- I want to earn more passive income, so I asked some finance professionals how to start with just $ 500.
- They suggested real estate crowdfunding and peer-to-peer lending sites.
- High yield ETFs and mutual funds, as well as starting an online business, were other options.
- Read more articles on Personal Finance Insider.
One of the most important things I’m working on this year, when it comes to personal finance, is finding other ways to generate passive income. Over the years, I’ve started doing this in a number of ways, from transferring my money to a high yield savings account, to offering digital services through my business that make money without me. have to do a lot of work.
Finding new ways to generate passive income is one way for my finances to evolve and grow, although some of the new ways I have explored require me to invest a lot of money (for example, buying an apartment in rent and collect income monthly). That’s why I wondered what other things I could do without losing a lot of money at the start.
Here are five tips, from financial planners and advisers, on how to start generating passive income by investing just $ 500 or less.
1. Real estate crowdfunding
I’ve always wanted to get into real estate as a way to earn passive income, but hesitated when I saw how much money it would take to buy and rent a home.
Financial planner Cynthia Meyer says there are real estate investing sites, like Fundrise, that offer options where people can start investing with just $ 500 to participate in a commercial real estate investment.
“Remember that any real estate investment is illiquid, so it’s best for long-term investors,” says Meyer.
2. Peer-to-peer loan
Another thing I have never considered doing with my money to generate passive income is peer-to-peer lending. Meyer says peer-to-peer loans are another potential way to generate a steady stream of passive income with a smaller initial investment.
“Lend your money to someone else on a peer-to-peer lending platform and earn interest paid by the borrower. Private loans can be risky, and loan opportunities are generally ranked based on the creditworthiness of the borrower. the borrower, ”Meyer explains. Some peer-to-peer loan options include Loan Club, Prosper, and Reached.
3. Start a secondary activity
If you’ve ever wanted to start your own business with the hopes of generating secondary passive income, financial planner Tania P. Brown says you can start with just $ 500.
Start an online business, like a blog – all you need is hosting and a website, explains Brown. Then add affiliate marketing and you are on your way to passive income. “Website hosting can start for as little as $ 2.88 a month, and if you’re tech-savvy enough you can either build a website for free or buy a website template (many have less than $ 100). If you are willing to invest a lot of sweat in learning as you go, you can cut costs a lot. If you decide to sell your knowledge, websites like Reflective and Teachable offer free options. “
4. Invest the money
If you’re willing to take risks or maybe wait a while before you have full access to passive income, financial advisor Justin Yoo recommends investing the money in two different ways.
“If you don’t need the money in the short term, you should consider investing it in high quality stocks,” he says. “$ 500 might not seem like a lot, but with the power of compound interest it can go a long way with a 10 to 15 year time horizon. It is important to start somewhere and start young. “
Then Yoo recommends putting that money into an IRA for retirement.
“Retirement accounts offer many tax advantages to those who wish to part with their capital until the age of 59.5, but there are limits
5.High yield ETFs or mutual funds
One of the first ways I earned passive income was through a high yield savings account, but I never considered other high yield accounts. Financial planner Alex Caswell recommends that I do this.
“If you’re looking for the easiest way to generate passive income, you can try an ETF or a higher-yielding mutual fund. This can be a high dividend fund or a fund focused on higher yielding bonds. said Caswell.