To build wealth you have to start somewhere. You have to learn how to let your money work for you instead of against you. The hardest part is figuring out how to make money without working for it. As the saying goes “work smarter, not harder”. That’s why I’m always looking for the best passive income investments.
Earning passive income is one way to increase your wealth. To me passive income is receiving cash flow that requires minimal work from you. But when I hear a lot of people talking about passive income they always make it sound so easy and effortless.
They give you a list of everything you need to do. All you have to do is start a blog, make youtube videos, write an e-book, build a drop shipping store, etc. That doesn’t sound passive to me. It sounds like a lot of work to me. Who has the time or energy to do all that stuff?
If you’re busy working a job, you just don’t have time for all that. If you are like me I just want to put my money somewhere that earns a great return and keeps growing your account. I just want a set it and forget it type of investment.
Things They Never Tell You
Our problem is that we are so used to putting our money into CD’s (certificate of deposits) or traditional savings accounts. We’ve been trained to think that way. The only problem with this is that the interest rates on these products are horrible.
They never tell you that the money you earn from those types of investments don’t even beat out inflation. As inflation starts to go up the value of your money goes down if you aren’t making more than the inflation rate.
You ever wonder why you can’t get ahead in life? As the prices of housing, food, gas, etc. keep going up the amount of money you have saved either goes down or stays the same. A lot of it has to do with inflation. It’s something that you never really think about. You just go about living your everyday life. But they never tell you how to beat it.
However, I’ll show you some of the best passive income investments where you can make money outside of the traditional avenues. These ideas should help you stay ahead of the game.
Cryptocurrency
Cryptocurrencies are my favorite ways to earn passive income. You don’t hear too many people talking about passive income with cryptos. I think the reason is very few people know about it. If you are reading this right now you are getting ahead of the game. The future of banking and technology is changing so quickly that people can’t keep up. It’s hard to beat the interest rates you can earn with cryptocurrencies and the liquidity they offer make.
1. BlockFi
BlockFi – A financial company that deals with digital assets. Their BIA (BlockFi Interest Account) enables users to earn interest on bitcoin, ether, and GUSD (Gemini Dollar). There are no deposit minimums to earn interest.
The interest rate for bitcoin is up to 6.2% if you deposit up to 10 bitcoins. After 10 bitcoins interest is 2.2%. Interest rate for ether comes up to 4.1% if you deposit up to 1000 eth. Everything after 1000 eth you will only earn 0.5%. Doesn’t make it worth it to deposit more than 1000 eth. Interest rate for GUSD comes in at 8.6%.
Interest is paid out at the beginning of every month. What I like about BlockFi is that interest is compounding. Whereas with the Celsius Network it is not. Here is an example how BlockFi’s interest work.
Check BlockFi’s website for up to date rates as they change all the time. Every month you get 1 free withdrawal. Every withdraw after that fees for bitcoin are 0.0025 btc and ethereum are 0.0015 eth. For a full review of earning interest with BlockFi click here.
2. Nexo
Nexo – For investors who don’t want the volatility of cryptocurrencies, Nexo provides high yield interest rates on USD, EUR, GBP, and stablecoins. Stablecoins are cryptocurrencies pegged to a stable asset such as USD or gold. They provide stability in their price without the volatility. Some examples of stablecoins would be USDC, USDT, DAI, PAX, and TUSD.
The interest that you earn on fiat and stablecoins is 8% at Nexo. Honestly, this is a great investment for people who want low risk. Think about it, you are making 8% for doing nothing. Why would you put your money in traditional banks earning less than 1% for a savings account? Plus you have the liquidity to cash out at anytime. In my opinion this is one of the best passive income investments.
Futhermore, interest on Nexo is compounded daily. You can earn interest quickly here. Additionally, there is no minimum contribution requirements. As for withdrawal fees there are none and you can withdraw at anytime.
3. Ledn
Ledn – This company is for people who want to earn interest on their bitcoin. Their Bitcoin savings accounts are earning 5.1% interest. They pay interest in-kind which means you deposit bitcoin you are paid interest in bitcoin. The interest is compounded monthly. This is the same as BlockFi.
They charge 1% for a withdrawal free. This fee can get expensive if you are withdrawing a lot of bitcoins. For smaller amounts it’s not too bad.
Apps
4. Celsius Network
Celsius Network – Celsius Network is an app that you download on your phone that let’s you earn interest on your cryptocurrency. What’s great about them is that they have a wide selection of cryptocurrencies you can earn interest from. You can choose to receive interest in kind or with CEL tokens. In kind means if you deposit bitcoin you will receive interest in bitcoin. If you decide to receive interest payments in CEL tokens you will receive a higher interest rate.
Another great thing about Celsius Network is that they believe in being fee free. Meaning they don’t charge any fees for depositing or withdrawing your cryptocurrency. Other companies will charge you for this service.
