside of adverts and site flipping is the minimal likelihood of immediate profit. Site-flippers must conduct thorough study into the websites that others will want to acquire for a premium in order to increase their chances of making more money. Investors desire a website with a lot of visitors, a lot of income, a lot of traffic, a lot of traffic sources, a lot of income, and so on.
Our Surviving the Great Depression guide talks about starting your own business and controlling your own destiny; have a side-hustle to make extra income and insulate any downturns.
22. Create A Product or Course
If you’re unsure about the reliability of flipping websites or ad placement, generating digital items and courses can be a better fit.
The market for digital products and courses is expanding as more people consume digital content every day. There are no limits to innovation, whether it’s educational, entertaining, or both!
Electronic books, online courses, instructional videos, podcasts, webinars, lectures, charts, and music are some of the most popular digital products these days.
As of January 2020, the top e-books on were novels, books for kids, and biographies. The top podcasts of 2019 are centered around entertainment, stories, and instructional shows. Of course, you could innovate aside from these genres — after all, the more focused your target audience is, the higher chance you will earn something out of it.
Another advantage of generating digital products is that everyone can do it: men and women, students and graduates, employees and non-employees, young and old. You only need patience, time, work, and the assurance that these digital items will meet the public’s needs. In other words, you can even start an online course without any money.
23. Buy Royalties
If you’re a creator, you might consider licensing your work to earn royalties, and this income-generating asset could even support you for the rest of your life!
Are you on the fence about this option? Consider the Happy Birthday Song. The song’s license has passed hands over the years, despite the fact that it was written by the Hill Sisters in 1893. Warner Chappell, a music holding company, now owns the royalties rights. And their earnings aren’t insignificant! The song is predicted to make $2 million each year and $50 million over the course of its existence. Everyone who uses it in a film, series, or other kind of media must pay Warner Chappell or face legal ramifications.
Stephen King’s novels are another example of royalties being purchased. The author, who is best known for novels such as It, The Shining, and In the Long Grass, has a net worth of $400 million, the majority of which comes from royalties from books that have been adapted into films.
If you want to imitate these individuals’ success, you can scour for royalties online available for people to buy at .
Yet, just like with digital items, investors must assess these royalties to ensure that they will retain their worth in the future.
Rent Out Your Stuff
Why not rent out some of your stuff if you have it lying around? Are you aware that you are surrounded by some of the most profitable assets?
You can rent out your stuff to drastically cut expenses, or it’s an excellent way for a beginner income producing method.
Enabling others to rent your equipment transforms your assets from liabilities to passive cash cows!
This shared economy culture promotes product conservation and reusability, which leads to societal and behavioral changes. At the end of the day, this is also good for the environment.
The good news is there are multiple platforms available on the market that can help you Rent out your belongings on the internet. and make money fast — some of these can be found below.
24. Rent Out Your Car
If I purchased a new vehicle. that is spending its time sitting in your garage due to your travel schedule, let others borrow it for a price. Instead of being a constant liability, your car is now turned into a profit-making machine!
Formerly, people would only lend their cars to friends and get payment based on a verbal arrangement. This type of purchase, however, does not maximize your earnings potential. The emotional link between the lender and the borrower is removed when using an online automobile rental service.
Fortunately, technology has a solution for everything. If you’re thinking of lending your car to someone you don’t know in order to make some additional cash, online auto rental apps and platforms are already accessible and proven.
A popular car sharing online platform is . Its peer-to-peer car sharing has attracted millions of members. As of its recent update, Turo hosted more than 14 million members and 450,000 vehicles. Turo also has positive reviews from respected organizations, like CNN, USA Today, The Washington Post, and Bloomberg.
Turo takes a quarter of the profit from each transaction, but that covers insurance and app listing fees. The average monthly income for Turo car lenders is $720, though this varies based on the car model and how frequently it is lent.
The cars that are eligible to be rented on Turo must meet the following criteria:
- The automobile must be registered in a state other than New York.
- Insurance Make sure you have the necessary insurance coverage.
- Fewer than 13 years of age
- Fair market value is estimated to be less than $150,000.
- Less than 130,000 miles on the clock
See Turo for more details about vehicle .
Another major car-sharing platform, , also operates on a similar principle. The average car lenders in Getaround make $800 a month, but this varies based on the car model and how frequently it was lent.
Other peer-to-peer car-sharing service apps and sites include and .
These platforms are incredibly versatile and customizable to your wishes, in addition to the benefit of making extra money from underutilized cars. Yet, as the automobile owner, you must still manage orders, requests, hand-offs, and other such activities, even if they take up very little time.
See our guide on Where can I hire a manual car?.
25. Rent Out Your Land
Maybe you have a piece of land that hasn’t been designated for real estate. You may possibly make it available to campers!
