peer-to-peer lending

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It is no secret that the internet is changing how money is made forever.

This has caused a boom in many businesses and people the ability to make money online, which is a huge benefit for you!

This trend will only continue as technology improves. If it feels daunting to jump onto this new bandwagon right now, don’t worry; we have some tips that can help you double your 10k in the next few weeks or years.

I am going to show you how to double your money so that you can retire early, pay off debt and invest in the stock market.

A lot of people would say this is impossible, but I’m not just showing it–I’m proving it!

We all have said it takes money to make money and while that is true. It is easy to start doubling your money with just $10K.

What if, right now, you decided to double your 10K by the end of the year? Maybe, you want to hit a major goal and make a huge change in only 8 short weeks?

Making money is not a difficult task. Too often, people become impatient and think that they can simply make money without putting in the effort. This is not true.

Cash is a tool and nothing more. Once you understand this concept, you can begin to figure out how to make more money. Additionally, it’s important to appreciate that it takes time to make money – don’t expect to become a millionaire overnight.

Here is a realistic guide to help you work towards that goal.

Be sure to decide which strategic way to double $10k quickly works best for your personality.

The 10K of your dreams seems impossible.

How can I double $10000 fast?

There is no one-size-fits-all answer to this question, as the best way to double your money will vary depending on your individual circumstances and goals. However, some general tips include developing a growth mindset around money, finding ways to make more money, and investing in yourself and your skills.

Keep in mind that $10,000 is not a lot of money to double in a short period of time.

How long does it take to double 10k?

The answer to this question is dependent on a number of factors.

The most important factor is the amount of time it takes for your investments to double.

If you are investing in stocks, you can quickly double 10K with an options contract within 2-3 days. If you are looking at other avenues, it will depend on how you choose to double your money.

Typically, people start seeing results in approximately 4 to 6 months to double 10k.

If your eyes are set on this, then make sure to write down one of the millionaire quotes for motivation.

What to do with 10k?

Now that you’ve earned an extra 10k, you may be wondering what to do with it.

You could save it, spend it, or invest it, but there are a few other things you could do as well.

Here are some ideas on how to make the most of your money and grow it even more.

How can I Double my Money?

There are many ways you can double your money in a short amount of time.

I am passionate about exploring the best ways to make money online. In this article, I will share some tips on how you can double your money relatively quickly. However, please keep in mind that these are general ideas to get you started.

Specifically How to Double 10k Quickly?

If you are serious about how to double your 10k fast, you will need to dedicate time on a regular basis to the tasks needed to reach your ambition. The key is to do it daily in order to keep the momentum of your progress going.

Earning money is a mindset.

To double 10k quickly, learn how to change your mindset about money.

Although doubling $10,000 may seem difficult, it can be done with the right approach.

If you have $10,000 and want to double it within a month or a few months, here are a few realistic strategies to help you reach your goal.

Idea #1 – Swing Trading with Stocks

Swing trading is a technique that allows investors to hold onto stocks for a period of time, typically two to four days. During this time, the trader watches for specific price patterns and buys or sells shares based on their analysis.

One former assistant principal, Teri Ijeoma, changed her life when she left her job as an educator and become an active trader.

Check out: My Personal Trade and Travel Review

This type of trading can be very profitable if done correctly, as it allows the trader to make twice their investment in a short amount of time.

The key is you must learn how to invest in stocks for beginners. This is one step many people overlook when they are focused on doubling their money. Either you will get lucky or you will have a huge loss. Take time and become educated on swing trading stocks.

Related Reading: How Fast Can You Make Money in Stocks?

Idea # 2- Cryptocurrencies

Cryptocurrency is a digital or virtual asset that uses cryptography for secure transactions. Cryptocurrencies are growing in popularity and may become a major part of society. Bitcoin, the first and most well-known cryptocurrency, has seen its value skyrocket in recent years.

Cryptocurrencies are often unstable because they are not regulated by any government or financial institution, and thus their value can change rapidly. However, the potential for reward is high, making cryptocurrency an attractive investment option. Because of this, cryptocurrency investments are often seen as riskier than traditional investments, but also have the potential for greater returns.

Before investing in cryptocurrency, do your research and be sure you understand the risks involved. There are many educational resources available to help you get started.

Idea # 3 – Flip Items for a Profit

Retail arbitrage is a practice where an individual or company purchases a popular product at a discounted price and then resells it for profit at another online retailer. This can be done on marketplaces like Craigslist, eBay, and Facebook Marketplace.

This is a great way to make some extra money on the side. You need some time and a willingness to invest, but if you find the right deals, you can make a good return on your investment.

Many people have great success by flipping items from auctions, free groups, or local goodwill store.

Check Out: Flea Market Flipping

Idea #4 – Resell Products on Amazon FBA

Amazon FBA is a service for independent entrepreneurs who want to start their own e-commerce business. They can offer products on Amazon and work with Amazon directly to fulfill orders, collect payments, and provide customer service. By doing this, they don’t have to worry about the inventory and can focus on other aspects of their business.

This is another avenue for selling your flipping treasures.

There are a few ways to make money through reselling products. You can either find products to sell on Amazon or Ebay, or you can dropship products from a supplier. If you want to find your own products to sell, you’ll need to do some research on what is selling well and what prices are competitive. If you want to dropship, you’ll need to find a supplier and create an account with them.

Idea #5 – Start a Business or Invest in a Franchise Company

Starting a business is not easy. It requires a lot of work and effort, but if you’re willing to put in the time and effort it can be very rewarding.

Starting your own business is one of the most difficult things you can do, but it’s also one of the most rewarding. There are many different businesses you can start that have low overhead costs, so it’s a great way to get started.

Think of the things you enjoy doing or any hobbies you have. Look for business opportunities that line up with your interests. Then, it makes working much easier.

Here are great ways to make money on the side:

It is possible to make more money on your business than you make more money in your current job or career.

Idea # 6 – Real Estate Portfolio

Real estate is a recession-proof business.

There will always be people who need to rent or buy dwellings in boom or bust economic times.

Real estate can be a lucrative investment, but it is not without risk. A lot of people have invested in real estate and lost money, but an investor who does their research and finds a good deal can make a lot of money.

Idea # 7 – Increase Your Income

If you’re not happy with your current income, don’t worry! You can increase it this year.

This is the year that many experts are predicting will see the biggest wage growth in years. So start planning now and you could see a significant increase in your take-home pay.

More than likely, this could be your seed money of $10k to fund the start to doubling your money and making $20k.

Related Reading: How Much Do I Make Per Year?

Idea #8 – Advertise and Gain Clients

If you are a small business owner, then this one is for you. Start advertising as a way to gain more customers.

There are a number of ways to make your services more accessible and appealing to potential clients. One way is to spend money on promotions and advertising. Advertising can be effective in reaching your goals, surpassing your double your money goal of $20,000 in revenue.

There is no doubt that advertising your services will increase the number of customers you have. The more people who know about your business, the more likely they are to use it. And as we all know, the more customers you have, the quicker you earn more money.

It’s a simple equation: More customers equals more money.

Idea # 9 – Invest in Stock Market – ETFs & Index Funds

Investing in the stock market is a process that requires careful consideration and research. Index funds have become an increasingly popular investment option for many investors. ETFs are known as Exchange Traded Funds, which are also a popular investment option.

Both index funds and ETFs provide investors with the ability to invest in a diverse range of stocks, making them ideal for any investor who is looking to diversify their portfolio.

Investing in an index fund is one of the best ways to build wealth over time.

This is probably the slowest way to make money quickly in the stock market, but it comes with less risk.

With a mutual fund, you are essentially investing in many different stocks, which means that you get to choose how much your investments grow each day. This can be a great way to ensure that your money is working for you – and growing – even when you’re not able to actively monitor it yourself.

Just to know, investing in bonds will eventually double your money, but it will take more time as the rate of return is less.

Idea #10 – Start a Mining Farm

Cryptocurrency mining is a process by which new coins are introduced into the market. In order to do this, miners use computers to solve complex mathematical problems in order to receive rewards in the form of new coins. A cryptocurrency mining farm is a way to pool together multiple computers in order to increase the chances of solving these problems and receiving rewards.

Starting a mining farm is a process of investing in cryptocurrency or blockchain technology.

Mining farms can be started with as little as $500, and they are commonly used to mine cryptocurrencies like Bitcoin, Ethereum, and ZCash. Although the process of mining cryptocurrency is not always easy, it can be lucrative for those who invest in the process.

Starting a cryptocurrency mining farm can be lucrative, but it’s important to do your research first. The farm will require a lot of power and will have a rate of return of around 18% (source).

Idea #11 – Share Cash with P2P Loans

Peer-to-peer lending is the act of lending money to borrowers through a P2P lending website. These websites act as an intermediary between lenders and borrowers, and most sites allow you to lend money to a dozen or two applicants. The interest rate you earn on your loan depends on the P2P website you register with, but it typically falls between 3% and 36%.

When considering a P2P loan, it is important to remember that you are entrusting your money to a stranger. Because of this, it is crucial to take the time to review and assess as many applicants as possible in order to find someone who you feel is most likely to pay back their loan.

P2P loans can be arranged without any collateral or credit check.

Idea #12 – Buy Initial Public Offerings

When a company decides to go public, it sells shares of its stock to the public. This is a way for the company to get more money, and it also allows people who invest in the company early on to make a lot of money if the stock prices rise.

The share price of a company can be very volatile when it first goes public. This can lead to significant growth for the company as investors buy and sell shares rapidly. However, this volatility can also lead to losses if the share price falls abruptly.

You must know the underlying stock value before looking at IPOs as a way to double your money. Many current stockholders are required to hold their stocks for a certain number of days after the IPO. Typically, the stock price falls after the hold period expires.

Idea #13 – Make Money with Airbnb

There are a number of ways to make extra money, and renting out a room at Airbnb is one of them. You can also learn how to make money from home by becoming an Airbnb host.

By doing this, you can provide a valuable service to people who are looking for a place to stay, and you can also make some extra money on the side.

Learn how to start hosting with Airbnb today.

Idea #14 – Flip Some Furniture

Flip furniture is very trendy right now. There has been a recent resurgence in popularity for antique and vintage furniture, and people are buying pieces and restoring them themselves. This can be a great way to make additional money without spending a lot of money.

There are a number of ways to quickly turn a profit by flipping furniture.

Spend some time researching the best methods and finding a niche in the market that you can exploit. With a bit of hard work, you can easily double your investment in no time.

When you are looking for furniture to flip, it is important to do your research and become familiar with the different places you can find quality pieces at a low cost. Local antique stores will often have hidden treasures, so be sure to check them out. Additionally, watch for yard sale notices in your area; people are often willing to sell high-quality furniture at a fraction of the price. Finally, estate sales can be a great place to find unique furniture pieces that you can resell for a profit.

There are many ways to sell furniture, but when you are starting out, it is best to use popular platforms like Facebook Marketplace, NextDoor, Craigslist, and others. Once you have more experience, you may want to create a website and online storefront.

This can be a fun and lucrative way to grow your money.

Idea #15 – Pay Off Debt Strategy

This idea of getting out of debt may seem backward, but this is one of the fastest ways to find extra money in your budget.

There is no doubt that paying off your debt is one of the smartest things you can do for your financial future.

Not only does it reduce the amount of interest you are paying each month, but it also frees up more money to save and invest. Additionally, by paying off high-interest debt first, you are essentially making an investment with a very high return rate.

Once your debt is paid off, you can save your first $10000 which you can now use to quickly double to $20000. This will help you achieve your financial goals faster.

Idea #16 – Online Courses & Coaching Programs

Coaching is a huge business – reaching $11 billion in 2022 (source). People are actively searching for coaching and online courses for personal development.

Coaching programs are designed to provide guidance and support for individuals in order to improve their skills, knowledge, or habits. Coaching programs can take the form of one-on-one sessions or group sessions. Some coaching programs are designed for specific topics like career development, personal growth, or relationship issues.

