Income-generating assets are a great way to build wealth, but only when you know which ones to invest in. Otherwise, the opposite result will be easy to achieve as well.
Assets that generate income can be used in many ways, and not all of them focus on the same niche, area, or field, however, you want to call it.
The basic concept we can give you in advance is that they often have the potential to provide income for years or even decades into the future. You may end up going over a huge investment right now, but it will be worth it if you choose your assets well.
How can you choose well, though? By taking the time to do research? Or maybe just ask a friend? Both of them and many more things.
Here, we will discuss 25 of the best income-producing assets you could invest in right now and consider that this can change a bit based on the market and the date we are in. However, this one is updated as of the moment you’re reading this.
What Are Income-Producing Assets?
Before we jump to action, let’s leave a few things clear about what these assets are and why you should definitely consider their investment.
Also known as income-generating assets, they follow the previous concept and idea we shared. Still, these assets can generate steady income over time and are very attractive when put simply.
It is rare to find passive investments, but income-generating assets require moderate-to-low involvement. The timeframe and potential returns of each type of investment will therefore vary.
Income-producing assets come in many forms. They include mutual funds that generate monthly income, savings accounts with high rates of interest, fixed deposits with high interest, property, and dividend-paying stock portfolios.
Basically, you can find any of them according to what suits your needs the most.
Now, it is crucial to distinguish between income-generating assets and non-productive assets.
Non-productive assets are investments that have no income but hold their value. A car, for example, isn’t considered an income-generating asset even though it may be very valuable. This asset is not considered to be an income-generating asset even if it appreciates at price because it does not generate cash flow.
Real estate properties and real-estate investment trusts (REITs) are two examples of income-producing assets.
How to Get Started? – What You Must Keep in Mind
Although it sounds good to invest in something that can bring you lots of income in the future, it isn’t as simple as having all the money and going for it.
In fact, it is common to invest in income-producing assets by relying on income from your primary job or existing savings, but it may not be the best option. You are betting a lot of your income on something you aren’t certain yet will be profitable.
If you are going to aim for this income option, interested investors should do their financial planning. You will need to determine how much money you have available and how best to use it for potential assets.
There are still ways to get started, even if you have little capital. You can learn more about investing and fundraising by checking out how you can raise capital.
To ensure future income-producing assets, many investors will be more involved at the start of their careers. Although raising capital may seem daunting at first, some options require very little money.
Savings accounts and CDs, for example, do not usually require investors to have a minimum net worth.
When you start investing in income-generating assets, one of the most important points to remember is the importance of diversifying your portfolio. Diverse portfolios are a hallmark of financially smart investors.
This can be beneficial for many reasons, but it can also provide some protection in the event that one of your investments does not turn out to be profitable.
Diversifying your portfolio can help you receive regular income from different sources and stagger your income.
Jumping In: Income-Producing Assets You Should Invest In
Now that we have the basics clear and all-set, we are able to jump to the important part, what assets you should invest in.
Due to the wide variety of options available, you will have a hard time choosing one or two, for sure. In fact, most investors make the wrong choice the first and even second time they decide to get some income-producing asset.
However, we want to lend you a hand, as we mentioned in the beginning, so, look forward to the list we have compiled for you:
Real Estate Crowdfunding
Many types of real estate investments are appealing to many people for multiple purposes, but if we have to top them, these definitely make the cut:
- The tangible nature of the investment.
- Low correlation to the stock market.
- Multiple return components.
- Tax advantages.
Many people are discouraged from starting because of the practicality involved in owning, renovating, and maintaining a property and being a landlord.
Many companies offer real estate investment opportunities, with or without property, thanks to fintech.
Crowdsourced lending and purchasing are the best (and simplest) ways to get into real estate investing. Other online platforms offer different levels of service and investment options to meet investor demand.
You can avoid any aspect you don’t want to be involved in, like owning or managing property. However, you still have access to alternative investment options.
Many options depend on what type of investment you want to make in real-estate crowdfunding ventures and how you want to approach this investment in specific. If it isn’t with crowdfunding, you will later find an alternative in our blog.
Small Businesses Investment
If you live in a small city or maybe a town or community, you have hit the jackpot when it comes to small businesses + investment opportunities. Usually, you will find quaint shops along the streets, as well as diners offering home-cooked meals for both locals and tourists.
