HONG KONG, Sept 11 (Reuters) – HSBC Holdings will raise its mortgage rates in Hong Kong by a maximum of 50 basis points, a spokesperson for the bank said on Monday, as it tries to maintain its profit margin amid higher interest rates.
New mortgage loans linked to the Hong Kong Interbank Offered Rate (HIBOR) from HSBC will be increased to as much as 4.125% from 3.625%, effective Sept. 18, according to the spokesperson.
“We have decided to revise our mortgage rate following a recent review, which takes into account a range of factors, including HIBOR, our competitiveness and market pricing,” the spokesperson said in a statement.
The move by the territory’s largest lender weighed on Hong Kong property developers’ stocks on Monday, with the market’s real estate gauge (.HSNP) shedding 3.28%, compared with a 0.58% dip in the benchmark Hang Seng Index (.HIS).
Sun Hung Kai Properties (0016.HK) slumped 9.5% after the Hong Kong property giant reported a 17% decline in underlying profit for the year ended June.
Hong Kong banks, including HSBC, last raised mortgage rates by 25 basis points in December, after Hong Kong’s central bank hiked rates following the U.S. Federal Reserve.
Interest rates in Hong Kong have been on the rise as its monetary policy moves in lock-step with the U.S., as its currency is pegged to the U.S. dollar.
Hong Kong interbank rates also spiked this year. One-month HIBOR , which is the benchmark banks take as a reference for residential mortgages in the city, hit 5.42988% on Aug. 2, the highest since mid-October, 2007.
Private home prices in the city had been declining for three consecutive months by July, official data showed, as high rates and a weak economic outlook weigh on sentiment.
Reporting by Xie Yu,Donny Kwok and Selena Li; Editing by Himani Sarkar and Sharon Singleton
Our Standards: The Thomson Reuters Trust Principles.
Everyone has heard of Nashville. It’s not called Music City, U.S.A. for nothing! Most people think the city is all about country music, cowboy boots and line dancing, but locals know the Nashville facts that are the truth behind the stereotypes.
It has great weather and amazing views. Some of the most unique architecture in the country is here. Two U.S. Presidents are buried in or near Nashville. As for music, sure we’re the home of country music, but Elvis also recorded more than 200 songs at RCA Studios. Here are a bunch of other Nashville facts known only to locals.
39 facts only real Nashville locals know
1. BBQ is a separate food group. Don’t argue about it. Just try all the different kinds and decide on a favorite. Not all of them involve pork and tomatoes. Barbecue chicken with Liquid Gold barbecue sauce is a national treasure.
2. Named “The Athens of the South,” Nashville is the only city in the world that has a replica of the Parthenon from Athens, Greece. You can find it in Centennial Park.
3. The city hosts Tin Pan South, the largest festival for songwriters in the world. Songwriters of all genres, not just country, descend on the city every spring for the weeklong festival. Many perform their work on street corners, as well as at local music venues.
4. The creators of Maxwell House Coffee did it in Nashville. President Theodore Roosevelt reportedly gave the brand its famous tagline “Good to the last drop” when he tried it on a visit to the city.
5. The Grand Ole Opry has been airing weekly for 94 years. It’s the longest-running show in the entire world. It’s still carried on the radio, as well as on TV and the auditorium is always packed with a live audience. Good luck getting tickets if you don’t make plans in advance!
6. Revolutionary War general, Francis Nash, is the inspiration for the name Nashville. The city was founded in the middle of the war in 1779.
7. The famous music scene began with African-American gospel groups, not country music. It all started with the Jubilee Singers of Fisk University way back in the 1870s. Emancipated slaves studying at the university were the first members of the group. They traveled the country to raise money to fund the school. The group is still around and continues to travel and perform.
8. Gaylord Opryland Resort and Convention Center is an overrated tourist attraction that’s not worth the admission price except in December. That’s when Opryland turns into a true wonderland that delights Christmas lovers of all ages. It’s the best Christmas display in the city.
9. The first seeing-eye guide dog in the United States was trained in Nashville by a native named Morris Frank. He left his studies at Vanderbilt University to travel to Europe to find out more about the seeing-eye dogs he’d heard about. He returned with his first guide dog, Buddy, and began training more. The foundation he created, The Seeing Eye, is still in Nashville.
10. Hunting for the best apartments in Nashville is easier and more fun compared to other cities. There are many types of apartments to choose from here. Nashville is more affordable than most other big cities, too!
11. Nashville is where the phrase “Old Glory” became popularized to describe the American flag. It started in the Civil War when a retired sailor named William Driver retrieved his hidden flag and flew it over the city after the Union Army recaptured it from the Confederates. He referred to his flag as “Old Glory” and the nickname caught on.
12. Famous thoroughbreds War Admiral and Seabiscuit were both born in Nashville. Move over, Louisville. They’ve got the Triple Crown winners right here in Nashvegas. Belle Meade Plantation, which bred both horses, is open to the public for tours. They also offer tastings at the on-site winery.
13. Every neighborhood in Nashville is distinctive and has its own personality. You’re sure to find one that suits you perfectly.
14. The architecture at the Country Music Hall of Fame is better, but the real country music history is at the Johnny Cash Museum. They’re proud of their favorite native son. (Yes, he was born in Arkansas, but they overlook that small flaw.)
15. Pancake Pantry’s pancakes aren’t worth the wait. Neither are the biscuits from Biscuit Love. They’re both overpriced restaurants that cater primarily to tourists. Many other restaurants have pancakes and biscuits that are homemade, just as good and don’t require an hour-long wait.
16. Prince’s Hot Chicken Shack IS worth standing in line for. Be prepared to drink a bucket of water to douse the heat. That chicken is hot, hot, hot.
17. Nashville was the first city in the South to desegregate public businesses. The protests and sit-ins that led to the victory sparked civil rights advocates in other cities to do the same.