If you don’t want to work one-on-one as a coach, you can create an online course that can be viewed at any time.

If you have passion, you can likely find people that want coaching.

Idea #17 – Buy a Fancy Car and Uber

You could buy a new, luxury car and become an Uber driver. This would allow you to make money while driving people around in your fancy car.

If you’re looking to make some extra money, driving a luxury car for Uber could be a great way to do it. Not only will you make more per trip, but you’ll also get to drive a nicer car. Keep in mind that if you drive full-time, you could easily double your $10,000 investment.

Driving a luxury car for Uber can get you up to 50% more fares. The extra money can be great for those looking to upgrade their lifestyle or simply want to make some extra cash on the side.

If you want to buy a fancy car and use it for Uber, make sure you have the appropriate insurance. This will protect you in case anything happens while driving.

Idea #18 – Learn a New Skill

A new skill can help to increase your income by allowing you to do things that you couldn’t do before. For example, learning how to code can allow you to start a new career in tech or programming.

Additionally, many skills have the potential to double your income quickly if you are able to find a way to use them in high-demand areas.

It is always a good idea to invest in learning new skills.

There are many places where you can learn, including online and in-person courses. The key to success is jumping in with both feet and really dedicating yourself to learning the skill set. Once you have it down, new opportunities for income will be available.

Idea #19 – Work More Overtime

Working overtime is a great way to earn extra money. You can earn up to double-time pay for working more than 8 hours in a day or 40 hours in a week.

Overtime is becoming more common, so be sure to ask your employer if you can work some extra hours.

In order to make $10,000 in one month from overtime, you would need to figure out how many extra hours per work you need to work.

Idea #20 – Some Gambling?

This is the RISKIEST option of all of them. And highly not recommended as a strategic way to double $10k quickly.

Gambling is a way to risk cash in the hopes of making more cash.

While it can be thrilling and exciting, it’s important to remember that gambling is also a form of entertainment that comes with risk. If you’re able to afford it, gambling can be a way to double your money- but be aware that you could also lose everything you put in.

What is the quickest way to double your money?

How to double your money quick is simple. You need to side hustle and start a business.

Also, the stock market is a simple way to double your money with the rule of 72.

Following billionaire morning routines can be helpful in setting up solid habits for success.

How can I double my money in 24 hours?

The answer to this question is simple… Doubling the money in 24 hours is not practical or doable. You might be able to double your money in 24 hours, but it’s also possible that you could lose everything in one day.

Pay attention to scams if you think you can double your money in 24 hours.

You are better off learning how to make 10k a month.

Which investments are the safest and which are the riskiest?

First of all, it depends on your education, experience, and background.

The best way for someone to double their income is by leveraging their time with the right strategies.

Investments that are considered safe are investments that have an average return on investment of about 8-12% per year. Investing in index funds and ETFs typically have a lower risk. Investing in individual stocks is riskier, but they have an average return on investment of about 10-75% per year.

The riskiest option is the idea that you don’t understand how to double your money and you could end up losing more money.

Best Way to Invest 10K

The best way to invest 10,000 is through stocks. Investing in stocks can be risky and make you lose money, but it also has a high potential for gaining value.

As such, this topic needs to be done in more depth to understand how investments in the stock market work. For now, here are some articles to start to understand the returns of stock investing.

Learn all of the ways you can learn how to invest 10k.

You must do your research on companies, know your risk tolerance, understand the volatility of the markets, and be wary of the news.

Which Strategic Ways on How to Double my Money Quickly will you Pick?

You can choose from many classic way and options, but here are a few that we think would be the most effective.

Thankfully, there are many ways to make money online. But when it comes to making a quick buck, which approach should you take?

In this post, we have outlined the 20 popular routes to double your $10k fast. Your retirement plan relies on your investment of 10k.

However, any of these options is a time-consuming process that takes a lot of hard work and dedication. So, you cannot quit halfway through when things get tough.

This is what you want to do in order to be financially secure and take care of all your needs.

Be successful in doubling your 10k by setting a deadline to make it happen.

Then, your next goal will be how to turn 10k into 100k.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

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Investing requires resolve and a long-term vision, but it doesn’t actually have to involve the stock market. Here’s a guide to non-stock investing options:

Precious Metals

During the Great Recession, precious metal commodities like gold and silver were all the rage. As the stock market lost more than 50 percent of its value, gold and silver started a monumental rise in price. Gold went from around $600 per ounce in 2007 to peak at $1,900 per ounce in 2011.

The prices of the most popular commodities have since fallen from their peak; but had you invested in precious metals for that period of time (and others like it in history), you would have netted a healthy profit for your portfolio.

Relying solely on precious metals for your portfolio is extremely risky, though, and I wouldn’t suggest it. However, commodities do tend to act in an opposite manner to the stock market, and using precious metals as a hedge against volatility can be a great strategy.

Related >> Beginners’ Guide to Investing

Peer-to-Peer Lending

Peer-to-peer lending is one of my favorite alternative investments. It is the ultimate win-win for consumers. Consumer “A” gets a loan from Consumer “B” (and typically a large group of other investing consumers). Then Consumer A gets to pay off high-interest-rate credit card debt that stands at 20 percent with a personal loan that has a fixed term and a fixed interest rate of, say, 10 percent. This also means a fixed payment each month.

For their part, Consumer B and his friends get to enjoy a much higher rate of return than they would be able to reach with cash sitting in the bank. Both sides win: The borrower gets a lower rate and a fixed term to pay off the loan while the lender enjoys a healthy rate of return.

It’s true that some see peer-to-peer lending as a risky asset class because you are relying on strangers to pay the loan back. As with any type of investing, you don’t want to put all your eggs into one basket. Diversifying your portfolio of loans helps tremendously when you do experience a loan that goes unpaid. (Plus, P2P websites like Lending Club and Prosper have collection methods that kick in on borrowers who miss payments.)

I’ve become so enamored with peer-to-peer lending that I decided to embark on a little experiment. I divvied up about half of my Solo 401(k )contribution into both Lending Club and Prosper. The goal of the experiment was two-fold:

  1. See how much interest I could make with this investment strategy.
  2. Compare the two companies to see which one provided better earnings.

Overall, I was pleased with the results. Both companies netted double-digit returns for me, and I plan to add more money into these investments.

Owning a Business

Hands down, I think the alternative investment with the highest potential rate of return is running your own business. This isn’t without risk — the vast majority of small businesses die within five years — but if you can outlast the statistics, it can be extremely rewarding.

I used to work for a company providing financial advisory services. I took a huge leap of faith, started a business, and started blogging. My financial planning business has thrived and my blog has earned well over six figures since I started.

The beautiful thing about running a small business is not only are you the boss, but you can grow and maintain it as much as you want. Maybe you love your full-time job but you want to try out a new skill. Spend your nights and weekends trying it out, earn some extra dough, and keep working full time. Even a little side income can make a huge difference in your financial life, and when you don’t have time to maintain it, then slow down and focus on other priorities.

Related >> Best side jobs for extra cash

Real Estate

If you’re interested in…

-significant cash flow

-leveraging other people’s money

-enjoying large tax write-offs

…then real estate can be a great choice.

Let me be clear so I don’t sound like a late-night infomercial: Real estate investing is difficult. The learning curve is significant. When you first start, you *are* putting all of your eggs in one basket because you will only have one property to rent out or flip. A previous GRS writer shared his experience of rushing into real estate investing.

Many people have lost their shirts trying to get rich with real estate. Even Dave Ramsey went bankrupt based on a series of really poor real estate investments at the start of his career.

Amid all the horror stories about crazy tenants, poor cash flow, and something always breaking, there is some significant income to be had from real estate investing. What’s better is you don’t have to put 100 percent down on a house. You can usually get away with 25 percent to 35 percent as a down payment and let the bank fund the rest of the purchase. This leverage means you can leave more money in reserve for the inevitable issues that pop up or to expand into a larger number of properties faster.

Bonds

Nearing retirement? You’ll want to cut back on your stock allocation and put some of those funds into bonds. You might associate bonds with the stock market because they are so commonly paired with stocks in a portfolio, but technically bonds are traded on the bond market. You won’t generate sky-high returns here, but you will also cut out a majority of the volatility you get from stocks. Very few bond investments have lost 50 percent of their value for two years and then returned 100 percent the next four years.

Related >> Investing 101: How Bonds Work

Investing in individual bonds carries more risk because they are not diversified. If the company that issues the bond goes under, you might not get your principal investment back. However, bond ETFs and mutual funds can provide the non-stock exposure of bonds with the added benefit of diversification.

Certificates of Deposit

The lowly certificate of deposit or CD. Simple. Basic. Low return.

And sometimes. . . just what the doctor ordered.

A CD is a simple financial product where you hand over some cash to a bank or credit union for a set period of time and a set interest rate. If you have less than $250,000 in total assets at that bank or credit union — across *all* accounts — your investment principal is guaranteed by the FDIC. You literally cannot lose the principal balance if you use this method.

The upside of CDs is stability and guarantee. The downside is, at least right now, inflation will be eating away at your principal balance. Certificate of deposit rates are extremely low due to the Federal Reserve’s monetary policies but if rock-solid security is your number one investment driver, this is worth a look.

Related >> Best CD Rates

Annuities

Ewww. . . annuities. Don’t all personal finance bloggers hate annuities?

Listen, I get it. Annuities CAN be bad. Terrible, in fact. Fees, confusing contract terms, and an encyclopedia of fine print.

Most people don’t realize there are several types of annuities: fixed, immediate, variable, equity-indexed, and several more.

Hear me out. The right annuity with the right, sensible, un-scammy terms can be a solid foundation for a retirement portfolio.

In fact, Mike Piper, a previous GRS contributor, shared how you can create retirement income by purchasing the right annuity.

But like any investment, buy with caution. And be wary of commission-hungry, shady advisers just looking to make a sale vs. matching you with an investment that works toward your financial goals.

Yourself

Last but certainly not least, investing in yourself can pay dramatic dividends. I have personally done this in a variety of ways. Besides getting my CFP certification — certified financial planner — another major investment I made in myself was signing up for a coaching program.

I can’t blame you if you’re skeptical about coaching programs. I was too. It’s been more than three years since I signed up for The Strategic Coaching program and it has literally been the best investment I ever made. The mentoring has allowed me to grow my business significantly, and the return on what I paid has been tremendous. It makes a 9 percent return in the stock market look like nothing.

In all, when you think of investing, you don’t have to immediately think of bull or bear markets or even markets at all. There are other avenues to explore. Let us know what’s working for you in the comments section below.

Source: getrichslowly.org

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Your Guide to the Sharing Economy – MintLife Blog

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peer-to-peer lending). 

Looking for a quick definition? Keep the one below in mind.

Sharing economy definition

The sharing economy is a peer-to-peer lending system, often facilitated by online platforms, that allows individuals or small companies to share goods and services with one another.

To better understand the sharing economy, it’s helpful to see how it fits into the bigger picture of novel industries that are disrupting traditional ones. 

Sharing economy vs on-demand economy

The on-demand economy is a name for the new suite of services most people have available with their phone. “On-demand” refers to the fact that, with just a few taps, swipes, and a credit card, there are many goods and services immediately available to consumers. 

For instance, let’s say you need groceries delivered — there’s an app for that. A fleet of gig-working delivery drivers (more on that next) is ready on demand to bring you the bread, almond milk, and kale that you need ASAP. 

How does this differ from the sharing economy? When investors, economists, and consumers talk about the sharing economy, they are referring more specifically to services that facilitate sharing goods. It might not even be on-demand; for instance, if you’re part of a group of people who share power tools, you might not have access to the bandsaw you need until the person who has it now is done in 3 days. 

The sharing economy and the on-demand economy have a lot in common, though, as they both allow peers to collaborate through the use of a third-party app. That brings us to another buzzword you might be hearing a lot about these days. 