You can just find any business, and most of them will be relatively new or maybe old but without significant growth over the years. In either case, you are winning an income-producing opportunity when deciding to invest in small businesses.
For this, MainVest provides vetted opportunities for small businesses in your area or nationwide to help you build, track, and invest in passive income.
Through revenue-sharing notes, these business ventures can earn between 10-25% per annum. Financial agreements share revenue with investors until they reach a certain return.
Mainvest is responsible for protecting investors from businesses that don’t have strong investment reasons or a clear direction. The service accepts only 5% of businesses that sign up to the platform to raise capital for their business growth.
The platform vets these businesses to enable you to make informed investments based on your interests and investment strategy.
You can choose to invest depending on your location, industry, and risk appetite. This is possible by comparing terms with qualitative data that has been collected for over 300+ investment opportunities since the platform’s inception.
REITs Are an Option
A REIT is an investment trust that holds real estate assets. REITs are a unique legal structure that allows them to pass on most of their income to shareholders without paying corporate income tax.
REITs can be purchased on the stock exchange just like any dividend stock or company. You will earn what the REIT pays as a dividend. The best ones are known for increasing their dividend on an annual basis. This means that you could be able to have a steady stream of dividends.
Individual REITs, like dividend stocks, can be riskier than owning an ETF with dozens of REIT stocks. You’ll still receive a nice payout and immediate diversification with a fund.
However, like dividend stocks, you will need to be able to pick the best REITs. This means that you will have to analyze each business you are considering buying thoroughly.
It can be time-consuming, and even though it is passive, it can cause you to lose a lot of your money. The stock price can fluctuate in the short term, just like any other stock.
Thus, consider these risks before anything else if you want to go for them.
Create and Sell An eBook
Publishing your own book is quite popular today, and we would recommend you not to discard it if you’ve got some talent for it, especially when self-publishing is more common than traditional publishing today. This is all thanks to the option offered by Amazon.
Self-publishing can be extremely easy, so you don’t need to trouble yourself on this, and although this doesn’t seem like an income-producing asset, you need to think about it in the long term.
With eBooks published, you get to have “products” that are selling all the time, of course, depending on how well you sell, but this is a matter of work as well.
Now, before you jump into this option, do you have the ability to write? Are you able to use a computer? And with the first question, we mean if you truly have what it takes to write a decent book or even a best-seller, who knows.
Keep in mind that there are no barriers to publishing a book these days.
Of course, like every investment, self-publishing your book comes with risks you need to consider.
Amazon is the most popular place to sell them. It is probably the easiest and the only one you should consider. To rank higher in their search results using best practices such as having a professional design for your cover and working on reviews will be crucial and kind of difficult.
You could create a series or write a how-to guide if you’re really ambitious. You can market your book via sites such as Twitter ads (promoting through their advertising network), Facebook ads, and Google advertising.
Before you can make this an income-producing asset with digital products, there will be a lot more upfront marketing. If you are able to make it work, you will be well on your way towards maximizing this option.
Secured Peer-to-Peer Lending
This option is very unlikely to be known for many, and the option to approach it varies as well. In this case, we will be mentioning one in particular: MyConstant.
This service is an alternative investment platform that offers secured peer-to-peer loans.
MyConstant needs to have collateral, specifically cryptocurrency, in order to guarantee all loans they make, and these loans have a lower risk than non-secured P2P loans.
However, you need to keep in mind that MyConstant, unlike other federally-insured savings vehicles, is not.
Secured loans are safer than traditional lending platforms such as Prosper and LendingClub, which don’t require collateral to back loans.
This sounds like an income-producing investment, so you might consider opening an account starting at $50. As an incentive to fund your account, you will receive $10 when you make your first deposit and open an account.
A Bond Ladder
This is a collection of bonds that mature at different points over the course of a number of years, and it is the entire definition of long-term investment.
The good thing is that staggered maturities can be used to reduce reinvestment risk. This is when you don’t want to reinvest your money in bonds that pay too low interest.
This classic investment has been appealing to retirees and those nearing retirement for decades. You can relax and receive your interest payments as there is no need to work in order to get your profits.