18. RCA Studio B stays decorated for Christmas since Elvis recorded his first Christmas album there in the middle of July. The Music Row Studio is open to the public year-round.
19. Goo Goo Clusters were created in Nashville and are still made right here. The company makes over 3 million pounds of chewy confection every year.
20. The city has thriving hip-hop and rap scenes. Some of the best rappers have come from Cashville, including Young Buck, Lil Queze and Starlito.
21. Speaking of music, Nashville has a ton of live music venues and might be the only place in the world where you can listen to bluegrass, walk next door to catch a country concert, then go downstairs to listen to a rap battle and finally finish off the day by driving down the road to listen to the Nashville Symphony perform.
22. Nashville has more people working in the music industry than anywhere else in the country, including Los Angeles and New York. Over 60,000 music industry jobs are in Nashville. That’s four times as many as the next nearest city.
23. No one really knows what goes on in the Batman Building downtown. Supposedly, it’s owned by AT&T and is an office building for them, but locals aren’t so sure. Could Bruce Wayne have an office on the top floor?
24. Nashville has the only music studio left in the entire world that can record music directly on vinyl records. The Blue Room is part of Jack White’s Third Man Records and has live performances, too.
25. The only American to ever become President of a foreign country was born in Nashville. William Walker became Chief Executive of Nicaragua in 1856.
26. Ryman Auditorium started off as a meeting place for local gospel churches. It was only later converted into a concert venue. It’s been a designated Historic Landmark since 2001.
27. The Frist Art Museum is an underrated landmark. It’s one of the only museums on the National Register of Historic Places. The building itself is a work of art in the Art Deco style. It was the main post office!
28. Nashville is home to the oldest FM radio station in the country. It’s another reason for the nickname “Music City.” In fact, local legend has it that it was one of the DJs for this music station back in the day that first called Nashville by the famous moniker.
29. The Gulch is still an old hippie neighborhood, despite the new businesses moving in. It’s still the best place to find eccentric shops and bars. There’s no better location in town to hear eclectic music, either.
30. We’re the only city other than Los Angeles to ever host the Grammy Awards. They’d love to do it again if anyone from the Recording Academy is reading this.
31. Sri Ganesha Temple and Sanctuary will transport you to another time and place. It’s a replica of Hindu Temples built in India between 900 and 1100 AD. The temple welcomes visitors and holds tours daily, but it is a working temple, so it closes periodically during the day for services. There’s a restaurant and a gift shop on-site, too.
32. Nashville has the largest Kurdish community in the U.S. More than 15,000 Kurds call Nashville home, though the U.S. Census has yet to recognize the refugees from Iraq. The community calls its neighborhood Little Kurdistan.
33. Percy Priest Lake is the best place to go boating and hiking despite the entry fee, which is only $5, anyway. There are miles of trails and campgrounds, as well as plenty of boat ramps.
34. Nashville is home to over 678,000 people. It’s the biggest city in the state of Tennessee and is rapidly growing. Its population has grown by almost 13 percent since 2010 and it’s the 23rd largest city in the United States. More and more people are discovering the charms of Music City and deciding to call it home!
35. The monument to Lysicrates in Athens was the inspiration for the Tennessee State Capitol building, which is one of the oldest capitol buildings in the country still operating. President James Polk and his wife are buried on the grounds.
36. Even people who don’t like country music will admit that the architecture at the Country Music Hall of Fame is amazing. From the front windows designed to look like piano keys, to the physical representation of recording technology evolution that makes up the rotunda’s roof, it’s worth visiting just to see the building.
37. The Honky Tonk Highway is the nickname for an area of South Broadway that has bars and other venues playing live music — and letting it flow outside onto the streets —from 10 a.m. every morning until 3 a.m. the following morning. Many of the venues have multiple floors and they rarely publish their playing schedules in advance. Sometimes, music stars just show up and start playing.
38. President Andrew Jackson lived just outside Nashville on an estate named The Hermitage. He’s buried on the grounds. The estate is now a museum dedicated to the history and the President’s life.
39. Wave Country is the place to go during the summer. The freshwater swimming pool and water park complex can easily be an all-day affair to help the family keep cool during the hot Southern summers. There are concession stands but you can also bring your own picnic. You can even bring a tent if you like.
Did we miss any Nashville facts?
Residents are proud of their city and heritage. If you’re moving to Music City, you can find apartments in Nashville here.
Did we forget any Nashville facts that we should have included? Did we get anything wrong? Let us know in the comments below!
Mortgage rates this week saw the biggest one-week decline in a year and potential homebuyers waiting for rates to drop responded, said Josh Mettle, division president and co-creator of NEO Home Loans.
“I think we were up right around 15% increase in the number of initial mortgage applications. That doesn’t take into consideration the number of buyers that had already applied and were sitting on the sidelines. They’ve also re-entered the home-buying process,” Mettle told HousingWire.
Many homebuyers are aware of the lack of inventory of existing homes for sale, he explained. Because of that, they want to avoid any potential bidding wars by getting back into the market earlier rather than waiting for mortgage rates to drop further.
Following the Federal Reserve’s decision to hold interest rates steady, the 10-year Treasury yield – the primary driver in the rise of longer-term interest rates – have been on the downswing. The 30-year, conventional fixed mortgage rate hit 7.48% on Friday, down from 7.55% a month ago, HousingWire’s Mortgage Rates Center showed.
The biggest question in the minds of loan originators is whether mortgage rates will fall through the end of 2023, providing some reprieve from the high-rate environment that has stifled origination volume for much of the year.
What’s going on with mortgage rates?
Economists pointed out that the market interpreted Federal ReserveChair Jerome Powell’s comments at the latest Federal Open Market Committee (FOMC) press conference as dovish compared to his previous remarks.
