Passive income is defined as income that requires minimal effort to earn. For example, if you invest some money and your investment increases in value, that’s passive income.
Alternative assets, or alternative investments, are often headline news. Because traditional investments like stocks and real estate sometimes involve a lot of market volatility, and savings accounts only offer low-interest rates, people are looking for other options.
Talk to any landlord, and they’ll tell you that “passive” is the last word they’d ever use to describe apartment management. However, many companies give you the ability to invest in commercial and residential real estate projects without being involved in the day-to-day management.
If you’re looking for another way to earn passive income, you may want to consider Lending Club’s peer-to-peer lending platform. Lending Club allows passive investors to diversify their assets by investing in different types of loans. Lending Club will enable you to loan your money out to people and groups looking for funding. The type of loans you choose will determine your investment return and risk exposure.
Dividends are profits paid out to owners of stocks. Some companies pay dividends regularly, which means that dividends can become a dependable source of income if you amass a significant number of shares over time.
Savings accounts are a reliable way to protect money–but not to increase it. Sadly, brick-and-mortar banks barely pay any money in interest, and institutions like Wells Fargo, Chase, Bank of America, and others pay around 0.08% interest. So you could have $100,000 in the bank and earn less than $100 per year in interest. That’s nothing!