You can register at (previously known as Glamping), an online booking platform for outdoor stays. The platform connects visitors who are keen on an outdoor vacation with landowners.
This is a win-win situation: campers get a comfortable and relaxing night, and you get paid without having to leave your property. For an additional price, you can provide tents, treehouses, tables, chairs, mats, and other outdoor properties to your campers.
Revenue fluctuates in price, much like any other platform, depending on the host’s location and features. Every transaction wired via MangoPay several days after the renting is subject to a 7% service fee. It’s worth noting that HomeCamper doesn’t force its users to submit and verify their personal data. It is up to the host to speak with their guests and check their identification and trustworthiness.
Furthermore, by agreeing to host campers, you agree to bear all losses incurred during the guests’ stay, including the costs of repairing broken equipment and replacing lost or destroyed items. It is recommended that hosts have suitable and comprehensive insurance to protect themselves in the event of an emergency.
You may want to consider speaking with a real estate attorney or your accountant about whether to Consider forming a limited liability company (LLC) for your home business..
26. Rent Out Your Parking Spot
Congestion is a major problem in many cities throughout the world, and one of the main causes is inappropriate automobile parking.
Automobile owners frequently park their vehicles on side streets and sidewalks, clogging up spaces meant for moving vehicles and pedestrian crossings. On the other hand, there are many empty parking lots, particularly during the day.
However, renting out your parking spot could kill two birds with one stone. Vehicle owners who want to park their cars safely generate passive income for parking space owners.
One of the best options to do this is by using . It is self-dubbed as “the Airbnb of Parking Space Rentals.” CurbFlip is a website that links parking space owners to car owners with the end goal of parking vehicles safely and legally.
The site is adaptable, allowing you to rent your parking place on a daily, weekly, or monthly basis. It also allows you to host many appointments at any given time during the month. Owners choose the parking fees, but CurbFlip collects commissions ranging from 5-16%, plus an extra 3% for PayPal purchases. These flexi-rates are especially handy when there is a great demand for space.
To ensure security, both the tenant and the lender must fill out a personal information form. Communication and payment are also made virtual, efficient, and convenient.
CurbFlip, like HomeCamper, advises parking place owners to acquire sufficient insurances because CurbFlip does not assume responsibility for accidents or unfortunate events.
Besides extra income, a profound benefit of parking space renting is it makes your house ‘look more secure.’ A car parked in a house’s garage gives the appearance that a resident is inside, something that can deter criminals. It’s like putting an ADT sign in your front lawn to tell criminals to look somewhere else.
On public parking lots and side roads, renting out your parking spot protects you from theft, vandalism, and destruction.
CurbFlip’s closest competitors are e, , and , just to name a few parking spot rental apps.
27. Rent Out Space in Your House
While purchasing a self-storage facility can yield you anywhere from $361,000 to $798,800, it does involve a significant upfront capital investment.
The good news is that there is another way to make money from home that is similar. Your home’s unused space may be your finest source of revenue.
is a website that allows you to do exactly that. The nicest aspect about utilizing Neighbor is its dedication to security and customer service.
The organization offers a $2 million Host Guarantee, which is a type of insurance that protects hosts and clients against liability and property damage.
Furthermore, hosts decide who’s belongings will be stored in their space, assuring security and safety.
In the meanwhile, all of your purchases are processed by Stripe and transferred immediately into your bank account. Regardless of whether the renter shows up or not, the platform will compensate the owner as long as the room is rented.
A vacant closet can earn you $384 per year, a spare driveway can earn you $1536, a garage can earn you $2332 per year, and renting a basement can make you $3108 per year, according to the Neighbors website. Isn’t that fantastic?
Even CNBC compares Neighbor to an Airbnb for your belongings.
28. Rent Out Your Recreational Vehicles (RVs)
Even during a pandemic where travel is restricted, the sales of recreational vehicles (RVs) are rising through the roof. In fact, in July 2020, the reported that more than 40 thousand RVs were sold — the highest month since 2018.
RVs are becoming increasingly popular in the Western world due to their convenience as both housing and a vehicle in one package.
Nonetheless, due to their infrequent use prior to the pandemic, RVs had become a liability for many families. The majority of RVs are kept in garages for the majority of the year.
If you want to profit from RV, you can rent out your recreational vehicle on sharing sites. In the United States, the leading site is , while dominates the Western world.
Outdoorsy was the first peer-to-peer RV rental platform, and RVShare was the second. Neither RVShare nor Outdoorsy charge a fee to list a vehicle. Each site that rents RVs by owner charges a 20-25% commission and other fees.
Users, particularly RV owners, can set their own prices based on the vehicle’s qualities and specs.
Both platforms provide similar protections for renters and owners. RVShare assesses and aids its tenants in avoiding mishaps. Similarly, Outdoorsy conducts random checks to ensure that renters adhere to driving laws on a regular basis.