“The way I interpret what has happened, post-press conference for Powell, is that the market is going back to their behavior from earlier this year, where they kept signaling to the Fed that we want rate cuts,” Fannie Mae Chief Economist Doug Duncan told HousingWire. “So the fact that the Fed didn’t raise rates, the market rushed to say, ‘well, rates are going to get cut.’ The decline in the 10-year Treasury yield is simply that response,”
Duncan added that Powell’s comments were balanced, indicating that there has been progress in bringing inflation down but upside risk to inflation remained. Most importantly, Powell emphasized that the committee is not thinking about rate cuts.
“It will not surprise me at all if there’s some intervening speeches that push rates back up on the 10-year Treasury yield,” Duncan said.
Speaking on Nov. 9 – a little more than a week after the Fed held benchmark rates steady – Powell said that the central bank is not confident it has done enough to bring inflation down.
“My colleagues and I are gratified by this progress but expect that the process of getting inflation sustainably down to 2% has a long way to go,” Powell said on Thursday, addressing the International Monetary Fund audience in Washington, D.C.
The 10-year Treasury yield rose after the speech, largely driven by a bad bond auction, but the bond market fell from the peak of Thursday, noted Logan Mohtashami, HousingWire’s lead analyst.
“The bad bond auction on Thursday took yields and rates higher, and Powell’s hawkish tone kept rates up there, but yields on Friday morning fell just a little,” Mohtashami said. “It’ll be interesting to see what the (market) reaction will be to the next (CPI) report.”
Where are mortgage rates headed?
The direction of the 10-year Treasury yield and mortgage rates will depend on the incoming data – including the Consumer Price Index (CPI) and retail sales numbers, economists emphasized.
Danielle Hale, chief economist at Realtor.com, noted that the economy is in the monetary cycle where mortgage rate changes are based on “expectations which can shift in outsized fashion relative to changes in the actual data.”
The CPI report for October 2023 – set to release on Nov. 14 – could push mortgage rates up if CPI numbers come in higher than expected, Hale projected.
Headline inflation is broadly expected to be subdued month over month, partly due to oil prices easing from their late-September highs.
The streak of declining mortgage rates may continue into December if the next few inflation readings come in as expected, Hale projected.
Although Q3 economic growth came in “quite strong” at an annualized 9.4% rate and several job market indicators continue to show strength, as long inflation cools, the central bank is likely to pause at this level for some time, said Michael Fratantoni, MBA’s chief economist.
Fannie Mae and the MBA both expect the Fed to hold rates steady in its last 2023 FOMC meeting scheduled Dec. 12-13.
Is this enough to prop up mortgage origination?
With mortgage rates falling, homebuyers are starting to realize that this may be a great time for them to get into the market while there’s lower demand, said John Crivea II, certified mortgage advisor and loan originator at Mpire Financial Group.
Crivea II saw more than a triple increase in the number of leads in the past week and sees more activity on the horizon.
“If the rates drop more and more people get more excited and come back into the market, now you’re going to be back to where we were two years ago with multiple offers in the five to 10 range,” Crivea II said.
The welcome relief in mortgage rates, however, won’t help lenders a whole lot, economists expected.
“The change of 25 basis points (bps) or a quarter of a percent, puts a very few households in the game versus out of the game. So it’s not a game-changer. If rates fell below 6%, then you’d see a pick-up in production volume,” Duncan said.
Refinance applications tend to pick up when mortgage rates drop, Hale noted. But for the industry to see a mini refi boom, mortgage rates would need to fall below 7%.
“Mortgage rates have only exceeded 7% since August, and, given the sluggishness in home sales in recent months, there aren’t many homeowners who would need to refinance by a smaller dip,” Hale said.
The spread between mortgage rates and Treasury yields remains roughly 120 basis points wider than typical, due to a combination of factors, Fratantoni noted.
MBA’s baseline forecast is for mortgage rates to end 2023 at 7.2%, reach 6.1% at the end of 2024 and drop to 5.5% by 2025. Fannie Mae expects the average 30-year, fixed-rate mortgage to land at 6.8% in 2023 and move up to 6.9% in 2024.
Loan originators emphasized any decline in rates improves affordability while the lack of housing inventory and higher home prices will continue to be a challenge.
LOs are hopeful that the end of 2023 will be different from the same period last year when their origination business was paralyzed, largely due to mortgage rates sharply surpassing the 7% mark.
“We saw extreme pain last year at this time because a 7% mortgage was just absolutely shocking at that point after 3% rates. Nobody had gotten acclimated to that higher interest rate environment because it happened so fast,” Neo’s Mettle said.
“The fourth quarter and the first quarter are always the most challenging for the mortgage industry. People believe that rates peaked just above 8%. I think it’s going to be a much more favorable year for those reasons.”
U.S. Housing and Urban Development Secretary Alphonso Jackson announced this morning that he would be stepping down on April 18th, according to a statement posted on the HUD website.
“During my time here, I have sought to make America a better place to live, work and raise a family,” said Jackson, who served as Deputy Secretary and then Secretary.
“I take great pride in working alongside some of the most dedicated civil servants in America. The hardworking people at HUD make a difference in the lives of thousands of Americans daily.”
“There comes a time when one must attend more diligently to personal and family matters. Now is such a time for me,” Jackson added.
Jackson joined the Bush Administration in June of 2001 as HUD’s Deputy Secretary and Chief Operating Officer and was unanimously confirmed as the nation’s 13th Secretary of HUD by the Senate on March 31, 2004.
About two weeks ago, Senate Banking, Housing and Urban Affairs Chairman Chris Dodd and Patty Murray, who chairs the appropriations subcommittee that oversees HUD, sent a letter to President Bush calling for Jackson’s resignation.
The two cited favoritism and cronyism by Jackson, noting that he avoided direct questions about the issues at hand and was not fit to serve as HUD chief.