Sharing economy vs gig economy

The gig economy focuses more on the workers’ side, rather than the consumer. For instance, both sharing economy services (like Airbnb) and on-demand economy services (like TaskRabbit), and even services that fall into both categories (like Uber), can be considered forms of gig economy work. 

The gig economy consists of workers who operate on short-term contracts, performing jobs through an app-based service. When investors and economists talk about the gig economy, they’re usually talking about the transition in many sectors toward this sort of short-contract-based work. 

The quintessential example is a service like Uber or Lyft. Rather than a full-time, wage-based job like taxi driver, many people are instead working part-time, contract-based, often precarious positions as ride-share drivers. That’s the gig economy in action. 

Examples of the sharing economy

We’ve already discussed a few types of sharing economy services, but what are a few more familiar examples? The answer is that there’s no set definition or criteria for what makes a service a part of the sharing economy. That said, there are a few examples that you’re probably familiar with:

  • Ride-share: Services like Uber and Lyft are great examples of the sharing economy — a driver shares their car (and time) with a consumer, who gets a lower-cost ride out of the arrangement. 
  • Car-share: Some services also allow you to share your car with peers, not by driving them, but by allowing them to rent it. 
  • Tool-share: Power tools are expensive. Luckily, the sharing economy makes it easy to see who has a tool you can borrow, and pay a small amount to rent it for a day or two while you complete a project. 
  • Clothing sharing: There are sharing sites for expensive designer clothes that you probably won’t wear more than once. Pay for a subscription, then rent for a few days. 
  • Crowd-funding: Have a new business idea or product concept? You can use services online that allow you to crowd-fund the startup costs. 
  • Peer-to-peer lending: Rather than going through a large financial institution or sketchy loan shop when you need cash, peer-to-peer lending allows consumers to seek financing from other individuals who have a little surplus cash they’d like to grow. 

As mentioned before, there’s no hard-and-fast definition or criteria — pretty much any service that allows people to help each other out can be considered a part of the sharing economy. 

Sharing economy apps

We’ve mentioned that the sharing economy is mostly facilitated by app-based services — but what are these apps? Chances are, you’ve probably already got a lot of them on your phone. Here are a few common sharing economy companies, and what they’re built for:

  • Ride-sharing and taxi alternatives: Uber, Lyft

This is definitely not a complete list. Chances are, if you need some item or service, but don’t want to purchase it yourself, there’s a sharing economy solution out there for you. A simple Google search of “[What you need]” + “sharing app” will likely bring you tons of interesting options to consider. 

Pros and cons of sharing economy

Like anything, the sharing economy comes with plenty of pros and cons to consider. Before going all-in on using sharing apps, let’s take a look at some of the benefits and downsides that come along with the sharing economy.

Pros

  • Sharing services can help you save money
  • Sharing apps give you access to things you might not otherwise have (like power tools or a small loan)
  • They’re often on-demand, too (though not alway), so you can get what you need quickly
  • They allow owners of assets to make a small, steady stream of passive income
  • They’re popular. According to PWC, about 19% of people have participated in the sharing economy, and that number is expected to grow. 

Cons

  • They might be riskier than a traditional business because you’re renting items (like a car) from an individual rather than a company
  • While they might allow for a new income stream, some sharing economy jobs (like rideshare drivers) might not allow you to make a full living
  • Some app companies might inflate prices or take a large commission in order to increase their own profits — be sure to do your research on an app before using it as either a buyer or seller

Overall, for most people, deciding whether using the sharing economy makes sense will be an individual process. For some people, making money with side hustle apps might be a great way to spend some time and earn a little cash. For others, it might not make as much sense. 

If you have a vacation home you don’t use often, it could totally make sense to rent it out to travelers who need a place to stay. Others might not want the hassle associated with cleaning the home and preparing it for the next guests — ultimately, it’s up to you whether participating in the sharing economy makes sense. 

Sharing economy: the takeaways 

The sharing economy is a great way for peers to connect and share goods and services they have access to with people who are looking for access at a bargain price. It can include anything from sharing cars and power tools to peer-to-peer lending and crowdfunding. 

Here’s what to remember:

  • The sharing economy uses apps to allow individuals to connect with each other, sharing their goods and services.
  • It’s closely related to the on-demand economy and gig economy; in fact, there’s tons of overlap when it comes to the apps used in each. 
  • You can use the sharing economy to access things like car rentals, fashionable clothes, power tools, personal loans, and seed money for your ingenious ideas. 
  • Apps like Uber, Vrbo, DailyLook, and Prosper are all popular sharing economy options. 
  • There are pros and cons
    • Pros: Usually inexpensive, a great way to find extra income, and convenient
    • Cons: You have to trust peer lenders and borrowers, and some companies pay workers less than other options, or charge fees that make lending not worthwhile

What options can the sharing economy open up for you? Research the ways that you can start using sharing apps today, and start saving (or making!) money. 

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Apache is functioning normally

When I worked in management consulting, one of my responsibilities was to help my company figure out ways to make money while we slept. As a consulting business, our revenue stream came from selling the hours of the people who worked at our company. But to grow our margins, we knew we had to scale our time. This is where I first learned about passive income — the Holy Grail of the business world.

Now that I’m in my 30s, I think a lot about how to direct my active streams of income into passive income opportunities. Here are some things I’ve learned about active and passive income in my wealth-building journey.

What’s Ahead:

What Is Active Income?

Active income is earned by trading your time for money. Most people at the beginning of their careers are focused solely on earning active income to make a living.

What Is Passive Income?

Passive income is earned from income-producing assets. Someone who has passive income is not trading their time for money. Instead, the assets they own produce income without much involvement from the owner of the asset.

With the rise of financial influencers and the FIRE movement, finding ways to earn passive income has become a popular topic in the personal finance community.

Is Any Income Truly ‘Passive’?

The idea of earning truly passive income sounds amazing, right? But what’s often not discussed about passive income is that unless you inherit passive income-producing assets, creating passive income streams actually requires a substantial amount of active work.

Famous American entrepreneur Gary Vaynerchuk has gone as far as to say that truly passive income doesn’t exist outside of passive public market investing and rental income.

I tend to agree with Gary that the term ‘passive’ income is something of a misnomer. Creating passive income is never truly passive; there is no free lunch when it comes to financial mobility!

But thinking of income in active and passive terms might nonetheless have some benefits for those who are assessing their current financial status and crafting their wealth-building strategy. For that reason, I’ll break down the broad differences between active and passive income streams, as well as the most prominent ways to generate active or passive income.

Pros & Cons of Active Income

Pros

  • Allows you to develop a specific skill or expertise consistently
  • May provide social interaction and camaraderie associated with a traditional worksite

Cons

  • Trades time for money
  • Takes time away from doing other things
  • Cannot scale income potential beyond time constraints
  • Can be taxed at high rates

Pros & Cons of Passive Income

Pros

  • Generates money while sleeping, vacationing, etc.
  • Frees up more time for recreational activities
  • Subject to potential tax deductions
  • Scales income potential beyond time constraints
  • Does not require physical presence at a work site

Cons

  • Often requires you to create active income first
  • Usually harder to create than active income

Types of Active Income

Salary and Wages

The most basic and obvious form of active income is the salary that you earn from a typical job. A salary is a fixed amount received for working a regular schedule like 9 to 5, Monday through Friday. While a salary is a consistent form of active income, it can be taken away at a moment’s notice due to layoffs or downsizing. Most people earn their living from this type of income.

Bonuses and Commissions

Bonuses and commissions are other forms of active income. This type of income is not fixed and can vary dramatically based on the type of work performed. Many jobs can have a bonus or commission element added to a base salary, while other jobs can be 100% commission based.

Real estate agents, commercial real estate sales professionals, and other types of salespeople tend to fall into this income category. 100% commission-based jobs tend to have higher earning potential compared to salaried positions. However, they are also highly competitive, and their profitability is subject to ups and downs based on the economy, seasonality, and other factors.

Read more: How to Become a Real Estate Agent

Consulting and Freelancing

Freelancing and consulting fees are other types of active income that can either make up 100% of one’s income or serve as a side hustle. Those with valuable skills in high demand are often able to build side businesses, selling their time for specific short-term projects or long-term contracts. As of August 2021, there are 57 million freelancers working in the U.S., with 10 million more considering freelancing.

Looking ahead, more and more businesses are noting they’re willing to hire freelancers to support their mission, growth, and revenue.

Being a freelancer or consultant requires an entrepreneurial spirit, as this type of work can be very inconsistent and requires building a strong brand/reputation. Some of the most popular types of freelance work include graphic design, software development, copywriting, and photography.

Read more: 35+ Side Hustle Ideas

Equity Compensation

Equity compensation is a type of bonus that is given out at public or private companies to senior individuals or particularly valuable employees. Different types of equity compensation include straight shares, stock options, and Restricted Stock Units (RSUs).

It’s not uncommon for equity compensation to make up most of an individual’s income. For example, in 2020, 85% of an average CEO’s income was stock-related compensation.

Capital Gains

Buying and selling certain types of assets, like stocks and real estate, can generate capital gains if the asset’s sale price was higher than its original purchase price. For example, you might buy shares in a company while its stock price is low and then sell those shares later after the stock’s price has increased. The difference between the price you paid and the price you sold at is a capital gain.

Generating capital gains as a means of consistent income requires a significant amount of work, expertise, and risk-taking. Capital gains also have different tax treatments depending on how and when they are generated.

Read more: Claiming Capital Gains and Losses

Renting Out Property

Listing your property on sites like Airbnb can help you earn active income. While listing your property for rent may not require a significant investment of time and energy upfront, it’s not a set-it-and-forget-it income source.

Actively managing your listings, communicating with renters, and maintaining your property certainly requires active effort (unless you have a property manager).

Old Goods and Furniture Flipping

I’ve seen lots of people recently on TikTok and Instagram building side businesses by taking old or broken furniture, refurbishing it, and selling it for a profit. If you are handy and have an eye for design, this can be a great way of making active income given the low startup costs.

In addition to making money from selling the furniture, after you’ve built an audience you can sign brand partners and feature their products on your social media pages to generate even more income. Lastly, this type of business is a great way to help recycle old products that would have otherwise been thrown out.

Types of Passive Income

Interest and Dividends

Interest from your savings can be generated from high-yield savings accounts or by investing in CDs or bonds.

Dividends are paid to the shareholders of public companies. Not all companies pay dividends and the amount of dividends paid varies significantly. While earning dividends is passive income, choosing the right investments that generate dividends is a very active and time-consuming process.

In my experience, those looking to earn dividends can typically expect returns of 1–5%.

Rental Income

You can earn passive income from real estate by investing in rental properties, commercial real estate, public real estate investment trusts, or real estate crowdfunding platforms. Income-generating real estate can also provide landlords with tax benefits by deducting depreciation costs, property management expenses, insurance, and other expenses.

But there’s always an active element of real estate investing, no matter what type of real estate you invest in. This includes property management, dealing with tenants, managing relationships with lenders or investors, ensuring upkeep, or simply picking the right real estate projects to invest in. Some forms of real estate investing can become so time consuming that many personal finance experts question if real estate investing can be considered passive at all.

Read more: How to Invest in Real Estate

Peer-to-Peer (P2P) Lending

Peer-to-peer lending has attracted investors looking for an alternative to persistently low interest rates on savings accounts and bond yields. With P2P loans, investors make unsecured personal loans to others and can earn high returns.

While P2P lending has exploded in popularity (check out Lending Club and Prosper), these investments are very risky. The loans are often not secured against collateral, are not FDIC insured, and money invested in P2P lending can be difficult to access in times of economic stress.

Digital Product, Online Course, or Community Development

Creating digital products, courses, or online communities can be one of the best ways to earn passive income if you can package your skills and knowledge and sell it to a group of customers. In today’s digital age, the costs of creating a course, digital product, or community have never been lower, and all you really need is a computer and some creativity.

