Relying on a single income stream is generally considered a risky financial choice as it may leave one vulnerable during situations like job loss, economic downfalls, or unforeseen life events. Besides salary or business revenue, it is important to have additional income streams to ensure financial stability, consolidate funds for retirement, have a greater work-life balance, and pursue one’s interests. Fortunately, there are several passive income strategies that help people diversify their income streams.
1. Investing in REITs
Real estate assets are among the most risk-free long-term investments for people seeking ways to channel their money and grow their wealth. While there is a common misconception that people must become landlords or buy property to become real estate investors, it is not true. With the help of avenues such as REITs, one can invest in real estate properties without shouldering the responsibilities of a landlord.
A Real Estate Investment Trust (REIT) is an entity that owns and operates on real estate assets. These companies function similarly to real estate mutual funds. They take money from investors before pooling it in many diverse real estate assets. Individuals can purchase REITs on the stock market like any conventional company or dividend stock. REITs pay out periodic dividends, which can become the much-needed secondary income stream of investors. Some of the top-rated REITs have a record of increasing their dividends year on year. This means that investors often have a growing income stream yearly just by putting a part of their savings into REITs.
Investing in REITs is not only one of the best passive income ideas but also a relatively risk-free endeavor for investors, as many real estate assets are involved in any given portfolio. This ensures that the element of risk is shared and minimized for them.
2. Trying affiliate marketing
In recent years, affiliate marketing has grown exponentially in popularity. This is one of the best ways to create multiple revenue streams online. Affiliate marketing involves earning commissions from selling another organization’s products or services. Affiliate marketers do not need to build products or offer services on their own; instead, they just need to drive sales for certain products and services by using referral links and social media posts.
If one is a social media influencer or content creator with a significant online reach, then one can partner with organizations to market their products and services. The partnership represents a win-win for all parties involved—the organization gets its products and/or services advertised, while the affiliate marketer gets a steady stream of income.
3. Investing in fractional bonds
Investing for passive income is a proven way to build wealth over time and create reliable revenue streams. Bonds are a useful alternative as they offer significant benefits to investors. But, the large amount of capital involved in bonds often discourages people from choosing this alternative. Such individuals can opt for fractional bonds. Unlike traditional bonds, these allow people to invest in smaller portions of bonds. Those new to investing and who cannot commit big amounts of money can use fractional bonds to diversify their portfolios and build residual income.
Such bonds tend to balance one’s portfolio with lower risk and steady, predictable returns. All in all, this is one of the best avenues to achieve financial independence through multiple incomes.
4. Starting a print-on-demand shop
Those who have expertise in graphic designing and creating original art can monetize their talents as one of the most lucrative online side hustles. People who wish to generate income streams through selling products or services but do not have sufficient inventory or fulfillment capabilities of their own can try out this option. People can sell their original designs on hats, shirts, mugs, posters, and similar other products by opening a print-on-demand shop.
There are many service providers, such as Qikink, Venderboat, and Printrove, that not only allow users to upload their digital art and choose the products they wish to sell but also offer to advertise those products on their online store. The platform will keep a cut of the user’s sales.
This is a great way to build a brand while freelancing for extra income. But, it is important to note that users must handle the pre-and post-sales customer service all by themselves.
5. Setting up an annuity
People looking to diversify their income sources can check for reliable annuity alternatives. In an annuity, one must make regular payments to an insurance company in return for a guaranteed income stream for the future. Annuities are incredibly flexible, and users can set them up in various ways, including immediate or deferred payments.
For people who wish to receive a monthly payout immediately, insurance companies allow them to do so by starting the payments early. This way, they can mature their annuity plans quickly. Alternatively, one can also structure their payment to start when they retire. Besides these, people can set up annuities that come with fixed returns, or they could opt for variable payouts depending on how the annuity’s own underlying investments performed in the market. Many retirees invest in annuities to build their wealth passively. But, it is important for one to opt for reliable insurance companies to avoid risks in the long run.