Most notably, Jackson was accused of bullying the Philadelphia Housing Authority after it refused to transfer a valuable property to one of his business associates.
“I recently voiced my concerns about Secretary Jackson’s ability to provide the leadership necessary during these trying times for our country while under the cloud of various investigations into alleged impropriety,” said Dodd in a statement on his website.
“I hope this change in personnel will be matched by a change in policy that brings real solutions to the housing crisis that has triggered this economic recession. I stand ready to work with the President and his new HUD Secretary to that end.”
Thanks to a record number of price cuts and a big improvement in mortgage rates, home buying conditions have improved tremendously.
Taken together, you might be able to snag a lower purchase price and finance the property with a mortgage rate about .50% lower than what was on offer last month.
Does this mean it’s time to rush out to buy a home? Or does it continue to pay to be patient?
Personally, I’m still in the no-rush camp, but if you do see something you love, the price tag could be a little lower.
And there may be less competition as it tends to drop off later in the year as buyers get consumed with other things.
Unseasonal Increase in For-Sale Listings as Asking Prices Drop
Redfin reported this morning that some “glimmers of hope” are emerging for prospective home buyers.
The first one being that new listings increased 1.5% from a year ago during the four weeks ending November 5th.
This was just the second such increase since July 2022, a testament to the continued short supply plaguing the housing market.
They noted that this increase is partly because new listings were falling during this period last year.
At the same time, active listings are at their highest level since the beginning of 2023, and months of supply ticked up 0.2 points to 3.6 months.
Inventory remains constrained nationally, with 4 to 5 months typically signifying healthy supply. But it is rising, which appears to be leading to price reductions.
And the share of listed homes with a price drop increased to 6.8%, a new record high.
However, the median asking price was still 4.9% higher than a year ago at $379,725, the biggest increase in over a year.
This means the median monthly mortgage payment remains near an all-time high of $2,732, assuming a 7.76% 30-year fixed mortgage rate.
The monthly mortgage payment hit an all-time high two weeks ago when it was $8 higher.
Total Housing Payments Are Up Over 10% From a Year Ago
When you factor in the steeper asking prices and the higher mortgage rates, total housing payments are still up 10.6% year-over-year.
So despite increased inventory and rising price cuts, it’s not as if discounts are rolling in.
The only real improvement has been a pullback in rates, providing a boost to affordability in an otherwise bleak environment.
If you zoom out and look at all of 2023, and ignore the month of October, mortgage rates remain close to their highs for the year.
In other words, while affordability improved relative to a month ago, it remains at/near its worst levels of the year.
As such, it might benefit buyers to continue to wait for prices/rates to come down further.
This counters advice from Redfin economists, who “recommend that serious homebuyers consider locking in a mortgage now.”
The economists, like many others, are cautious with regard to mortgage rates and concerned they could easily reverse course.
They cite the upcoming CPI report, which will be released on November 14th. If you reveals that inflation ticked up again, mortgage rates could resume their climb.
And they’re not wrong that it’s much easier for mortgage rates to go up than come down.
Mortgage lenders are generally defensive in their pricing. They’re happy to raise rates at the drop of a hat, but reluctant to lower them, even if the data supports it.
So if you are far along in the home buying process, it could make sense to lock in a mortgage rate and avoid taking chances.
Prices and Rates Could Continue to Fall into December
It could make sense to continue to wait to buy a home, as pressure has finally seemed to ease on mortgage rates.
At the same time, housing inventory is climbing at a time of year when it typically doesn’t, indicating possible incoming weakness on pricing.
This means it could be beneficial to bide your time on a home purchase, instead of rushing in to nab what could in hindsight be a small discount relative to recent levels.
A while back, I dug through Freddie Mac data and found that mortgage rates tend to be lowest in December.
The 30-year fixed has averaged 5.97% in the month of December, nearly 0.25% lower than the 6.18% rate typically seen in the months of April and May.
Those months also tend to be when homes sell for the most money as it’s the traditional spring home buying season.
There are more buyers out, more demand, increased bidding wars and competition, and higher rates.
So there’s certainly an argument to be made about buying a home in the latter months of 2023, at least relative to other months recently.
But overall, it still feels like it’s not a good time to buy a home, at least from an investment standpoint, in most areas of the country.
Until asking prices and mortgage rates come down, it could pay to continue waiting for better.
Start closing more contacts with conversations that convert! Today’s guest, Alan Stewart Jr., has mastered the art of conversation and joins us to share tips on converting potential clients. Alan also discusses the steps Realtors should take in order to become real estate authorities, the best measure of success, and the value in finding your why. Tune in and learn how to turn your next conversation into a business opportunity!
Listen to today’s show and learn:
Why Alan Stewart Jr. got into real estate [2:20]
The value in finding your why [5:22]
A better way to measure success: The Six Cs [9:59]
Three categories for increasing conversion [14:24]
Why it can be difficult to win business from friends and family [16:13]
One way to become an authority figure instantly [19:07]
Why niching down is a great strategy for building your business [20:33]
Developing skills in a specific subject matter [22:50]
Creating a database of your ideal clients [26:32]
Identifying sources for sales [27:40]
The three parts of conversations [31:27]
How seemingly forced conversation starters can work [33:59]
Getting good at conversations in order to convert [36:21]
Getting better at social cues [38:29]
Establishing a high-quality follow-up sequence [40:21]
Alan’s advice on real estate CRMs [43:15]
Alan Stewart Jr.’s upcoming book, Becoming More [43:46]
Where to find and follow Alan Stewart Jr. [46:18]
Overcoming call reluctance to build your skills [49:57]
Alan Stewart Jr.
Alan Stewart Jr. started in Real Estate in Late 2015. In 2016, he founded a brokerage out of a basement Called Yellowbrick where he was the only agent. Since then, he has grown the brokerage from himself and a partner to nearly 100 agents and does over 300 million in annual sales volume. The brokerage currently sits at number 15 in the State of CT in both units sold and Volume sold.