While there are lots of instances of everyday people earning millions on their digital products, don’t forget that getting to that point likely required a lot of work. Keeping these types of products relevant and up to date after launch also requires time, effort, and attention, not to mention having to market your product and keep up community engagement.

If you are interested in starting something like this up, platforms like Thinkific, Teachable, and Patreon are all options to explore.

YouTube/TikTok Ad Revenue

I became fascinated by the prospect of earning money on YouTube after coming across financial influencer Graham Stephan. Earning money on YouTube or Tik Tok generally comes down to building your channel’s audience and monetizing content through ads or affiliate marketing links. Once your presence meets a critical mass, every video you create has the potential to become an income-generating asset.

On the surface, making money on YouTube seems amazing, but again, it takes a lot of work and dedication to get there. For example, Graham has mentioned having to post videos at least three times a week for several years to get traction. And it often takes audiences of tens of thousands or hundreds of thousands of followers to earn any money.

But there’s lots of potential to earn sizable passive income from YouTube after you build an audience. The average YouTuber can make $3 to $5 per 1,000 video views and the top YouTubers can make millions annually.

Final Thoughts

Passive income can be a great way to earn more while working a regular 9 to 5, or it could fully replace your current stream(s) of active income entirely.

When it comes to building real wealth, however, the discussion around active vs. passive income is more nuanced.

According to a five-year study of 233 wealthy individuals, a common thread between them was that self-made millionaires generated income from multiple sources. 65% of them had three streams of income, 45% had four streams of income, and 29% had five or more streams of income.

These figures suggest that when it comes to building wealth, it’s not just a question of prioritizing passive vs. active income. Rather, it’s about generating multiple streams of income and scaling your time.

Personally, I have four streams of income:

  1. The income I make from my 9 to 5
  2. Investment capital gains
  3. Dividends
  4. Freelancing work

You can leave it to your own creativity and aspirations to find what constellation of passive and active income streams works best for you. But remember, whether you are looking to create passive or active income, there is no free lunch, and any source of income that ultimately becomes passive will likely start as a highly active pursuit.

Read More:

Source: moneyunder30.com

Apache is functioning normally

A common misbelief is that one must be rich to invest. It’s easy to invest with little money in a variety of assets and save for your goals. More platforms let you “micro invest” and purchase small amounts of expensive assets. 

Even if you only invest a few dollars each month, that money can start building wealth.

Consistently investing small amounts can be more effective than waiting to accumulate a lump sum because you can earn compound interest.

Some people may never invest because they don’t think they have enough money.

In This Article

Best Ways to Start Investing with Little Money

It’s possible to invest as little as $5 at a time and diversify your portfolio. As your financial situation improves, you can increase your monthly investments and try more ideas.

1. Invest in Index Funds

Investing in index funds can be the best option to start investing small amounts of money.

First, index funds let you invest in hundreds of companies with a single investment to quickly diversify your portfolio and minimize risk. 

Second, most index funds have low investing fees and expense ratios. For example, a fund with a 0.03% expense ratio costs 30 cents in annual fees.

Most brokers don’t charge trade commissions to buy or sell index funds. Paying fewer fees means you can invest more cash.

Some of the types of index funds you can invest in include:

  • US stocks
  • International stocks
  • Emerging markets
  • Corporate bonds
  • Government bonds
  • Real estate investment trusts (REITs)

The various online stock brokers offer stock and bond index exchange-traded funds (ETFs). These funds trade like individual stocks. The share price fluctuates during the market day and you can buy shares at any time. 

Your 401k provider likely offers index mutual funds. The investing strategy is the same except the share price updates once a day after the stock market closes.

Most online brokers offer index funds and don’t charge any trade commissions. However, some can be easier to invest with when you have little money.

Minimum Investment: $5 (varies by broker)

Betterment 

Using a robo-advisor like Betterment can be one of the easiest ways to invest in index funds. This fully-automated investing app automatically rebalances your portfolio to maintain your target asset allocation.

You can also enable tax-loss harvesting to minimize your taxable investment income by selling investment losses to offset your investment gains. 

You will answer several questions about your age, investment goals and risk tolerance to recommend an investment portfolio of stock and bond index ETFs.

As you grow older, Betterment shifts your portfolio to a more conservative allocation. 

Not having to manage your portfolio is one advantage of using a robo-advisor when you don’t have the time or desire to self-manage your investments.  

Betterment also offers fractional investing so you can buy partial shares of funds to instantly diversify your portfolio.

Other brokers may require you to buy whole shares which makes buying multiple funds at once difficult if you have limited funds. 

You can create a portfolio with $0 and start investing with a $10 initial deposit. The annual account fee for Betterment is 0.25% of your portfolio value. 

Acorns

Another unique way to invest in index funds is by using Acorns. This micro-investing app invests your spare change by rounding up your debit and credit card purchases.

You can choose to invest in a premade portfolio of stocks and bonds with different risk levels. 

Acorns buys fractional shares of index ETFs when with as little as $5. Taxable and retirement investment accounts are available along with an online checking account.

Monthly plan fees range between $1 and $5 per month. 

2. Workplace Retirement Accounts

A workplace retirement account such as a 401k, 403b or a Thrift Savings Plan (TSP), this can be the best place to start investing with little money. See if your employer offers matching contributions. If so, invest enough each month to earn the full match and invest “free money.”

If your workplace doesn’t offer a retirement plan or matching contributions, you can open an individual retirement account (IRA). Most brokers offer IRAs with no account fees or minimum initial deposits. You have multiple investment options. 

One perk of investing with a retirement account is the tax benefits. You only pay taxes once. Traditional contributions reduce your current annual income, grow tax-deferred and you pay income taxes when you make a withdrawal. Roth contributions require you to pay income taxes upfront but your withdrawals are tax-free. 

Your workplace retirement account investment options can include:

  • Stock index mutual funds
  • Bond index mutual funds
  • Target date funds 
  • Company stock

The investment options are different for each employer yet most plans offer target date funds. Choosing a target date fund that’s nearest to your planned retirement year can be a good option. The fund invests in stocks and bonds and adjusts to a conservative risk tolerance as retirement approaches.

If you only decide to invest in a target date fund, you won’t have to rebalance your asset allocation. However, you should monitor the target date fund performance. You may also decide to self-manage your portfolio by buying index funds to reduce your investment fees.

You can invest as little as $1 at a time into each fund. If you’re uncomfortable managing your own retirement account, Blooom can provide a free portfolio analysis and recommend a portfolio allocation.

Minimum investment: $1

3. Individual Stocks

After establishing an index fund portfolio, you may decide to buy stock in individual companies. There are many online brokers to choose from and most don’t charge account fees or trade commissions to buy or sell shares. 

You may decide to buy dividend-paying stocks to earn consistent passive income. Another option is holding companies with strong growth potential that can beat the stock market but may not pay a dividend.

M1 Finance is one of the best free investing apps. You can buy fractional shares of stocks and ETFs with a minimum $25 investment. There are also premade ETF portfolios that can make it easier to diversify. As you invest new money, M1 rebalances your asset allocation. 

The minimum initial deposit is $100 for taxable accounts and $500 for retirement accounts to start using M1 Finance. 

You can also consider investing with Charles Schwab. You can buy fractional stock slices as small as $5 for many stocks and there are no trade fees or account minimums. But, you will need to self-manage your investment portfolio.

Minimum investment: $5  

Tip: Using one of the top investment sites can make it easier to research stocks.

4. Crowdfunded Real Estate

Real estate is a longstanding way to earn passive income without relying on the stock market. However, owning investment properties is expensive and can be time-consuming. 

Thanks to real estate crowdfunding, you can invest small amounts of money into commercial and multi-family real estate. These properties have multiple tenants and can provide a more stable income than a single-family rental property. A property manager screens the tenants, collects rent and makes repairs.

You can earn recurring dividends from monthly rent payments. It’s also possible to make money when a property sells for a higher value than the original purchase price.

DiversyFund is one of the best crowdfunding platforms. You can start investing as little as $500. The Growth REIT lets you invest in multifamily apartments across the United States.

One downside of crowdfunded real estate is the multi-year investment commitment. Most platforms require a five-year investment to avoid early redemption fees. As a tradeoff for the long-term commitment, you can earn annual returns that compete with the historical S&P 500 average return of 7% per year.  

Minimum investment: $500          

5. Small Business Bonds

The bond index funds you invest in hold corporate and government debt. Investing in small business bonds can help you earn a higher yield. Worthy Bonds yield 5% per year and let you invest as little as $10 at a time. 

Each bond matures in 36 months but you can sell your position sooner with no early withdrawal penalty.

Read our Worthy Bonds review to learn more.  

Minimum investment: $10

6. High-Yield Savings Accounts

It’s wise to keep cash that you need instant access to in a high-yield savings account. Banks are a low-risk way to earn passive income but your returns are not as high.  

You might consider keeping your emergency fund in a high-yield savings account that doesn’t charge any account fees. Also, consider opening separate “sinking fund” accounts for various savings goals to avoid borrowing money. A savings account can also be a good place to park cash until you decide where to invest it and earn a higher potential return.

Ally Bank has a competitive interest rate for the high-yield savings account. There are no account fees or minimum balance requirements. The Surprise Savings booster tool can help you calculate a “safe-to-spend” amount and transfer your extra cash into savings.

Minimum investment: $1

7. Certificates of Deposit

Investing in stocks and bonds can provide higher investment returns but carry more risk. A bank certificate of deposit locks in a specific interest rate for the investment term. For example, a 12-month term CD has the same interest rate for the next 12 months.

Instead of keeping your free cash in an interest-bearing savings account, consider opening a bank CD with a similar or higher interest rate.

If the savings account interest rate drops, the CD can earn more interest until the CD matures. Most CDs have early redemption penalties if you withdraw the cash before the term ends. At the end of the term, you can redeem your CD balance penalty-free or renew the CD at the then-current term.

Some banks, including CIT Bank, offer no-penalty CDs. These CDs don’t charge an early withdrawal penalty but may offer lower yields than a term CD.

As bank interest rates are low, the passive income you earn from CDs can be lower than the inflation rate. But earning some interest income can be better than nothing. 

Minimum investment: $100 

8. Peer-to-Peer Investing

You earn income from savings accounts and bank CDs as the bank lends your money at a higher interest rate. Peer-to-peer lending platforms let you earn a higher rate as you lend directly to the borrower and bypass the bank. 

Prosper lets you invest in crowdfunded personal loans with a three-year or five-year repayment term. Borrowers make monthly payments and you make money from the interest payment, minus a 1% service fee. The historical annual returns are between 3.5% and 7.6%.

You can lose money if the borrower defaults on the loan. To avoid losing money, Prosper lets you buy notes in $25 increments and recommends a $2,500 initial investment to properly diversify. You can invest in multiple loans to diversify your portfolio. 

Prosper also assigns each borrower a risk rating and you can see basic credit profile details. There’s also an auto-invest feature that spreads your investment across multiple risk ratings. You might be able to easily diversify your portfolio by auto-investing and avoid investing in too many risky loans.  

Minimum investment: $25

9. Physical Gold

Precious metals such as physical gold and silver are a popular alternative asset. Unless you invest in gold royalty stocks, you won’t earn dividend income. You make money by selling your precious metal investments above your purchase price.

Buying gold coins and bars can be one of the best ways to invest in gold. Physical gold is expensive and you may not be able to buy an entire ounce or gram at once. 

Vaulted lets you buy fractional shares of physical gold bars. Your stash is held at the Royal Canadian Mint. Once your balance is high enough, you can request FedEx delivery to receive your physical gold. There is a 1.8% transaction fee to buy or sell and a 0.4% annual maintenance fee.

It’s also possible to invest in gold trust ETFs that trade on the stock market. Most investing apps let you trade these funds. The share price mimics the price of physical gold.

But most gold ETFs don’t offer physical delivery as the fund family owns the bullion.

Minimum investment: $10

10. Cryptocurrency

When you’re deciding what to invest in first, cryptocurrency probably isn’t going to be at the top of the list. After all, this digital asset is highly volatile and doesn’t earn interest.