When the bond matures, you “extend” the ladder, rolling the principal into another set of bonds. You might choose to start with bonds that are one, three, five, or seven years old.
You will have bonds left over after the first bond matures. These bonds can be repurchased in one year. The proceeds of the matured bond can be used to purchase another year or to roll out for a longer-term, such as an eight-year bond.
What is the trick? A Bond ladder comes with the possibility that your bond will not mature, and you’ll have to purchase a new bond at higher interest rates.
There are other risks associated with bonds. Treasury bonds are backed federally, but corporate bonds are not. If a company defaults, you could lose your principal.
To diversify your risk, you will want to have many bonds. This will eliminate the possibility of any bond affecting your portfolio.
These concerns have led many investors to look into bond ETFs. They offer a broad range of bonds and can be set up like a ladder.
Invest in High-Yield Savings Accounts or A CD
You can generate passive income by investing in high-yield certificates of deposit (CD) or savings accounts at online banking. In addition to the highest interest rates, you will also be able to earn passive income.
You can make the most out of your CD by doing a quick Google search of the top CD rates and the top savings rates. An online bank is usually more beneficial than a local bank because you will be able to choose the best rate in the country.
If the FDIC backs your bank, you will still get a guaranteed return on principal up to $250,000.
Your principal is safe as long as your bank has been backed by FDIC and is within its limits. A CD or savings account can provide the best return. However, these accounts are still safe, but they return less than ever before.
This can make it less attractive than inflation which reached mid-single figures in 2021. Inflation will affect your real purchasing power. However, a savings account or CD will return more than cash or a checking account that doesn’t pay interest.
Annuities
An annuity can be a long-term investment, and to get it, you will need to find an insurance provider that issues this type of asset.
It is a contract that guarantees you a fixed amount of money each month to make this simple. It is designed to provide income for your entire life.
Keep in mind that annuities can be divided into two groups:
- Annuities for intermediate income.
This type of annuity allows you to make one lump-sum payment, but then it is broken down into regular payments over a period of time. You can get guaranteed income when you purchase an intermediate annuity.
- Variable deferred.
Deferred annuities allow you to make a lump-sum payment, pay premiums, and receive guaranteed payments at a later time.
Invest in Franchises
A franchise is a good investment for those who have substantial cash in their bank accounts. A fast-food restaurant chain is one of the most popular examples (e.g., Taco Bell, McDonald’s, and Starbucks).
This option can bring you many benefits. First, you can make lots of money. You can also start a franchise with a global brand in a strategic area and comes with a very low failure rate.
A lot of franchises have pre-set marketing programs and business assistance programs. This makes your job easier.
Franchises will vary in the number of down payments required. You can expect national or global fast-food chains to cost anywhere from $100,000 to $1,000,000 or more.
There are smaller franchises that you can purchase for between $10,000 and $20,000, which could prove to be very profitable.
Dividend Stocks
Dividend stocks are stocks that pay dividends at regular intervals to shareholders. Dividends can be paid in cash or shares of stock.
Let’s say a company has a 5% dividend yield, and the stock price is $20/share for the year. A 100-share owner would be able to choose whether they want $1 per share in cash or five shares each through reinvestment over the year.
Dividend stocks can be a great way for you to increase your investments over time.
You shouldn’t choose stocks solely based on their dividend yield. It’s also important to factor in their price-to-earnings ratio, price-to-book ratio, debt-to-equity ratio, and price/earnings-to-growth (PEG) ratio.
Consider Websites
Digital cash flow assets are also possible and very profitable, considering that we are all going digital every day.
Suppose you need a comparison; people “flip” houses by purchasing them and then reselling them at higher prices. The same thing can be done with a website, but it takes a lot less.
It is basically a way for someone to research upcoming news or topics, get domains they think others would want, and then sell it to them for higher than the cost of buying it.
You can build a website with minimal traffic and make a profit by affiliate marketing.
You can also build your website and keep it up to generate ongoing cash flow.
Content is the king of internet marketing. A website that includes in-depth reviews, discussions, and other information will be a must for any potential visitors and can be considered.
Of course, this option is more a matter of maintenance and working around it, but it has proven to be quite profitable over the last few years.