He was Realtor of the Year in 2017. He has coached hundreds of agents and responsible for dozens for becoming nationally top-producing Realtors.
In 2021, he founded ASK insurance which currently has over 70 Carriers and a book of business of over 2 million dollars. He is a Real Estate investor that has flipped over 100 properties and owns a few million dollars in rental properties. Alan will say his biggest accomplishment is being a dedicated and present single father of his son, Alan Stewart III.
Alan believes in living a large life through faith, self-improvement and disciplined consistency so he can give MORE, that is why he helps raise 10’s of thousands of dollars for charity every single year for the last half decade for a variety of causes.
Related Links and Resources:
It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.
The average American net worth varies due to many factors, with some people making far more than others. If you’re behind the national average, it may seem difficult to catch up, but whether you have bad credit or a lot of debt, you can still begin building your net worth by learning how to generate passive income.
Passive income is a great way to generate more income, pay down your debt, and start saving and investing for your future. Here you’ll learn what passive income is, as well as different ways to make passive income online and offline. With 25 passive income ideas, there is something for everyone.
25 Passive Income Ideas:
Write an E-Book
Start a YouTube Channel
Try Affiliate Marketing
Create a Blog
Sell Stock Photos and Videos
Create an Online Course
Make Sponsored Content
Invest in Dividend Stocks
Invest in REITs
Invest in Index Funds and ETFs
Try Peer-to-Peer Lending
Stake Cryptocurrency
Utilize High-Yield Savings Accounts
Buy Government Bonds
Invest in Art
Buy Property to Rent
Rent Out a Room in Your Home
Buy Domain Names
License Your Music
Design Custom Products
Rent Out Your Vehicle
Use Your Vehicle as Ad Space
Create an App
Flip Unique Items
Rent Out Your Parking Space
What Is Passive Income?
Passive income is a type of income that comes from sources other than your regular employment, and involves a more hands-off approach. Passive income isn’t a “get rich quick” scheme, though some companies make big claims about generating passive income without any work. Passive income does take work to set up, but the goal is that you can make money without managing it on a day-to-day basis.
You’ll generally do most of the work by setting up your source of passive income. While it may require some upkeep every now and then, like updating a product or maintaining a rental property, you’ll earn the majority of your income while pursuing other endeavors.
Like other sources of additional income, passive income is taxable, but when done correctly, you can make enough passive income to surpass your tax bill.
1. Write an E-Book
Whether you’re a writer or not, an e-book can be a fantastic way to generate passive income. We no longer live in a world where publishers are the gatekeepers of books, so you can self-publish a book that can generate passive income. Various websites let you self-publish books, like Amazon’s Kindle Direct Publishing, Apple Books, and Barnes & Noble. Some of these sites also offer print-on-demand services for customers who want physical copies.
You can write a nonfiction book if you’re knowledgeable about a certain subject, or you can write fiction if you have an interesting story idea. Although this can generate passive income, self-publishing can require a bit of an investment. You’ll need to pay for an editor and book cover designer, and you may also want to pay for advertisements. But if you can do the cover art and marketing on your own, you may be able to save some money.
2. Start a YouTube Channel
There are many ways to make money using social media, but YouTube is one of the best ways to make passive income. YouTube pays content creators to run ads on their videos. In order to qualify for the YouTube Partner Program, you’ll need at least 500 subscribers, three new videos within the last 90 days, and 3,000 watch hours within the last year. Previously, you needed 1,000 subscribers and 4,000 watch hours, but the policy was updated in June 2023 with lower requirements.
Like other sources of passive income, making money from YouTube will require an up-front investment of time and money. You need a stable internet connection, camera, microphone, computer, and editing software. You also need to make consistent videos to qualify for the partner program. You can eventually generate passive income by making evergreen videos, because people will watch old videos that bring in revenue—and the more videos you have on your channel, the more money you can make.
3. Try Affiliate Marketing
Affiliate marketing is when you share a link to a product or service, and the company gives you a percentage of any sales made through that link. You can share these links on your social media pages, blog, newsletter, or anywhere else that allows you to post a link. Affiliate marketing is one of the best online passive income opportunities, and you can combine it with any other online method we mention in this article.
One of the most popular affiliate link programs is Amazon Associates. Let’s say you have a YouTube channel where you review electronics, and you make a video reviewing a new TV or laptop. If you link to that product on Amazon with your affiliate link, you’ll receive a percentage of the sale each time someone uses your link.
This isn’t only limited to Amazon, either. Many companies offer affiliate links, so it can be advantageous to reach out to companies for products and services you use regularly to see if they have an affiliate program.
4. Create a Blog
There are a variety of ways to make money from writing a blog. Like YouTube, old blog posts can generate passive income even if people read the post months or years after you wrote it. If you create your own website to host your blog, you can integrate Google Ads and use affiliate links to make money online.
Platforms like Substack combine blogs and newsletters, so every time you write a new post, subscribers receive an email. You can have paid subscriptions on Substack, so users pay a monthly fee to read your posts, and you can have free posts that go out to non-paying subscribers as well.
5. Sell Stock Photos and Videos
If you’re a photographer or videographer, you can earn money for your photos and videos. There are many different websites that buy stock photos and videos, like Shutterstock, iStock, and Getty Images. One thing to consider is that the website gets exclusive rights to your images or videos, but on some sites you can make between 15% and 45% in royalties.
6. Create an Online Course
Many people have expertise in a certain area, and utilizing your knowledge and skills to create an online course is a great way to make passive income online. For example, you can create a course for how to knit, how to take amazing photos, or how to program an app. Websites like Kajabi and Teachable allow you to host and sell your courses.
You may need to invest some time and possibly money in marketing your course to ensure you find the right audience. Some course-hosting platforms like Skillshare also categorize courses by topic for better discoverability.