Many people who buy crypto do so as an alternative to stocks and gold.

For example, you might buy cryptocurrency as a way to diversify once you hold a sufficient amount of stocks, index funds and gold.

The most popular cryptocurrency is Bitcoin. This cryptocoin has the best name recognition and more merchants accept it as payment instead of paper currency.

There are other “alt-coins” like Ethereum that can also be worth owning if you believe in the long-term potential of cryptocurrency. 

It has been fairly difficult to buy cryptocurrency but more platforms are making it easy to buy cryptocurrency. PayPal and Square let you buy Bitcoin and use it to pay for purchases.

However, you won’t be able to move your Bitcoin balance off of their platform.

Another easy way to buy cryptocurrency is through an online broker like eToro. You can trade cryptocurrency futures after a minimum $50 initial deposit.

EToro also lets you copy the investment portfolios of experienced cryptocurrency investors which can improve your income potential.

A third way to buy cryptocurrency is using a digital currency exchange such as Coinbase. Buying directly from an exchange lets you own real Bitcoin and alt-coins. You can transfer them to a cryptocurrency wallet for added security from hackers.

No matter where you decide to buy cryptocurrency, you can buy fractional shares of Bitcoin and other coins. Investment minimums and transaction fees vary by platform.

Minimum investment: $2 (varies by platform)  

11. Treasury Bonds

Most investors get exposure to government bonds by holding bond index funds in their brokerage account or 401k workplace retirement plan.

As bonds can be pricey and confusing to buy, bond funds make it easy to earn passive income.

You can have more control over which bonds you own by buying U.S. Treasury bonds. You can choose the maturity date. Each Treasury bond has a $100 minimum investment with a maturity date of up to 30 years. 

It’s also possible to buy Treasury Inflation-Protected Securities (TIPs) as a hedge against future inflation.

Another option is purchasing Series I or Series EE Savings Bonds. Both types of savings bonds have a $25 minimum investment.  

You can buy Treasury bonds from TreasuryDirect.

Minimum investment: $100 for Treasury notes and bonds ($25 for savings bonds)

12. Fine Wine

A long-term investing idea is owning fine wine. You can open a standard portfolio at Vinovest with a $1,000 minimum initial investment.

Vinovest automatically builds your wine portfolio making it easy to start if you’re unfamiliar with wine investing.

Each bottle in your portfolio remains in climate-controlled cellars across the world and is insured against damages. You decide when to sell your wine. It’s possible to request delivery if you want to open a bottle.

Collectible wine can increase in value as it ages and the scarcity of unopened bottles increases. Wine investing is like owning physical gold and doesn’t earn dividend income.

It can take up to 30 years to earn the best value before you sell a bottle.

Minimum investment: $1,000

13. Fine Art

Another unique investment option is investing in fine art. Masterworks lets you buy shares in classic and modern pieces with a $1,000 minimum investment.

The holding period for most pieces is between three and ten years. You earn a profit if the piece sells for a profit. 

Due to the relatively high initial minimum investment and waiting years to earn income, you may invest small amounts of money in other ideas first to make money fast. 

Minimum investments: $1,000

Summary

There are many ways to start investing little money today and earn recurring income. Many platforms have small minimum investments which make it easy to try several ideas and diversify your portfolio.

As you increase your income, you can boost your monthly investment. 

How do you invest your money? Which idea are you going to try first? 

Josh is a personal finance writer and Founder of MoneyBuffalo.com. He has been featured in publications like Student Loan Hero, Well Kept Wallet and the US News and World Report.

Source: debtdiscipline.com

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Real estate is a popular investment for several reasons, including the ability to generate online cash flow through rental income and the possibility for appreciation to increase the value of the investment over the long run.

When you think about investing in real estate, you probably think about owning rental properties and becoming a landlord.

Unfortunately, managing rental properties can require a lot of work and headaches, so many people choose not to go down this path.

Thankfully there are other ways to invest in real estate and get the perks without requiring you to become a landlord.

These hands-off real estate investments can be perfect for adding some diversification to your portfolio, or for serving as an introduction to the world of real estate investing.

If you’re interested in real estate as an investment but you don’t have the time or desire to manage properties and deal with tenants, here are 4 options that you can consider.

1. REITs

Through a real estate investment trust (REIT), investors can buy shares in real estate portfolios. REITs may own office buildings, retail properties, apartment complexes, hotels, and any other type of property. Most REITs specialize in a particular type of property, so there is a great deal of variety that is available to investors.

The REIT collects rent from tenants and then distributes the income to shareholders in the form of dividends.

REITs can be:

  • Publicly traded – listed on a national securities exchange where shares can be bought or sold, and regulated by the SEC.
  • Public but non-traded – not traded on a national securities exchange, but registered with the SEC.
  • Private – not traded on a national securities exchange and not registered with the SEC.

There are some significant differences between these types of REITs. One of the most important issues to consider is liquidity. Publicly traded REITs can be bought or sold easily, so liquidity is not an issue. However, non-traded REITs lack liquidity and you may need to hold the investment for at least few years. The specifics will vary from one REIT to another, but liquidity is something that should be considered when you are researching your options.

Although non-traded REITs may lack liquidity, they can make up for the lack of flexibility with higher returns. Of course, the performance will vary from one REIT to another, but the main reason to consider a non-traded REIT over a publicly traded REIT would be for the possibility of higher returns.

If you decide that a REIT may be the right type of investment for you, you’ll have plenty of options. See this list of the best REITs for 2019.

2. Real Estate Crowdfunding

Real estate crowdfunding was made possible by the passing of the JOBS Act in 2012. Like investing in a REIT, investing through a crowdfunding platform allows you to get many of the perks of real estate investing without the responsibilities of owning or managing property.

There are many different types and varieties of crowdfunding platforms, but they all allow investors to have an ownership interest with much smaller investments as compared to buying properties on your own.

Many crowdfunding platforms are open only to accredited investors, but there are several that are open to all investors.

To qualify as an accredited investor, you will need an annual income of at least $200,000 ($300,000 for joint filers) or a net worth of at least $1 million, excluding your primary residence.

It’s important to know if you qualify as an accredited investor because it will determine which crowdfunding platforms are available to you. But don’t worry if you’re not an accredited investor, there are still several good options, and we’ll look at them in just a minute.

Like REITs, crowdfunding platforms also tend to specialize, and there are platforms for all different types of real estate.

Some crowdfunding platforms allow you to invest in individual properties, where you can choose the specific investments, and others involve investing in a portfolio of properties.

Here are some of the leading real estate crowdfunding platforms.

Fundrise

Fundrise is one of the most popular crowdfunding platforms and it is open to all investors, regardless of whether you are accredited or non-accredited.

There is a minimum investment of $500, and it’s very quick and easy to get started. With the $500 investment, you can invest in their Starter Portfolio, which includes investment in apartment complexes, single-family rental homes, and commercial properties. Some of their projects are renovations and others are new construction.

Aside from the Starter Portfolio, Fundrise also offers 3 different Core Plans: Supplemental Income, Balanced Investing, and Long-Term Growth.

Fundrise lists historical annual returns of 8.7% – 12.4%.

Learn more in our Fundrise review.

Groundfloor

Groundfloor is a very unique platform. It is one of the only options for non-accredited investors to invest in individual projects, as opposed to the portfolio approach used by others, like Fundrise.

Groundfloor allows house flippers to get loans in a peer-to-peer lending style. As an investor, you can choose the exact projects that you want to invest in.

The investments through Groundfloor are short-term, typically 6-12 months, and they claim to produce 10% returns on average.

The minimum investment is just $10, which makes it accessible to anyone. All you need to do is pick the projects that you want to invest in, and get started.

You can view the details of each project, like the grade, interest rate, projected term, and loan to value.

To learn more, see our Groundfloor review.

DiversyFund

DiversyFund provides investors with the opportunity to diversify their holdings into a sector that has traditionally done very well, commercial real estate.

The minimum investment is only $500, and the fact that non-accredited investors can invest with them is a definite bonus.

DiversyFund is different from most other real estate crowdfunding platforms in that their REIT actually owns the multi-family apartment properties held in the trust. They buy, manage – and when necessary – sell properties in the trust.

You can expect a 7% preferred return before DiversyFund receives any profit split. Then investors earn 65% of the cash flow profits above the 7%. Once investors have made 12% per year, any remaining profits are split 50/50 between investors and DiversyFund.

To learn more, read our full DiversyFund review here.

RealtyMogul

RealtyMogul offers a few different types of investments, including individual properties and public non-traded REITs.

You’ll need to be an accredited investor in order to invest in the individual properties. These investments typically range from 3-7 years and require minimum investments from $15,000 – $50,000.

However, the REITs are open to all investors, but they do require a minimum investment of $5,000.

To learn more, see our RealtyMogul review.

Rich Uncles

Rich Uncles may be a great option for getting started with real estate because it is open to all investors, and because they have an incredibly-low minimum investment of just $5.

Like Fundrise, Rich Uncles takes a portfolio approach. You can invest in Rich Uncles through one of their REITs. They currently have two different REITs available, the BRIX REIT (student and multi-family housing, restaurants, convenience stores, and fitness centers) and the NNN REIT (single-tenant office, industrial and retail properties).

The BRIX REIT has an estimated annualized dividend of 6% and the NNN REIT has an estimated annualized dividend of 7%.

PeerStreet

Unlike the other platforms we’ve covered so far, PeerStreet is available only to accredited investors.

PeerStreet allows you to invest in private real estate loans with historical returns at 6-9%, with 6-36 month terms.

You’ll be able to pick the specific loans that you want to invest in, and you can invest a minimum of $1,000 per note.

To learn more, see our PeerStreet Review.

EquityMultiple

Like PeerStreet, EquityMultiple is an option only for accredited investors. Through EquityMultiple, you will be able to invest in commercial properties, and you’ll choose the specific projects that you want to invest in.

The investments will be in commercial real estate, with a minimum investment of $5,000. You can invest in syndicated debt, preferred equity, or equity.

Read our full review of EquityMultiple.

FarmTogether

FarmTogether is also only for accredited investors. It’s a bit different from the others in that it allows you to invest specifically in farmland properties.

Based in San Francisco, California, the company is relatively new but already has over $1 billion invested in farmland through their platform.

Farmland is a true alternative investment, one that is an actual physical commodity and that is an uncorrelated asset. It often maintains it’s value while stocks, bonds and real estate show sharp drops. Since 1972 it has outperformed every other major asset class!

FarmTogether aims to have annual returns of between 8%-15%, including yearly cash payouts of between 3%-9%.

The investments in farmland have a minimum investment of anywhere from $10,000-$25,000.

Read our full FarmTogether review here.

For a more in-depth look at the subject of real estate crowdfunding, please read Kevin’s Ultimate Guide to Real Estate Crowdfunding.

Crowdfunding Site Fees Account Minimum Accredited Investor Review
* Groundfloor None $10 No Review
* DiversyFund None $500 No Review
* Fundrise 1%/year $500 No Review
* RealtyMogul 0.30% – 0.50%/year $5,000 No Review
* stREITwise 3% up front fee, 2% annual management fee. $1,000 No Review
* FarmTogether Intake fee of between 0.5% and 1.0%. 1% annual management fee. $10,000 Yes Review
CrowdStreet None $10,000 Yes Review
Yieldstreet 1-4%/year $2500 No
Equity Multiple 0.5% service charge + 10% of all profits $5,000 Yes Review
PeerStreet 0.25% – 1.0% setup fee $1,000 Yes Review
Sharestates 0-2% setup fee $1,000 Yes
Patch of Land 0-3% of loan total $1,000 Yes
Modiv None $1000 Yes Review
RealCrowd None $5,000 Yes
Cadre Intake fee of between 1-3%. 1.5-2% annual management fee. $25,000 Yes Review

3. Mutual Funds And ETFs

While REITs invest in real estate, there are mutual funds and ETFs that invest in REITs, which essentially allows you to spread your investment across several different REITs.