Money Market Accounts
These are similar to online high-yield savings accounts, meaning that they earn interest and are FDIC insured. This covers them with the obligatory $250,000 in insurance against assets held in the account in the event the depository institution fails.
They are not subject to additional risk, but they can pay more than traditional savings accounts.
You can close your money market account at any moment, unlike CDs which may have penalties for early withdrawals. You can also withdraw money each month from your money market account using a checkbook or with a debit card.
Some may have a limit on the number of withdrawals that you can make in a given time period or month.
To be certain of the terms of any account, read all the details before you open it. You can also avoid penalties that could arise from excessive withdrawals.
Finally, most money market accounts have account minimums. This is especially important if you want the best rate.
You might consider opening one with CIT Bank. This online bank offers some of the best interest rates on the market and can help you maximize your profits in the future.
Owning A Traditional Business
Cash is the king of business. This allows you to have financial flexibility, meet your obligations, grow your business, finance your operations, and so much more.
Businesses generate substantial cash through their operations. This gives you ample opportunity to reinvest or take home the cash. Of course, this isn’t new but rather something everyone knows. However, is it really a good idea to bet on a traditional business?
Most people fall into the idea of having a business that is out of this world just because they want to make it work. However, not all business ideas need to be innovative to be a great income-generating asset.
You can have a simple yet profitable idea in mind and make it work perfectly without worries. Therefore, we would recommend you keep it simple most of the time.
Also, you can reduce the risk of business formation and startup by purchasing an established business that has established customer lists, operations, staff, processes, and procedures. Not a franchise but rather one that is already operating and will change of owner or something similar.
You can either generate cash flow from the business or make a handsome salary by working hard on it. Though, the first option sounds like the right one considering this is a producing asset, not a job you’re trying to find.
That being said, what businesses are good options? We can give you some ideas:
- Pest removal services.
- Bistros and specialty cafes.
- Clinics for medical testing.
- Businesses that supply electrical utility equipment.
- Businesses that provide pool repair and supplies.
- Boat storage facilities.
Cryptocurrency Lending
Many millennials are now embracing cryptocurrency, and it is a great idea. However, the results are questionable and sometimes to their disadvantage.
If you are some of the many that have invested in cryptocurrency, you may want to do something more productive with it than just wait for things to go up (hopefully).
For instance, BlockFi is a platform that offers multiple services you might enjoy.
The company targets crypto investors who want to make more of their crypto assets. It wants to help them grow their investments and increase their wealth.
Among the options available for this, the BlockFi Interest Account is a popular service product.
This product allows individuals and businesses who own crypto to earn interest on crypto they have at BlockFi. These interests are often much higher than the market for high yield savings accounts.
Your interest can be paid in different cryptocurrencies than the one you have on deposit. All this by lending it to someone else.
Interest Payment Flex, an arrangement that offers to pay in a different crypto asset or Gemini Dollars (GUSD), which is a stablecoin cryptocurrency issued by Gemini, one of the United States’ largest cryptocurrency exchanges.
Gemini Dollars are linked to and backed by US dollar reserves at State Street Bank and Trust Company.
This means that if you have Bitcoin (BTC) and you choose to receive an interest payment via the Interest Payment Flex option, then you may receive crypto income.
Short-Term Rentals
Instead of investing in building new properties or purchasing one from zero to then selling it, renting out existing property can be a great way to generate income.
You can own a house or apartment and rent it to tenants. Then you make money each month from the rent checks, and it is an easy and profitable way to get your income.
However, investors beware; this can prove to be more difficult than you think. Tenants can refuse payment, and you will need to deal with legal processes.
Thus, renting a short-term house or a room is safer through trusted services like Airbnb.
Airbnb’s Host Protection program provides you with up to $1 million of protection for property damaged by guests in eligible countries. This platform can be very profitable depending on where you are located and what type of accommodation you offer.
Although flipping the rooms between guests takes some time or the simple idea of renting feels exhausting, it becomes much easier and more enjoyable once you have a system and separate the duties with someone else, or maybe assign a cleaning company for it.
You just need to organize everything properly and sit back to see how it unfolds.
Option Contracts & Covered Calls
Covered calls are an option for investors looking to reduce the risk of spending money in the market to earn investment returns.