If you start gaining a following on social media platforms or through a blog, you may get the opportunity to do sponsored content. Companies want to ensure they target the right audience, so if you have followers who may buy their product or service, they’re more likely to sponsor a piece of content. This typically means you discuss their product in a video or write about it in a caption.
In order to generate passive income from a sponsored opportunity, the company will give you an affiliate link. This allows you to make money up front for the sponsored content as well as passive income from anyone who uses your link to buy the product or service.
This route for passive income may take some time because companies typically want people to have a decent following before sponsoring content.
8. Invest in Dividend Stocks
Stocks can be a great way to make money while also investing in your future. When you buy a stock, you buy a small portion of a company. If the stock price rises and you sell it at a higher price, you make a profit, but the stock can also drop in price and lose you money. Some, but not all, stocks offer dividends, which pay investors a dividend per share if the company has a profitable quarter.
When the stock pays out dividends, you can receive the payment directly from your brokerage or reinvest the dividends by buying more of the stock. Like other investments, this can compound and turn into a lot of money over time if the company continues to profit. As you invest in dividend stocks, keep in mind the companies can raise or lower the dividend percentage at any time.
Use MarketBeat’s dividend calculator to look up specific stocks and estimate dividend returns.
9. Invest in REITs
Real estate investment trusts (REITs) are another investment opportunity. Rather than investing directly in a property, you can invest in a REIT, which is a company that owns and manages real estate.
Similar to other investments, there is risk that comes along with investing in REITs. For example, there’s a possibility your REIT investments will lose money if there’s a drop in the housing market.
10. Invest in Index Funds and ETFs
Index funds and exchange-traded funds (ETFs) are some of the safest investments because they offer diversification. Rather than investing in one company, index funds and ETFs allow you to invest in multiple companies simultaneously.
Legendary investor and founder of Vanguard John Bogle was a major advocate for index fund investing. More specifically, he advised people to invest in the S&P 500, an index of the 500 largest companies in the United States. ETFs are slightly different because there are higher fees, but they allow you to invest in a group of stocks for a specific industry. For example, ARKK is an ETF that holds shares for companies that work on innovative technology.
There is still a risk when investing in index funds and ETFs, but they are often lower risk than other forms of stock investing.
11. Try Peer-to-Peer Lending
Another way to make passive income is to become your own type of “bank” by doing peer-to-peer lending, sometimes called P2P lending. Banks make money on loans by charging interest to customers, and P2P lending allows you to do the same thing. Websites like Prosper and Funding Circle allow everyday people to lend and borrow money with various interest rates.
12. Stake Cryptocurrency
Cryptocurrency investing is a highly volatile form of investing, making it especially high risk. Some cryptocurrency platforms allow you to “stake” your crypto, which is when you allow the platform to hold your crypto and lend it to other people. Similar to P2P lending, you make money off the interest.
Cryptocurrency lending and trading is also high risk because there is little to no regulation. Crypto platforms like Voyager have been known to offer extremely high returns and then go bankrupt, preventing them from paying back their users. In extreme cases, there are stories of fraudulent activity from crypto platforms. But if you have a high risk tolerance, this form of investing can be incredibly lucrative.
13. Utilize High-Yield Savings Accounts
A safer way to make passive income is to open up a high-yield savings account, which allows you to make money simply by holding it in your account. Banks use customer funds to lend out money, but unlike crypto staking, bank funds are backed by the U.S. government via the FDIC. This means that if, for some reason the bank doesn’t have the money when you want your funds, the government would provide the bank with the money to pay you up to $250,000.
Many banks and financial institutions offer high-yield savings accounts, with some offering an annual percentage yield (APY) of over 4%. So if you opened an account with a 4.5% APY and deposited $1,000, you would have $1,045 after a year.
People maximize their passive income by not touching this money because it compounds each year. So using that same example, in the second year, you would then earn 4.5% of the $1,045 rather than the original $1,000. And if you add to the savings account each month, you can make quite a bit of money over time.
14. Buy Government Bonds
Perhaps the safest way to earn passive income from investing is to buy government bonds. A government bond is basically a loan to the federal government that pays you back the original amount with interest over a certain period. The reason government bonds are so safe is because the government backs them. When buying a stock, it’s possible to lose your money if the company goes out of business. Bonds are safer because as long as the government exists, you’ll make your money back.
Although government bonds are very low risk, they also offer low returns. Depending on various factors, government bonds may offer a 3–5% return over two to 30 years. To put that into perspective, S&P 500 index fund investing offers an average return rate of over 7.5%[1] .
15. Invest in Art
Similar to stocks, you can also invest in artwork. One way to do this is to buy works of art that you believe will increase in value later. If you’re knowledgeable about art and can find pieces selling for below their value that you can sell later for a profit, you can make a bit of money. Websites like Masterworks allow you to buy shares of artwork with other investors so you take on less risk.
16. Buy Property to Rent
Many people generate passive income by purchasing properties to rent. If you can afford the initial investment of buying a single-family home or condo, you can then rent them out to tenants for a profit. For example, if you buy a house and your mortgage is only $1,000, you can make a profit by charging any amount over your mortgage cost.
In order to take advantage of the passive income aspect of renting, you may benefit from hiring an individual or company to manage the property. Property managers collect the monthly rent and take care of maintenance issues for a fee. Should you decide to invest in rental properties, it’s helpful to factor in the cost of potential home repairs before, during, and after tenants live there.
17. Rent Out a Room in Your Home
If you don’t have the money for a down payment or don’t want to take on the risk of purchasing a rental home, you can always make some extra income by renting out a room. If you have a spare room in your home, you can rent it out for a monthly fee. This is a great option for families whose children recently moved out.
You can use websites like Airbnb and VRBO to connect you with renters. Although many people use Airbnb for short-term rentals during vacations, you can also offer long-term rentals through the website. These sites also let you vet renters before they move in, so you have control over who rents the room.