Likewise, there are also ETFs that invest in REITs.

Because mutual funds and ETFs are quick and easy to buy and sell, this presents a very easy option for getting started quickly. If you already have account somewhere like Vanguard or Fidelity, you can easily find a number of options.

This article covers a number of the best real estate mutual funds, and this article covers the best real estate ETFs.

4. Invest In The Industry

The last option that we’ll look at is to invest in the industry. This may be considered an indirect way to invest in real estate, but it could be a good option, depending on your situation.

You can buy stock of business in construction and other real estate types of industries. It’s a different approach than investing in rental properties or commercial properties, but your investment will be influenced by the real estate market as a whole.

There Are Lots Of Real Estate Investing Opportunities

Real estate presents plenty of different investment opportunities.

If you’ve never really considered investing in real estate because you don’t want to own rental properties or be a landlord, you may want to look at these options discussed in this article.

The options listed can provide an excellent introduction to real estate without putting any extra burden or commitments on yourself.

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Source: biblemoneymatters.com

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How Do Payday Loans Work? – SmartAsset

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Many Americans have income that fluctuates from week to week. When incomes are unsteady, any unexpected expense can leave you coming up short. If you don’t have a fully funded emergency fund, you may find yourself looking around for loans to bridge the gap and get you to your next paycheck. Payday loans are out there, but at a high cost to borrowers. Before taking out a payday loan you may want to first make a budget. You can work with a financial advisor who can help you make a long-term financial plan that you can budget your finances to meet. 

Payday Loans: Short-Term Loans with a High Price

What are payday loans? Say you’re still 12 days away from your next paycheck but you need $400 for emergency car repairs. Without the $400 your car won’t run, you won’t make it to work, you’ll lose your job and possibly lose your housing too. High stakes.

If you go to a payday lender, they’ll ask you to write a future-dated check for an amount equal to $400 plus a financing fee. In exchange, you’ll get $400. You’ll generally have two weeks or until your next paycheck to pay that money back. Say the financing fee is $40. You’ve paid $40 to borrow $400 for two weeks.

If you pay back the money within the loan term, you’re out $40 but you’re not responsible for paying interest. But the thing is, many people can’t pay back their loans. When that happens, the money they borrowed is subject to double-digit, triple-digit or even quadruple-digit interest rates. It’s easy to see how a payday loan can lead to a debt spiral. That’s why payday loans are illegal in some places and their interest rates are regulated in others.

When your loan term ends, you can ask your payday loan lender to cash the check you wrote when you agreed to the loan. Or, you can roll that debt into a new debt, paying a new set of financing fees in the process. Rolling over debt is what leads to a debt spiral, but it’s often people’s only choice if they don’t have enough money in their account to cover the check they wrote.

Are Payday Loans a Good Idea?

Not all debt is created equal. An affordable mortgage on a home that’s rising in value is different from a private student loan with a high-interest rate that you’re struggling to pay off. With payday loans, you pay a lot of money for the privilege of taking out a small short-term loan. Payday loans can easily get out of control, leading borrowers deeper and deeper into debt.

And with their high-interest rates, payday loans put borrowers in the position of making interest-only payments, never able to chip away at the principal they borrowed or get out of debt for good.

Payday Loans and Your Credit

Payday loans don’t require a credit check. If you pay back your payday loan on time, that loan generally won’t show up on your credit reports with any of the three credit reporting agencies (Experian, TransUnion and Equifax). Paying back a payday loan within your loan term won’t boost your credit score or help you build credit.

But what about if you’re unable to repay your payday loan? Will that payday loan hurt your credit? It could. If your payday lender sells your debt to a collection agency, that debt collector could report your unpaid loan to the credit reporting agencies. It would then appear as a negative entry on your credit report and lower your credit score. Remember that it takes seven years for negative entries to cycle off your credit report.

Having a debt that goes to collections is not just a blow to your credit score. It can put you on the radar of some unsavory characters. In some cases, debt collectors may threaten to press charges. Because borrowers write a check when they take out a payday loan, debt collectors may try to press charges using laws designed to punish those who commit fraud by writing checks for accounts with non-sufficient funds (these are known as NSF checks).

However, future-dated checks written to payday lenders are generally exempt from these laws. Debt collectors may threaten to bring charges as a way to get people to pay up, even though judges generally would dismiss any such charges.

Alternatives to Payday Loans

If you’re having a liquidity crisis but you want to avoid payday lenders, there are alternatives to consider. You could borrow from friends or family. You could seek a small personal loan from a bank, credit union or online peer-to-peer lending site.

Many sites now offer instant or same-day loans that rival the speed of payday lenders, but with lower fees and lower interest rates. You could also ask for an extension from your creditors, or for an advance from your employers.

Even forms of lending we don’t generally love, like credit card cash advances, tend to have lower interest rates than payday loans do. In short, it’s usually a good idea to avoid payday loans if you can. Instead, consider working on a budget that can help you get to your next paycheck with some breathing room, and make sure you have a rainy day fund.

The Bottom Line

When considering a short-term loan, it’s important to not just look for low-interest rates. Between fees and insurance policies, lenders sometimes find ways to bump effective interest rates to triple-digit levels even if they cap their APRs. The risks of taking a payday loan bring home the importance of working hard to build up an emergency fund that you can draw on.

Tips for Retirement Planning

  • If you’re not already preparing for retirement then it’s a good idea to create a retirement plan and make sure you’re contributing to it regularly. If you’re overwhelmed or don’t know where to begin, a financial advisor can help you map it all out. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Not sure how much you need to save for retirement? Consider using our free retirement calculator to get the number you need so that you can start making the right progress.

Photo credit: ©iStock.com/PeskyMonkey, ©iStock.com/Kirby Hamilton, ©iStock.com/Joe_Potato

Amelia Josephson
Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia’s work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.

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In Best Low-Risk Investments for 2023, I provided a comprehensive list of low-risk investments with predictable returns. But it’s precisely because those returns are low-risk that they also provide relatively low returns.

In this article, we’re going to look at high-yield investments, many of which involve a higher degree of risk but are also likely to provide higher returns.

True enough, low-risk investments are the right investment solution for anyone who’s looking to preserve capital and still earn some income.

But if you’re more interested in the income side of an investment, accepting a bit of risk can produce significantly higher returns. And at the same time, these investments will generally be less risky than growth stocks and other high-risk/high-reward investments.

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Determine How Much Risk You’re Willing to Take On

The risk we’re talking about with these high-yield investments is the potential for you to lose money. As is true when investing in any asset, you need to begin by determining how much you’re willing to risk in the pursuit of higher returns.

I’m going to present a large number of high-yield investments, each with its own degree of risk. The purpose is to help you evaluate the risk/reward potential of these investments when selecting the ones that will be right for you.

If you’re looking for investments that are completely safe, you should favor one or more of the highly liquid, low-yield vehicles covered in Best Low-Risk Investments for 2023. In this article, we’re going to be going for something a little bit different. As such, please note that this is not in any way a blanket recommendation of any particular investment.

Best High-Yield Investments for 2023

Table of Contents

Below is my list of the 18 best high-yield investments for 2023. They’re not ranked or listed in order of importance. That’s because each is a unique investment class that you will need to carefully evaluate for suitability within your own portfolio.

Be sure that any investment you do choose will be likely to provide the return you expect at an acceptable risk level for your own personal risk tolerance.

1. Treasury Inflation-Protected Securities (TIPS)

Let’s start with this one, if only because it’s on just about every list of high-yield investments, especially in the current environment of rising inflation. It may not actually be the best high-yield investment, but it does have its virtues and shouldn’t be overlooked.

Basically, TIPS are securities issued by the U.S. Treasury that are designed to accommodate inflation. They do pay regular interest, though it’s typically lower than the rate paid on ordinary Treasury securities of similar terms. The bonds are available with a minimum investment of $100, in terms of five, 10, and 30 years. And since they’re fully backed by the U.S. government, you are assured of receiving the full principal value if you hold a security until maturity.

But the real benefit—and the primary advantage—of these securities is the inflation principal additions. Each year, the Treasury will add an amount to the bond principal that’s commensurate with changes in the Consumer Price Index (CPI).

Fortunately, while the principal will be added when the CPI rises (as it nearly always does), none will be deducted if the index goes negative.

You can purchase TIPS through the U.S. Treasury’s investment portal, Treasury Direct. You can also hold the securities as well as redeem them on the same platform. There are no commissions or fees when buying securities.

On the downside, TIPS are purely a play on inflation since the base rates are fairly low. And while the principal additions will keep you even with inflation, you should know that they are taxable in the year received.

Still, TIPS are an excellent low-risk, high-yield investment during times of rising inflation—like now.

2. I Bonds

If you’re looking for a true low-risk, high-yield investment, look no further than Series I bonds. With the current surge in inflation, these bonds have become incredibly popular, though they are limited.

I bonds are currently paying 6.89%. They can be purchased electronically in denominations as little as $25. However, you are limited to purchasing no more than $10,000 in I bonds per calendar year. Since they are issued by the U.S. Treasury, they’re fully protected by the U.S. government. You can purchase them through the Treasury Department’s investment portal, TreasuryDirect.gov.

“The cash in my savings account is on fire,” groans Scott Lieberman, Founder of Touchdown Money. “Inflation has my money in flames, each month incinerating more and more. To defend against this, I purchased an I bond. When I decide to get my money back, the I bond will have been protected against inflation by being worth more than what I bought it for. I highly recommend getting yourself a super safe Series I bond with money you can stash away for at least one year.”

You may not be able to put your entire bond portfolio into Series I bonds. But just a small investment, at nearly 10%, can increase the overall return on your bond allocation.

3. Corporate Bonds

The average rate of return on a bank savings account is 0.33%. The average rate on a money market account is 0.09%, and 0.25% on a 12-month CD.

Now, there are some banks paying higher rates, but generally only in the 1%-plus range.

If you want higher returns on your fixed income portfolio, and you’re willing to accept a moderate level of risk, you can invest in corporate bonds. Not only do they pay higher rates than banks, but you can lock in those higher rates for many years.

For example, the average current yield on a AAA-rated corporate bond is 4.55%. Now that’s the rate for AAA bonds, which are the highest-rated securities. You can get even higher rates on bonds with lower ratings, which we will cover in the next section.

Corporate bonds sell in face amounts of $1,000, though the price may be higher or lower depending on where interest rates are. If you choose to buy individual corporate bonds, expect to buy them in lots of ten. That means you’ll likely need to invest $10,000 in a single issue. Brokers will typically charge a small per-bond fee on purchase and sale.

An alternative may be to take advantage of corporate bond funds. That will give you an opportunity to invest in a portfolio of bonds for as little as the price of one share of an ETF. And because they are ETFs, they can usually be bought and sold commission free.

You can typically purchase corporate bonds and bond funds through popular stock brokers, like Zacks Trade, TD Ameritrade.

Corporate Bond Risk

Be aware that the value of corporate bonds, particularly those with maturities greater than 10 years, can fall if interest rates rise. Conversely, the value of the bonds can rise if interest rates fall.

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4. High-Yield Bonds

In the previous section we talked about how interest rates on corporate bonds vary based on each bond issue’s rating. A AAA bond, being the safest, has the lowest yield. But a riskier bond, such as one rated BBB, will provide a higher rate of return.

If you’re looking to earn higher interest than you can with investment-grade corporate bonds, you can get those returns with so-called high-yield bonds. Because they have a lower rating, they pay higher interest, sometimes much higher.

The average yield on high-yield bonds is 8.29%. But that’s just an average. The yield on a bond rated B will be higher than one rated BB.

You should also be aware that, in addition to potential market value declines due to rising interest rates, high-yield bonds are more likely to default than investment-grade bonds. That’s why they pay higher interest rates. (They used to call these bonds “junk bonds,” but that kind of description is a marketing disaster.) Because of those twin risks, junk bonds should occupy only a small corner of your fixed-income portfolio.