This is the best way to trade options. It can also generate income for your portfolio regardless of whether your stock falls or rises as long as you position your trades correctly.
First, let’s look at what option contracts mean. A single option contract is 100 shares of an underlying share. This is the simplest definition we can give you, and we believe it is pretty much straightforward.
Keep in mind that this can be a call or put option and is also known as a “round lot.”
Call options are bullish from a buyer’s point of view because they lock in a lower price for buying a stock either now or in the future. They are purchased by investors who believe the stock will rise from its current levels.
They want to secure this entry point, so they pay a premium option instead of the full stock order price.
Investors can also sell call options (act as option writers) and receive a premium from another investor if they believe the price will rise.
The premium is paid in exchange for the option to sell the call against stock they own (called writing a covered call). The call writer will earn additional income if the stock price does not rise above the strike + option premium.
Farmland
Farmland is one of the most popular income-generating assets. It is not subject to the same volatility as other investment types, which is pretty much the reason behind its popularity.
Because it is a food resource, farmland has a low correlation to the stock market, and the reason why the demand has been fairly consistent over time.
Two options are available to investors who want to take advantage of this asset.
You can first buy land and then lease it to a farmer company. This strategy requires research to ensure that the land is located in the correct place and has a reliable renter.
You can also invest in a REIT or crowdsourcing platform that is focused on farming and farmland. Still, you should research these companies carefully before investing, as fees could reduce your income potential.
Building an Online Business
Building an online business is one of our favorite things on this list, and no, it isn’t exactly like the previous website option we mentioned.
What you need to know about this option is that it can be a great source of income if you have the right audience, and if it doesn’t work, you can just sell it in the future to someone that is kind of like you and knows they can bring the full potential with their strategies.
But what does this option involve? An online business could be anything: starting an e-commerce store using Shopify or Amazon FBA, selling digital products (such as an ebook we mentioned earlier), going for any digital asset you find is possible; you just need to do some research.
Many online businesses can be passive. This means that once you have established it, a steady income stream can be achieved and maintained.
It is important to remember that this can take a lot of work upfront and takes time. The money you make can also be a bonus and could even change your life.
Brick and Recession-Proof
Mortar Businesses
Many businesses have peak and slow seasons. During them, they spend a lot of time planning for the next growth phase. But not all businesses operate in this way, nor are they able, of course, to make it to the next phase.
Some businesses can withstand a recession while others don’t, and your objective will be the first one.
These businesses will continue to be in demand, regardless of what’s happening in the economy, which is why they usually include those that are in the healthcare sector, such as laundromats and auto repair shops, nursing homes, agencies, and grocery stores.
No matter what economy you are in, everyone needs access to food and health.
These businesses are fundamental. An investment in essential services can provide a steady source of income throughout any economic cycle.
Self-Storage Units
Self-storage units have seen a dramatic increase in popularity over the past few years. Nationally, there are approximately 60,000 self-storage units.
The good part of these stores is that they require very low construction costs and are easy to maintain.
Also, many self-storage units don’t require staff. Unit renters can also gain access to their units by using a pin or key.
Self-storage units don’t require much emotional attachment, and the lease period is month to month. Investors can enjoy rent increases with every new lease.
Royalties
You might be hesitant to lend, so you probably discarded our earlier mentioned about it, or so far, you haven’t liked any of the options. Whatever it is, we still have a couple more.
In this case, maybe you should invest in something more cultural. Here is where royalties come into play.
You can sell and buy royalties on music, film, and trademarks through sites such as RoyaltyExchange. Because royalties are uncorrelated with financial markets, they can be a great investment.
For instance, Jay-Z and Alicia Keys’ “Empire State of Mind” have earned over $33k in royalties over the past 12 months. This song’s next ten-year royalties were last sold for $192,000 on RoyaltyExchange.
If we consider the annual royalties and the average established and think they will remain the same, then there’s clearly a profit from it.
No one can predict whether royalties for this song are going to increase, decrease, or stay the same over the next ten years. It is all about musical tastes and how they change.
However, it is profitable because it is a market that continues to produce, and people just keep listening to music. The same happens with the rest when it comes to entertainment.
The only downside to investing in royalties is the high fees that sellers have to pay.