Both sites also provide insurance and liability coverage in the event of unforeseen events or calamities. Collisions, fires, vandalism, earthquakes, and theft are just a few of the things covered by RV insurance for renters. The insurance might be worth up to a million dollars.
Owners of RVShare and Outdoorsy claim that over the course of a year, they can make $60,000 and $32,000, respectively, through their respective sites. Other considerations to consider are the size of the vehicle, the technology involved, developments, internal amenities, and how frequently you rent out your RV.
Both RVShare and Outdoorsy are fantastic ways to turn your obligations into income-generating assets!
If you land up renting an RV, check out our guide on Kitchen utensils and essentials for RVs.
29. Rent Out Your Bike
is a fantastic way to earn money with your bike and other sporting goods.
Many of the estimated 1 billion motorcycles, 125 million snowboards, and 50 million surfboards in the world sit dormant in garages or closets, collecting dust. All rental sporting equipment is stored on platforms.
You can hire out your bicycle or other sporting equipment to strangers. The fees and intervals (whether charged by hour, day, or week) are set by the owners. Any transaction on the platform is subject to a 17.5% fee.
If a renter damages, misplaces, or steals your equipment, Spinlister will reimburse you up to $10,000. Renters must sign a waiver form releasing both the platform and the owner from liability in the event of an accident while utilizing the equipment.
Spinlister also has a pro edition that includes features like allowing consumers to pre-book sales, integrating Zoom for a virtual appointment, and syncing rental calendars in real time.
Forbes, The New York Times, The Wall Street Journal, The Huffington Post, and NBC News have all featured Spinlister. Celebrities such as Oprah Winfrey have endorsed the brand.
30. Rent Out Your Boat
Another expensive investment is owning a boat — and more often than not, they are not used unless you list it on . With Boatsetter, people can borrow and use your boat; it’s a way to make money off your boat.
Boatsetter, like Spinlister, allows users to specify the optimum times and dates for renting the boat, as well as the type of client they want to attract.
Customer service is available 24 hours a day, 7 days a week at Boatsetter. Second, both tenants and lenders can get emergency information from the US Coast Guard database. Finally, captains who have been approved are available for consultation and boat maintenance. Finally, Boatsetter uses the Cognito program, which verifies each client’s identity during the application process.
Depending on the arrangement with Boatsetter, the owner will earn 65-90% of the net income after a completed boat rental. The income producing asset’s daily revenue might range from $400 to $700 per day. The amount of money earned will depend on the type and quality of the rented boat.
What sets Boatsetter apart from other boat rental platforms?
The first and only peer-to-peer boat rental platform to offer insurance was Boatsetter. They give boat insurance coverage while renting through their cooperation with BoatUS and GEICO Marine. It also uses TowBoatUS to provide on-water support.
31. Rent Out Your Clothes
People have excess clothes in their closets. Many are too expensive to throw out and too impractical to be worn regularly. In the end, these kinds of clothes take up much space without being used. According to , the average woman in the US has 103 clothing items in her closet but considers the majority to be either ‘unwearable,’ too tight, or too loose.
If you’re in this dilemma too, I suggest that you try . This is a peer-to-peer clothing rental platform that offers people temporary access to high-end brands like Saint Laurent, Chanel, Gucci, Prada, and Zimmerman, among others. It’s a terrific way to monetize the items collecting due and turn your clothes into an income producing asset.
To become a lender, start by writing a description of your trendy products and uploading a few images of them. Because sellers must go through StyleLend’s rigorous standardization procedure to assure quality and branding, there is a 24-hour wait time. Your clothing rental will be available once it has been approved.
Borrowed items are delivered within two to three days to the borrower’s address. If the goods fits, they can keep it for up to seven days before returning it to you.
StyleLend also has an insurance system with specific prerequisites. A lender must pay a $5 insurance fee for each rental. The clothes’ insurance premium covers minor stains, tears, and rips up to $50 in repairs. It also covers over $50 in replacement value due to damage. Aside from this, there is also a 20% commission to rent out your trendy clothes on the platform.
Best Income Producing Assets Summary
Various approaches. Various procedures. Profits are different.
Some of the best income-producing assets include financial markets, financial instruments, real estate, entrepreneurship, and shared economies. Several people have used this method to obtain riches and fortune. Still, there are a plethora of options for achieving this goal, and when I say plethora, I mean a lot!
Nonetheless, your inherent creativity, devotion, and desire to make extra money for the future are the most significant factors. Whichever strategy you choose, remember to work hard, work smart, and work big in order to secure your future!
To conclude this piece, I’d want to leave you with a quotation from Tony Gaskins, a motivational speaker:
Don’t waste your time chasing love, money, or success.
Make yourself the best version of yourself, and those things will follow.