High Yield Bond Risk

In a rapidly rising interest rate environment, high-yield bonds are more likely to default.

High-yield bonds can be purchased under similar terms and in the same places where you can trade corporate bonds. There are also ETFs that specialize in high-yield bonds and will be a better choice for most investors, since they will include diversification across many different bond issues.

5. Municipal Bonds

Just as corporations and the U.S. Treasury issue bonds, so do state and local governments. These are referred to as municipal bonds. They work much like other bond types, particularly corporates. They can be purchased in similar denominations through online brokers.

The main advantage enjoyed by municipal bonds is their tax-exempt status for federal income tax purposes. And if you purchase a municipal bond issued by your home state, or a municipality within that state, the interest will also be tax-exempt for state income tax purposes.

That makes municipal bonds an excellent source of tax-exempt income in a nonretirement account. (Because retirement accounts are tax-sheltered, it makes little sense to include municipal bonds in those accounts.)

Municipal bond rates are currently hovering just above 3% for AAA-rated bonds. And while that’s an impressive return by itself, it masks an even higher yield.

Because of their tax-exempt status, the effective yield on municipal bonds will be higher than the note rate. For example, if your combined federal and state marginal income tax rates are 25%, the effective yield on a municipal bond paying 3% will be 4%. That gives an effective rate comparable with AAA-rated corporate bonds.

Municipal bonds, like other bonds, are subject to market value fluctuations due to interest rate changes. And while it’s rare, there have been occasional defaults on these bonds.

Like corporate bonds, municipal bonds carry ratings that affect the interest rates they pay. You can investigate bond ratings through sources like Standard & Poor’s, Moody’s, and Fitch.

Fund Symbol  Type Current Yield 5 Average Annual Return

Vanguard Inflation-Protected Securities Fund  VIPSX TIPS 0.06% 3.02%

SPDR® Portfolio Interm Term Corp Bond ETF SPIB Corporate 4.38% 1.44%

iShares Interest Rate Hedged High Yield Bond ETF  HYGH High-Yield 5.19% 2.02%

Invesco VRDO Tax-Free ETF (PVI) PVI Municipal  0.53% 0.56%

6. Longer Term Certificates of Deposit (CDs)

This is another investment that falls under the low risk/relatively high return classification. As interest rates have risen in recent months, rates have crept up on certificates of deposit. Unlike just one year ago, CDs now merit consideration.

But the key is to invest in certificates with longer terms.

“Another lower-risk option is to consider a Certificate of Deposit (CD),” advises Lance C. Steiner, CFP at Buckingham Advisors. “Banks, credit unions, and many other financial institutions offer CDs with maturities ranging from 6 months to 60 months. Currently, a 6-month CD may pay between 0.75% and 1.25% where a 24-month CD may pay between 2.20% and 3.00%. We suggest considering a short-term ladder since interest rates are expected to continue rising.” (Stated interest rates for the high-yield savings and CDs were obtained at bankrate.com.)

Most banks offer certificates of deposit with terms as long as five years. Those typically have the highest yields.

But the longer term does involve at least a moderate level of risk. If you invest in a CD for five years that’s currently paying 3%, the risk is that interest rates will continue rising. If they do, you’ll miss out on the higher returns available on newer certificates. But the risk is still low overall since the bank guarantees to repay 100% of your principle upon certificate maturity.

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7. Peer-to-Peer (P2P) Lending

Do you know how banks borrow from you—at 1% interest—then loan the same money to your neighbor at rates sometimes as high as 20%? It’s quite a racket, and a profitable one at that.

But do you also know that you have the same opportunity as a bank? It’s an investing process known as peer-to-peer lending, or P2P for short.

P2P lending essentially eliminates the bank. As an investor, you’ll provide the funds for borrowers on a P2P platform. Most of these loans will be in the form of personal loans for a variety of purposes. But some can also be business loans, medical loans, and for other more specific purposes.

As an investor/lender, you get to keep more of the interest rate return on those loans. You can invest easily through online P2P platforms.

One popular example is Prosper. They offer primarily personal loans in amounts ranging between $2,000 and $40,000. You can invest in small slivers of these loans, referred to as “notes.” Notes can be purchased for as little as $25.

That small denomination will make it possible to diversify your investment across many different loans. You can even choose the loans you will invest in based on borrower credit scores, income, loan terms, and purposes.

Prosper, which has managed $20 billion in P2P loans since 2005, claims a historical average return of 5.7%. That’s a high rate of return on what is essentially a fixed-income investment. But that’s because there exists the possibility of loss due to borrower default.

However, you can minimize the likelihood of default by carefully choosing borrower loan quality. That means focusing on borrowers with higher credit scores, incomes, and more conservative loan purposes (like debt consolidation).

8. Real Estate Investment Trusts (REITs)

REITs are an excellent way to participate in real estate investment, and the return it provides, without large amounts of capital or the need to manage properties. They’re publicly traded, closed-end investment funds that can be bought and sold on major stock exchanges. They invest primarily in commercial real estate, like office buildings, retail space, and large apartment complexes.

If you’re planning to invest in a REIT, you should be aware that there are three different types.

“Equity REITs purchase commercial, industrial, or residential real estate properties,” reports Robert R. Johnson, PhD, CFA, CAIA, Professor of Finance, Heider College of Business, Creighton University and co-author of several books, including The Tools and Techniques Of Investment Planning, Strategic Value Investing and Investment Banking for Dummies.  “Income is derived primarily from the rental on the properties, as well as from the sale of properties that have increased in value. Mortgage REITs invest in property mortgages. The income is primarily from the interest they earn on the mortgage loans. Hybrid REITs invest both directly in property and in mortgages on properties.”

Johnson also cautions:

“Investors should understand that equity REITs are more like stocks and mortgage REITs are more like bonds. Hybrid REITs are like a mix of stocks and bonds.”

Mortgage REITs, in particular, are an excellent way to earn steady dividend income without being closely tied to the stock market.

Examples of specific REITs are listed in the table below (source: Kiplinger):

REIT Equity or Mortgage Property Type Dividend Yield 12 Month Return

Rexford Industrial Realty REXR Industrial warehouse space 2.02% 2.21%

Sun Communities SUI Manufactured housing, RVs, resorts, marinas 2.19% -14.71%

American Tower AMT Multi-tenant cell towers 2.13% -9.00%

Prologis PLD Industrial real estate 2.49% -0.77%

Camden Property Trust CPT Apartment complexes 2.77% -7.74%

Alexandria Real Estate Equities ARE Research Properties 3.14% -23.72%

Digital Realty Trust DLR Data centers 3.83% -17.72%

9. Real Estate Crowdfunding

If you prefer direct investment in a property of your choice, rather than a portfolio, you can invest in real estate crowdfunding. You invest your money, but management of the property will be handled by professionals. With real estate crowdfunding, you can pick out individual properties, or invest in nonpublic REITs that invest in very specific portfolios.

One of the best examples of real estate crowdfunding is Fundrise. That’s because you can invest with as little as $500 or create a customized portfolio with no more than $1,000. Not only does Fundrise charge low fees, but they also have multiple investment options. You can start small in managed investments, and eventually trade up to investing in individual deals.

One thing to be aware of with real estate crowdfunding is that many require accredited investor status. That means being high income, high net worth, or both. If you are an accredited investor, you’ll have many more choices in the real estate crowdfunding space.

If you are not an accredited investor, that doesn’t mean you’ll be prevented from investing in this asset class. Part of the reason why Fundrise is so popular is that they don’t require accredited investor status. There are other real estate crowdfunding platforms that do the same.

Just be careful if you want to invest in real estate through real estate crowdfunding platforms. You will be expected to tie your money up for several years, and early redemption is often not possible. And like most investments, there is the possibility of losing some or all your investment principal.

  • Low minimum investment – $10
  • Diversified real estate portfolio
  • Portfolio Transparency

10. Physical Real Estate

We’ve talked about investing in real estate through REITs and real estate crowdfunding. But you can also invest directly in physical property, including residential property or even commercial.

Owning real estate outright means you have complete control over the investment. And since real estate is a large-dollar investment, the potential returns are also large.

For starters, average annual returns on real estate are impressive. They’re even comparable to stocks. Residential real estate has generated average returns of 10.6%, while commercial property has returned an average of 9.5%.

Next, real estate has the potential to generate income from two directions, from rental income and capital gains. But because of high property values in many markets around the country, it will be difficult to purchase real estate that will produce a positive cash flow, at least in the first few years.

Generally speaking, capital gains are where the richest returns come from. Property purchased today could double or even triple in 20 years, creating a huge windfall. And this will be a long-term capital gain, to get the benefit of a lower tax bite.

Finally, there’s the leverage factor. You can typically purchase an investment property with a 20% down payment. That means you can purchase a $500,000 property with $100,000 out-of-pocket.

By calculating your capital gains on your upfront investment, the returns are truly staggering. If the $500,000 property doubles to $1 million in 20 years, the $500,000 profit generated will produce a 500% gain on your $100,000 investment.

On the negative side, real estate is certainly a very long-term investment. It also comes with high transaction fees, often as high as 10% of the sale price. And not only will it require a large down payment up front, but also substantial investment of time managing the property.

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11. High Dividend Stocks

“The best high-yield investment is dividend stocks,” declares Harry Turner, Founder at The Sovereign Investor. “While there is no guaranteed return with stocks, over the long term stocks have outperformed other investments such as bonds and real estate. Among stocks, dividend-paying stocks have outperformed non-dividend paying stocks by more than 2 percentage points per year on average over the last century. In addition, dividend stocks tend to be less volatile than non-dividend paying stocks, meaning they are less likely to lose value in downturns.”

You can certainly invest in individual stocks that pay high dividends. But a less risky way to do it, and one that will avoid individual stock selection, is to invest through a fund.

One of the most popular is the ProShares S&P 500 Dividend Aristocrat ETF (NOBL). It has provided a return of 1.67% in the 12 months ending May 31, and an average of 12.33% per year since the fund began in October 2013. The fund currently has a 1.92% dividend yield.

The so-called Dividend Aristocrats are popular because they represent 60+ S&P 500 companies, with a history of increasing their dividends for at least the past 25 years.

“Dividend Stocks are an excellent way to earn some quality yield on your investments while simultaneously keeping inflation at bay,” advises Lyle Solomon, Principal Attorney at Oak View Law Group, one of the largest law firms in America. “Dividends are usually paid out by well-established and successful companies that no longer need to reinvest all of the profits back into the business.”

It gets better. “These companies and their stocks are safer to invest in owing to their stature, large customer base, and hold over the markets,” adds Solomon. “The best part about dividend stocks is that many of these companies increase dividends year on year.”

The table below shows some popular dividend-paying stocks. Each is a so-called “Dividend Aristocrat”, which means it’s part of the S&P 500 and has increased its dividend in each of at least the past 25 years.

Company Symbol Dividend Dividend Yield

AbbVie ABBV $5.64 3.80%

Armcor PLC AMCR $0.48 3.81%

Chevron CVX $5.68 3.94%

ExxonMobil XOM $3.52 4.04%

IBM IBM $6.60 5.15%

Realty Income Corp O $2.97 4.16%

Walgreen Boots Alliance WBA $1.92 4.97%

12. Preferred Stocks

Preferred stocks are a very specific type of dividend stock. Just like common stock, preferred stock represents an interest in a publicly traded company. They’re often thought of as something of a hybrid between stocks and bonds because they contain elements of both.

Though common stocks can pay dividends, they don’t always. Preferred stocks on the other hand, always pay dividends. Those dividends can be either a fixed amount or based on a variable dividend formula. For example, a company can base the dividend payout on a recognized index, like the LIBOR (London Inter-Bank Offered Rate). The percentage of dividend payout will then change as the index rate does.