Although RoyaltyExchange charges buyers a flat $500 fee for each purchase royalty, sellers must pay 15% of the final sale value after an auction closes. Other platforms’ fees and rates vary, but they pretty much remain the same.
We recommend going over the pages you have as options and focusing on finding the lowest rates yet with great potential in royalties when you access the music or other content.
Money Market Funds
Money Market Funds (MMFs) are special fixed-income mutual funds that invest in low-risk short-term debt securities and pay dividends like other income-producing investments.
MMFs can be low- volatility investments. They may be tax-exempt or taxable, depending on the securities held. They work according to the net asset value (NAV), which means that they try to maintain $1 per share. Any excess is divided as dividends.
Investors love the NAV standard. It requires fund managers to pay regular dividend payments to investors. This provides steady cash flow income that investors value and are able to get over 50% of the time.
Low-Maintenance Businesses
As we mentioned earlier, a business can be a great way of earning income, but you better take the time to choose a low-maintenance one to avoid any problems.
These businesses are great for generating extra income while not affecting your job or life. There are many options, but here are some common ones:
- Vending machines.
- Carwashes.
- Storage facilities.
Or anything that doesn’t really require too much time in terms of taking care of or needing to visit it every single time.
Basically, you are looking for businesses that don’t rely on their owners or employees for their success. Some work will be involved, but they can be more passive than many other types.
This category could also include certain types of franchises, particularly if the owner is hiring others to manage the business.
These businesses can be a great asset because they provide steady cash flow as the business options we have mentioned before.
Creative Assets
If you want to go for an option that is a bit more creative and less boring than usual, you will love this income-producing asset.
First, you might have creative skills that could be used to generate income. You could license or sell digital photos, graphics design, or music and sound files with them.
You have many options to make money from photography or any other creation you have as long as you know where to sell them and how to market them. Just take the previous ebook option as an example.
In the case of photos, one option is to license or sell your photos to businesses. You could, for example, contribute to stock photo marketplaces such as Shutterstock or Adobe Stock.
Graphic designers can create icons, images, logo templates, and brochure templates. These products can be licensed or sold on stock exchanges or your site.
Using your musical skills, you can create audio files that you sell on stock exchanges or your own website.
These strategies allow you to create assets that can continue to generate revenue for many months or even years. There is a lot to choose from in these markets, so you will need something of high quality or create your site to compete with the big players.
Private Equity
Private equity investing is a profitable option. However, most people are not able to do it.
It can be a bit complicated to explain it, but basically, private equity is an investment that companies hold with the aim of rapid expansion and growth.
They are only available to accredited investors. In many cases, they will also come with very low minimum investments.
This is a high-risk investment that can also be rewarding. You will get incredible returns if you invest in the right company. However, you are more likely to lose your investment because so many startups fail.
So, what you need to remember when considering is that private companies offer high risk and high reward investments, but it is not realistic for most people, and you shouldn’t if you have the money you cannot afford to lose.
Did It Help? This Is What We Truly Recommend the Most
Income-producing assets can come with many risks depending on which ones you choose or just one.
Thus, as we mentioned earlier, it is important to research and take the time to consider what asset will be the most suitable based on your money, capital, and goals.
In our case, we often prefer to work in business options that open the opportunity to build wealth. In this way, we have something of our own while also being able to get the final result like with the previous assets.
You could say that what we use the most falls in the online business option since it is all internet-based, and you know to learn more than a thing or two to get things working properly.
A lead generation business is what we are talking about, and it has two major advantages: it is cheaper than other options. It can help you reach six figures faster without having to worry too much about your investment.
Lead generation is simple so that you can get started as soon as possible:
- You can choose to specialize in a single niche.
- Next, reach out to small businesses and companies who are looking for leads in the chosen niche.
- You will build their websites and optimize them to rank on Google.
- Those websites should be able to generate leads.
- You earn a commission for every lead you generate for a company or website.
You can create as many websites as you like. You only need to finance hosting and domain. As for the rest, everything falls in building wealth.
Although it is easy, you need to know how to build things properly. This #1 program will help you.
It’s affordable and can help you ensure that lead generation is your best source of building your fortune.
Here’s Our #1 Recommended Online Business Model:
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