Futhermore, interest is paid out every week on Monday. Interest rates will vary from week to week. Click here to get the latest rates. For a more in depth review of my experience using the Celsius Network read my latest blog.
With all these cryptocurrency companies please check their regulatory disclosures to find out if they are available to you. Keep in mind, with the cryptocurrency space there are always risk involved. To learn more about cryptocurrencies and earn free cryptos in the process checkout my other article.
Real Estate
5. Fundrise
Fundrise – With this company you are investing in a portfolio of diversified real estate projects throughout the United States. You choose which investment plan you want to start with. Can choose between supplemental income, balance investing, or long term growth. Your returns will depend on which plan you choose. You could earn between 8%-12% on your investment.
6. Yield Street
Yield Street – For accredited investors. Their offerings concentrate on alternative asset classes. The 4 sectors that they concentrate on are commercial and residential real estate, commercial finance, marine finance, and litigation finance. They target annual yields between 8%-15%. Management fees range from 1%-4%. Their fees are pretty high. It cuts into your profits. These investments are illiquid, so if you don’t need your money immediately it may work for you.
7. Peer Street
Peer Street – This company is similar to Lending Club but they deal with real estate. It is also for accredited investors. Returns range from 6%-9%. Investment loans range from 6 to 36 months. In contrast, Lending Club has 36 or 60 term months. I actually like shorter term investments versus longer term when it comes to lending. With longer terms loans there is more time for something to go wrong. Meaning there is higher risk for defaults. Take for example, someone can lose their job, health issues, bankruptcy, etc.
8. Realty Mogul
Realty Mogul – This is a online marketplace for investing in commercial real estate. You can invest in REITs (real estate investment trusts), individual properties, or 1031 exchanges. A 1031 exchange is when an investor wants to exchange a property for another like-kind property. The reason you would do this is to defer capital gains from a sale of a property.
9. Rich Uncles
Rich Uncles – They make investing in real estate easy and less expensive for the individual investor. If you want the benefits of real estate but don’t want the hassle of dealing with tenants and property managers you invest in REITs. A REIT is a company that owns and operates income producing real estate properties. They combine capital from many investors. Rich Uncles is an online platform that allows investors to buy into their REITs. The dividends are paid out monthly.
Savings
I know, I know, I know I said that traditional savings accounts are horrible places to put your money in but every once in awhile I’ll come across a company that actually gives out a decent return.
10. Redneck Bank
Redneck Bank – An odd name for a bank but I couldn’t ignore the interest rate to open a checking account. They are giving out 3.00% APY for up to $10,000 in your account. After that, anything over $10,000 will earn 0.50% APY.
The only requirements are a minimum opening deposit of $500 and 10 debit card transactions per month. That’s not bad of an exchange to earn 3.00% on your money.
If you don’t think you can meet the 10 debit card transactions per month their money market account earns a decent 2.40% APY for up to $50,000. The minimum opening deposit is $500.
Check their rates as they are always changing.
Peer To Peer Lending
11. Lending Club
Lending Club – The most well known peer to peer lending company. It is a marketplace that connects borrowers and investors. For investors you decide which loans you want to invest your money in. The interest rates are determined by the borrowers rating. I’ve seen interest rates ranging from 6%-30%. You decide how risk tolerant you want to be when you invest your money.
They also have automated investing if you don’t want to go through the process of deciding which individual loans you want to invest in. I’ve been using Lending Club since 2013. I’ve always found them easy and great to use. The interest rates have been pretty consistent. I’ve been averaging around 8% a year throughout that time. However, my rates haven’t been as strong lately. I’m getting close to 5% now.
12. Prosper
Prosper – A company similar to Lending club. I started with them around the same time as lending club back in 2013. I enjoyed using them more than Lending Club. The main reason was that I had less defaults from borrowers on their loans then I did with Lending Club. That’s why my returns were higher around 9%-10%. However, I’m not with them anymore because I moved to a different state that they don’t service.
13. Upstart
Upstart – Another peer to peer lending site. They use the same process as Lending Club and Prosper with a marketplace between borrower and investor. The difference between them is that Upstart uses educational and employment variables (such as school attended, degrees attained, etc) to determine the ability for the applicant to repay the loan.
For this one you must be an accredited investor to open an account. To qualify your income must exceed $200k or your net worth must be over $1 million.
Music
14. Royalty Exchange
Royalty Exchange – A marketplace where artists and investors are connected. Investors are given the opportunity to invest in future royalties from an revenue generating asset. For example, you could have bought the royalties of songs from popular artists such as Trey Songz, Zendaya, Grateful Dead, etc. How cool is that? Getting a passive income stream from music. Check the live auctions for the term agreements of the seller.
In Conclusion
Having passive income generating cash flow everyday, week, or month is a great luxury. These are 14 of the best passive income investments that don’t require a lot of work or energy. Once you get more income streams coming in you will generate wealth and freedom. All you have to do is just get started. As with all investments make sure you research what is the best for you.