Preferred stocks have two major advantages over common stock. First, as “preferred” securities, they have a priority on dividend payments. A company is required to pay their preferred shareholders dividends ahead of common stockholders. Second, preferred stocks have higher dividend yields than common stocks in the same company.

You can purchase preferred stock through online brokers, some of which are listed under “Growth Stocks” below.

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Preferred Stock Caveats

The disadvantage of preferred stocks is that they don’t entitle the holder to vote in corporate elections. But some preferred stocks offer a conversion option. You can exchange your preferred shares for a specific number of common stock shares in the company. Since the conversion will likely be exercised when the price of the common shares takes a big jump, there’s the potential for large capital gains—in addition to the higher dividend.

Be aware that preferred stocks can also be callable. That means the company can authorize the repurchase of the stock at its discretion. Most will likely do that at a time when interest rates are falling, and they no longer want to pay a higher dividend on the preferred stock.

Preferred stock may also have a maturity date, which is typically 30–40 years after its original issuance. The company will typically redeem the shares at the original issue price, eliminating the possibility of capital gains.

Not all companies issue preferred stock. If you choose this investment, be sure it’s with a company that’s well-established and has strong financials. You should also pay close attention to the details of the issuance, including and especially any callability provisions, dividend formulas, and maturity dates.

13. Growth Stocks

This sector is likely the highest risk investment on this list. But it also may be the one with the highest yield, at least over the long term. That’s why we’re including it on this list.

Based on the S&P 500 index, stocks have returned an average of 10% per year for the past 50 years. But it is important to realize that’s only an average. The market may rise 40% one year, then fall 20% the next. To be successful with this investment, you must be committed for the long haul, up to and including several decades.

And because of the potential wide swings, growth stocks are not recommended for funds that will be needed within the next few years. In general, growth stocks work best for retirement plans. That’s where they’ll have the necessary decades to build and compound.

Since most of the return on growth stocks is from capital gains, you’ll get the benefit of lower long-term capital gains tax rates, at least with securities held in a taxable account. (The better news is capital gains on investments held in retirement accounts are tax-deferred until retirement.)

You can choose to invest in individual stocks, but that’s a fairly high-maintenance undertaking. A better way may be to simply invest in ETFs tied to popular indexes. For example, ETFs based on the S&P 500 are very popular among investors.

You can purchase growth stocks and growth stock ETFs commission free with brokers like M1 Finance,  Zacks Trade, Wealthsimple.

14. Annuities

Annuities are something like creating your own private pension. It’s an investment contract you take with an insurance company, in which you invest a certain amount of money in exchange for a specific income stream. They can be an excellent source of high yields because the return is locked in by the contract.

Annuities come in many different varieties. Two major classifications are immediate and deferred annuities. As the name implies, immediate annuities begin paying an income stream shortly after the contract begins.

Deferred annuities work something like retirement plans. You may deposit a fixed amount of money with the insurance company upfront or make regular installments. In either case, income payments will begin at a specified point in the future.

With deferred annuities, the income earned within the plan is tax-deferred and paid upon withdrawal. But unlike retirement accounts, annuity contributions are not tax-deductible. Investment returns can either be fixed-rate or variable-rate, depending on the specific annuity setup.

While annuities are an excellent idea and concept, the wide variety of plans as well as the many insurance companies and agents offering them, make them a potential minefield. For example, many annuities are riddled with high fees and are subject to limited withdrawal options.

Because they contain so many moving parts, any annuity contracts you plan to enter into should be carefully reviewed. Pay close attention to all the details, including the small ones. It is, after all, a contract, and therefore legally binding. For that reason, you may want to have a potential annuity reviewed by an attorney before finalizing the deal.

15. Alternative Investments

Alternative investments cover a lot of territory. Examples include precious metals, commodities, private equity, art and collectibles, and digital assets. These fall more in the category of high risk/potential high reward, and you should proceed very carefully and with only the smallest slice of your portfolio.

To simplify the process of selecting alternative assets, you can invest through platforms such as Yieldstreet. With a single cash investment, you can invest in multiple alternatives.

“Investors can purchase real estate directly on Yieldstreet, through fractionalized investments in single deals,” offers Milind Mehere, Founder & Chief Executive Officer at Yieldstreet. “Investors can access private equity and private credit at high minimums by investing in a private market fund (think Blackstone or KKR, for instance). On Yieldstreet, they can have access to third-party funds at a fraction of the previously required minimums. Yieldstreet also offers venture capital (fractionalized) exposure directly. Buying a piece of blue-chip art can be expensive, and prohibitive for most investors, which is why Yieldstreet offers fractionalized assets to diversified art portfolios.”

Yieldstreet also provides access to digital asset investments, with the benefit of allocating to established professional funds, such as Pantera or Osprey Fund. The platform does not currently offer commodities but plans to do so in the future.

  • Access to wide array of alternative asset classes
  • Access to ultra-wealthy investments
  • Can invest for income or growth
Learn More Now

Alternative investments largely require thinking out-of-the-box. Some of the best investment opportunities are also the most unusual.

“The price of meat continues to rise, while agriculture remains a recession-proof investment as consumer demand for food is largely inelastic,” reports Chris Rawley, CEO of Harvest Returns, a platform for investing in private agriculture companies. “Consequently, investors are seeing solid returns from high-yield, grass-fed cattle notes.”

16. Interest Bearing Crypto Accounts

Though the primary appeal of investing in cryptocurrency has been the meteoric rises in price, now that the trend seems to be in reverse, the better play may be in interest-bearing crypto accounts. A select group of crypto exchanges pays high interest on your crypto balance.

One example is Gemini. Not only do they provide an opportunity to buy, sell, and store more than 100 cryptocurrencies—plus non-fungible tokens (NFTs)—but they are currently paying 8.05% APY on your crypto balance through Gemini Earn.

In another variation of being able to earn money on crypto, Crypto.com pays rewards of up to 14.5% on crypto held on the platform. That’s the maximum rate, as rewards vary by crypto. For example, rewards on Bitcoin and Ethereum are paid at 6%, while stablecoins can earn 8.5%.

It’s important to be aware that when investing in cryptocurrency, you will not enjoy the benefit of FDIC insurance. That means you can lose money on your investment. But that’s why crypto exchanges pay such high rates of return, whether it’s in the form of interest or rewards.

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17. Crypto Staking

Another way to play cryptocurrency is a process known as crypto staking. This is where the crypto exchange pays you a certain percentage as compensation or rewards for monitoring a specific cryptocurrency. This is not like crypto mining, which brings crypto into existence. Instead, you’ll participate in writing that particular blockchain and monitoring its security.

“Crypto staking is a concept wherein you can buy and lock a cryptocurrency in a protocol, and you will earn rewards for the amount and time you have locked the cryptocurrency,” reports Oak View Law Group’s Lyle Solomon.

“The big downside to staking crypto is the value of cryptocurrencies, in general, is extremely volatile, and the value of your staked crypto may reduce drastically,” Solomon continues, “However, you can stake stable currencies like USDC, which have their value pegged to the U.S. dollar, and would imply you earn staked rewards without a massive decrease in the value of your investment.”

Much like earning interest and rewards on crypto, staking takes place on crypto exchanges. Two exchanges that feature staking include Coinbase and Kraken. These are two of the largest crypto exchanges in the industry, and they provide a wide range of crypto opportunities, in addition to staking.

Invest in Startup Businesses and Companies 

Have you ever heard the term “angel investor”? That’s a private investor, usually, a high net worth individual, who provides capital to small businesses, often startups. That capital is in the form of equity. The angel investor invests money in a small business, becomes a part owner of the company, and is entitled to a share of the company’s earnings.

In most cases, the angel investor acts as a silent partner. That means he or she receives dividend distributions on the equity invested but doesn’t actually get involved in the management of the company.

It’s a potentially lucrative investment opportunity because small businesses have a way of becoming big businesses. As they grow, both your equity and your income from the business also grow. And if the business ever goes public, you could be looking at a life-changing windfall!

Easy Ways to Invest in Startup Businesses

Mainvest is a simple, easy way to invest in small businesses. It’s an online investment platform where you can get access to returns as high as 25%, with an investment of just $100. Mainvest offers vetted businesses (the acceptance rate is just 5% of business that apply) for you to invest in.

It collects revenue, which will be paid to you quarterly. And because the minimum required investment is so small, you can invest in several small businesses at the same time. One of the big advantages with Mainvest is that you are not required to be an accredited investor.

Still another opportunity is through Fundrise Innovation Fund. I’ve already covered how Fundrise is an excellent real estate crowdfunding platform. But through their recently launched Innovaton Fund, you’ll have opportunity to invest in high-growth private technology companies. As a fund, you’ll invest in a portfolio of late-stage tech companies, as well as some public equities.

The purpose of the fund is to provide high growth, and the fund is currently offering shares with a net asset value of $10. These are long-term investments, so you should expect to remain invested for at least five years. But you may receive dividends in the meantime.

Like Mainvest, the Fundrise Innovation Fund does not require you to be an accredited investor.

  • Low minimum investment – $10
  • Diversified real estate portfolio
  • Portfolio Transparency

Final Thoughts on High Yield Investing

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Notice that I’ve included a mix of investments based on a combination of risk and return. The greater the risk associated with the investment, the higher the stated or expected return will be.

It’s important when choosing any of these investments that you thoroughly assess the risk involved with each, and not focus primarily on return. These are not 100% safe investments, like short-term CDs, short-term Treasury securities, savings accounts, or bank money market accounts.

Because there is risk associated with each, most are not suitable as short-term investments. They make most sense for long-term investment accounts, particularly retirement accounts.

For example, growth stocks—and most stocks, for that matter—should generally be in a retirement account. While there will be years when you will suffer losses in your position, you’ll have enough years to offset those losses between now and retirement.

Also, if you don’t understand any of the above investments, it will be best to avoid making them. And for more complicated investments, like annuities, you should consult with a professional to evaluate the suitability and all the provisions it contains.

FAQ’s on High Yield Investment Options

What investment has the highest yield?

The investment with the highest yield will vary depending on a number of factors, including current market conditions and the amount of risk an investor is willing to take on. Generally speaking, investments with the potential for high yields also come with a higher level of risk, so it’s important for investors to carefully consider their options and choose investments that align with their financial goals and risk tolerance.

Some examples of high-yield investments include:

1. Stocks: Some stocks may offer high dividend yields, which is the annual dividend payment a company makes to its shareholders, expressed as a percentage of the stock’s current market price.

2. Real estate: Investing in real estate, either directly by purchasing property or indirectly through a real estate investment trust (REIT), can potentially generate high returns in the form of rental income and appreciation of the property value.

3. High-yield bonds: High-yield bonds, also known as junk bonds, are bonds that are issued by companies with lower credit ratings and thus offer higher yields to compensate for the added risk.

4. Private lending: Investing in private loans, such as through peer-to-peer lending platforms, can potentially offer high yields, but it also carries a higher level of risk.

5. Commodities: Investing in commodities, such as precious metals or oil, can potentially generate high returns if the prices of those commodities rise. However, the prices of commodities can also be volatile and subject to market fluctuations.

It’s important to note that these are just examples and not recommendations. As with any investment, it’s crucial to carefully research and consider all the potential risks and rewards before making a decision.

Where can I invest my money to get high returns?

There are a number of places you can invest your money to get high returns. One option is to invest in stocks, which typically offer higher returns than other investment options. Another option is to invest in bonds, which are considered a relatively safe investment option.

You could also invest in real estate, which has the potential to provide high returns if done correctly. Finally, you could also invest in commodities, such as gold or silver, which can be a risky investment but can also offer high returns.

What investments can I make a 10% return?

It’s difficult to predict exactly what investments will generate a 10% return, as investment returns can vary depending on a number of factors, including market conditions and the performance of the specific investment. Some investments, such as stocks and real estate, have the potential to generate returns in excess of 10%, but they also come with a higher level of risk. It’s important to remember that past performance is not necessarily indicative of future results, and that all investments carry some degree of risk

Source: goodfinancialcents.com