18. Buy Domain Names
Buying domain names is a sort of investing, so it does come with some risk. People and businesses buy domain names to host their websites, so you can purchase a variety of inexpensive domain names in hopes of people buying them from you later for more. You can typically buy domain names for less than $10 through websites like GoDaddy, but if they don’t sell, you’ll need to pay the annual cost to keep the name.
While this may be a risky investment, people have made a lot of money flipping domain names. It was a big money-maker during the “dot com boom” in the 1990s, Help.com sold for $3 million and NFTs.com sold for $15 million in 2023. Many domains don’t sell for millions, but you may still be able to make a decent profit off domain names in high demand.
19. License Your Music
If you’re a musician, you can license your music in a similar way to selling stock photos and videos. Some websites like Music Vine pay musicians 30% for nonexclusive deals or more for an exclusive license. There are also websites like Epidemic Sound that market to YouTubers and filmmakers by offering a subscription service for royalty-free music.
20. Design Custom Products
For those who are artistically inclined, you can make money creating designs and selling them on websites that sell custom products. Websites like Redbubble, Teespring, and Society6 offer print-on-demand services for your artwork. These websites sell a wide range of products like T-shirts, coffee mugs, phone cases, and more. You get a percentage of the sale every time a customer goes to the website and chooses your design for any of these products
If you have old artwork you created in the past or simply feel like creating in your spare time, you can generate passive income as long as your art is hosted on these types of websites.
21. Rent Out Your Vehicle
Services like Uber and Lyft are popular side hustles, but you can make passive income by renting out your vehicle instead. When people are traveling or have their car in the repair shop, they often need a vehicle to get around. Rather than going to a rental car company, they can rent a vehicle through other websites like Turo or Getaround.
22. Use Your Vehicle as Ad Space
In addition to renting out your vehicle, you can make passive income by using your vehicle as ad space.
Websites like Wrapify connect businesses and drivers, and depending on how much of your car you’re willing to cover with ads, Wrapify will pay you between $181 and $452 per month. There are also sites like FreeCarMedia.com that pay you for wrapping your vehicle or simply advertising on your rear window.
23. Create an App
If you’re a programmer who can create an app, this may be the best way for you to make passive income. Whether it’s a fun game or an app that provides value and convenience, use your creativity and skills to generate income. Apple and Google allow developers to submit their apps, giving you a percentage of the sale each time someone buys the app.
24. Flip Unique Items
One of the oldest ways to generate passive income is to buy unique items, hold them, and sell them at a later date for a profit. If you’re knowledgeable about a certain type of item or are willing to learn, you can make a decent amount of money by buying and holding items.
This is ideal for people who like shopping at thrift stores or going to garage sales. You may find antique toys, memorabilia, sports trading cards, comic books, or other items for a low price that are either worth a lot of money now or will be in the future.
To sell the items or see how much items are selling for, you can use websites like eBay, OfferUp, Craigslist, or Facebook Marketplace.
25. Rent Out Your Parking Space
Some people are willing to pay for a good parking spot. If you have a space you’re not using or don’t mind giving up, you can make money renting it out—especially if you live in an urban area. Websites like SpotHero allow you to list your space.
What’s the Best Source of Passive Income?
The best source of passive income is unique to each individual. There are many options on this list, and some allow you to capitalize on different skill sets. For example, if you have expertise in certain subjects, the best sources of passive income may be online courses and e-books. If you have knowledge about stocks or are willing to learn, investing may be the best option.
When deciding which passive income sources are right for you, it may be beneficial to weigh out the pros, cons, and risks of each one. Remember that many of these options require an initial investment of money and time to get started. Consider your own risk tolerance and financial situation before going all in on any of these methods.
Do You Need Money to Make Passive Income?
While you’ll need money to get started with many passive income ideas, this isn’t the case for every method. For example, if you own a vehicle or have an extra room in your home, you can start renting them out. If you have a computer and internet connection, you have even more options.
Many people who make passive income succeed because they are willing to learn and can invest time into researching these topics. There’s a wealth of information online where you can learn how to excel at specific passive income opportunities like writing an e-book, succeeding as a YouTuber, or using affiliate links.
The Benefits of Multiple Streams of Income
Depending on your specific situation, you may want more than one source of passive income. Whether you’re already in a healthy financial situation or are trying to build your personal wealth and credit score, more income streams means more financial freedom.
The primary benefit of passive income is that you can make money with minimal effort. This means once you get one source of passive income rolling, you can begin adding others so you have multiple income streams that don’t require too much time or attention.
How Passive Income Can Help Improve Your Credit Score
A poor credit score can lead to many challenges—like making it difficult to get approved for new lines of credit, loans, and rental applications—and cost you a lot of money in interest in the long run. Passive income can help you fix your credit by allowing you to pay off your debts. Lenders also look at your total income, so making additional income can help with approvals for new lines of credit, which can also help improve your score. It’s important to know the current state of your credit health. You can get a free credit report card on Credit.com which breaks down your credit score factors and assigns a letter grade for each area, or sign up for our ExtraCredit® subscription for additional credit tools.
Last week provided a terrific, real-life stock market lesson. Let’s dive in.
First, Some Context…
Let’s zoom out to 2023 as a whole.
The market was up 9% in January
Then down 8% the next 6 weeks
Then steadily up from mid-March through the end of July – up 20% on the year
Leading into a recent 3 months of pain – down 10.3% from July 31 through October 27
Why has the market dropped over the past 3 months? It’s strange logic, but it makes sense if we tease it out.
We all know inflation reared its head in 2022, causing the Federal Reserve to raise interest rates faster than ever. Higher rates = slower economy = less inflation.
But a slower economy also presents a challenge for businesses. They’ll be less profitable. And that leads to lower returns for stockholders (stocks, after all, are nothing more than ownership shares of a business).
Stock investors are peering into the future. Will the Federal Reserve continue to hike rates? That’s bad for businesses, bad for stocks, and would push the stock market down. Or will the Federal Reserve stop hiking or even cut rates? Good for business, good for stocks, markets would rise.
Paradoxically, good economic news in 2023 has caused investors to think, “The economy is still too hot, so the Fed will have to raise rates in response, pushing the stock market further down.” Good economic news –> lousy stock market news.
That logic explains the market’s pessimism since July.
Changing Expectations
But last week, on November 1st, Jay Powell (Chairman of the Federal Reserve) announced that – at least for now – the Fed was done raising rates. This caught some investors by surprise. To see this surprise in data, let’s look at the Fed Funds futures data a.k.a. how investors believe interest rates will change over time.
Before the announcement (left, below), investors thought there was a ~30% chance of a rate hike by early 2024. After Powell’s announcement (right, below), that probability dropped to 5%. In other words, a previous expectation was significantly changed.
This is a crucial market fact. News alone doesn’t shock the stock market. But news that differs from expectations does. Investors re-write their previous assumptions, changing their opinions about the “correct” price of stocks. And those changes hit the market suddenly.
Powell’s announcement last week did just that.
The end of interest rate hikes means businesses will be more profitable and sooner. That’s good for stock owners. Their shares are worth more than previously assumed. The market jumped up 6% in one week.
The Real Lesson
What have we learned? We want to anticipate when news “differs from expectations,” right? Not quite.
I mean, we would if we could. But we can’t.
Predicting the future is impossible enough. Let alone predicting the future when looking for news that others disagree with.
Instead, the lesson is to accept that you can’t predict the future. And to continue holding your pre-defined asset allocation through thick and thin.
It’s not easy. Watching our stock allocations drop 10% from July through October wasn’t fun! It’s all too human to think, “I’m going to bail. Time to sell. I’ll buy back in once all this volatility is over with.“
Unfortunately, the volatility never ends. It’s a feature of the stock market (not a temporary bug). And volatility acts in both directions. Last week was a perfect example. The stock market can (and will again) jump 6% in a week. You’d have missed that sudden surge if you had sold to wait for calmer waters.
Stocks will always have days of up or down 1% or more.
And weeks of up or down 5% or more.
And months of 10% or more.
And years of 30% or more.
Not every day, week, or month. But many. If you, like me, plan to hold stocks for decades to come, we’ll face such volatility regularly.
But you won’t hit the peaks if you bail during the valleys. You simply won’t see them coming and won’t be invested when they arrive.
Buy and hold. Stay the course. Don’t try to predict the future.
Thank you for reading! If you enjoyed this article, join 7000+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week.
-Jesse
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The 85 per cent LTV (loan-to-value) five-year mortgage rate dropped below five per cent for the first time since June — and some expect it could “continue to edge downwards”.
Sitting at 4.99 per cent, the Rightmove numbers came after the Bank of England’s decision last week to hold interest rates for the second time in a row.
Simon Gammon, managing partner at Knight Frank Finance, said the below five per cent mortgage rates would help improve property market sentiment, “but only to a point” as many borrowers are “rolling off deals below 2%”.
He added: “The Bank of England’s decision to hold at 5.25% was largely priced in, and we expect the rate of inflation to be the biggest determinant of whether we see more substantial mortgage rate cuts before the end of the year.”
The typical five-year fixed rates could ease to around 4.5 per cent by the end of the year, Gammon said, if the annual rate of inflation subsides to between four and five per cent as expected by the Bank of England.
“Most borrowers are currently opting for tracker products, taking the view that, even if the Bank does opt to raise the base rate again, they would like to benefit from cuts to the base rate next year,” he said.
Rightmove’s mortgage expert Matt Smith said: “A second consecutive pause is a good indicator that the Base Rate has reached its peak, which will be reassuring to those looking to take out a mortgage soon.
“We’ve now seen the arrival of a sub-5%, 5-year fixed rate mortgage in the important 85% loan-to-value bracket — the deposit size we see for many first-time buyers and home-movers.
After sinking Friday, shares of Washington Mutual bounced back in a major way following a report from the Wall Street Journal claiming a significant capital infusion was in the works.
The Journal reported this morning that the Seattle-based thrift is close to a deal with private equity firm TPG that would provide the ailing national bank and mortgage lender with a much needed $5 billion investment.
The deal would help the nation’s largest savings and loan navigate through the mortgage crisis, but result in further dilution for shareholders who have already lost their hats over the last several months.
The terms of the deal aren’t clear, but the $5 billion investment is expected to be structured as a common and preferred stock offering that would land TPG with a “substantial minority holding” in WaMu.
TPG is also expected to get one seat on the company’s 14-member board and the move should eliminate the likelihood of a buyout from another large bank, perhaps quelling the possibility of a Chase WaMu merger.
At the same time, concerns remain if $5 billion will be enough to buoy the struggling thrift, with much of its mortgage holdings in hotbeds like California and Florida, markets that continue to face significant downward pressure.
Late last year, WaMu took a major step back in the home lending business, cutting 3,000 jobs and closing several sales and processing centers throughout the country.
The company also cut its dividend by 73 percent and offered $2.5 billion in convertible preferred stock in a bid to raise capital.
So far 2008 has been the year of the bailout, with Bear Stearns, Thornburg Mortgage, and Washington Mutual all requiring major assistance as mortgage losses continue to pile up.
The paper noted that the government was aware of the deal, but not directly involved, such as in the case of the Chase buyout of Bear Stearns.
Shares of Washington Mutual were up $2.81, or 27.63%, to $12.98 in afternoon trading on Wall Street.
In related news, Accredited Home Lenders said today that it will resume lending after receiving a $100 million capital infusion from its parent Lone Star funds.