What are your best assets
18 Income Producing Assets That Will Grow Your Wealth Today
Have you ever wondered what it takes to grow wealth?
You may have a few answers in mind, but one of the main areas of wealth creation is investing in income generating assets.
These types of assets will generate multiple streams of income for you that will help keep your nest egg connected over time.
Personally, I was a huge fan of multiple income streams long before I was even interested in personal finance.
I'm not sure exactly where this mindset came from at the time, but it always felt like a great way to protect yourself with money flowing from different directions.
If companies are able to have multiple sources of income and have their hands in multiple pools of money, why shouldn't the people who actually work for these brands be able to do the exact same thing? ”- Roland Martin
Best Income Producing Assets
One thing I learned from teaching myself personal finance is that you need to invest in income producing assets.
Beginners and beyond need to master this idea and move forward with it.
Income Producing Assets Definition: Simply put, these are assets that help get your money to work and generate more passive income for you.
But what are some safe income producing assets? What Are Some Assets Beginners Should Buy ?, Don't Worry, You Are At The Right Place!
When you're ready to take your finances to the next level and build long-term wealth, below are some of the best income producing assets to consider.
And in this first section, remember that there is a higher level of risk in these assets. However, a good investment portfolio will help offset these risks and diversify your income.
Dividend payment stocks
Without a doubt, investing in the stock market is the most popular income producing asset. And you have a couple of options, like single stocks, mutual funds, or index funds and ETFs.
What's cool about stocks is that many companies pay out a dividend or share of money just to invest in them.
There are some big companies that are increasing the size of their payouts every year!
Lots of stock investors enjoy playing the dividend game in order to passively live on the returns, not something you have to do, but dividend investing is also a much bigger topic that I won't fully dive into here.
Either way, you can choose stocks for dividend investing or index funds, which include a mix of companies with dividend payouts.
In my rollover IRA with Vanguard, I have such an index fund called the Vanguard Dividend Appreciation Index Fund (VDADX).
Many, many millionaires have been made by owning rental properties and real estate. And people continue to build their wealth by owning property.,
It's not the easiest outlet and there is a lot of risk involved. But real estate can also be very rewarding.
By owning rental properties, you can collect a nice rental check every month that pays your mortgage. In addition, you build equity in your property and later you can sell your property for potential profit (up to the housing market).
You can buy apartments, duplexes, houses, holiday homes and use services like AirbBnB to make money on your property.,
Real estate crowdfunding
While building wealth has been proven with physical properties, the real estate crowdfunding sites are also growing in popularity.
Rather than needing large amounts of money upfront and dealing with property maintenance, crowdfunding removes some of these limitations.
These platforms do the work for you and instead choose which properties to invest in based on your goals. This could also be a portfolio of different properties or individual properties.,
There are a few variations of real estate crowdfunding platforms, but each offers investors a chance to get a piece of the real estate pie.
Many initial investments are as low as $ 500 to $ 1,000. And some of the best are:
- Ground floor
Something I haven't personally delved into, but a popular option for generating extra income, is peer-to-peer lending. You may have come across it as P2P, or "crowdlending" as it is sometimes called.,
Essentially, you are borrowing money to other people through one of the few P2P platforms. This personal loan is then repaid with interest so that you can make money on it.
It's great for those in need of quick cash because they don't have to jump through financial paperwork like a bank. Also, the interest rates are much higher when they are through banks.
The downside for the investor is that you may have to rely on someone with gross credit to repay the loan.,
Typically, however, the P2P provider will provide risk details on any loan investments you have made. For platforms like LendingClub or Prosper, the average returns can be between 4-8%.
Build an online business
One of my favorites on this list is building an online business. There's a lot of potential to build an audience.
But once you create that audience, it can be a great income producing asset. Besides, you can also sell it on the street.,
Business online can be anything from starting a WordPress website to buying an existing website to starting an ecommerce store with Shopify, Amazon FBA, or a digital product that you sell (like an eBook).
Many of the businesses created online can become relatively passive. That said, at some point it doesn't take a lot of alimony to continue a flow of income for you.
But be aware that there can be a lot of groundwork and time to get this done. But the money you make can be an added bonus and even potentially life changing.,
Own Your Own Traditional Business
I separated that from the previous section as traditional businesses are a little different from online businesses. However, they are just as effective as an income producing asset.
And you have a wide range of options here, but to name a few:
- Coffee shop
- Car wash
- Food truck
However, some of these companies can take a lot of effort and hard work to complete. And others require less time and require little maintenance.,
Additionally, there may be some significant upfront cost or need for a storage location.
But what you might be doing here depends on whether you want to work full-time for yourself or just get some extra income on the side.
Safer Income Producing Assets
While the above options are fairly common, they come with a medium to high risk of up to which you are considering.
There's nothing wrong with just picking a few, but you have a few other options.,
Below are some safe income producing assets that might be good for a beginner to start with. Some may still have some risk, but are relatively lower compared to the previous section.
Savings Account / Money Market
you shouldn't think that really fits, but technically that's still a basic income producing asset.
And this is especially true if you choose the right savings account or money market that gives you decent interest rates.,
If you want to protect yourself from stock, real estate, or other investment risks, but still want some income, these accounts are for you.
The challenge here is the interest rates are quite low so the return on your money isn't great. However, your money is not at risk and you can access the money quickly if you need to.
Some of these online banks are my favorites, but any bank with an interest rate above 1% will do pretty well. It is up to you which bank or money market account suits your current money needs.,
Certificate of Deposit (CDs)
When I was younger I had an older family member who gave me savings bonds and encouraged me to have CDs for my future.
As years and years went by, the money that started wasn't groundbreaking. But I got interest on my money, which was then used for college expenses.
CDs are secure income-generating assets provided by banks.
They work like a savings account, except you won't have access to the money for a period of time.,
They basically just give a personal loan to the bank for their use, but after a period of time they will earn a rate of interest.
But when inflation rises and your CD length comes up, you may not be making a lot of money. Something to Consider When Thinking About CDs.
Investing in bonds is somewhat similar to CDs. The difference is that you are not lending the money to the bank, but to governments or companies.,
Often times, you may invest in different types of bonds on the stock market which are safer investments to balance your portfolio.
And bonds tend to be much more stable than stocks and have some guaranteed returns. They are, however, yielding lower returns than stocks. But remember, with safer investments usually comes lower returns.
Here are some of the types of income producing bonds that exist:
- Corporate bonds
- Junk bonds
- Treasury bonds
- Municipal bonds
You can read more about bonds here if you're interested in diving a little further.
If you've been a reader of this blog, you've definitely come across REITs by now. REITs stand for are Real Estate Investment Trusts and are basically the mutual funds of real estate.,
Rather than owning rental properties or investing in real estate crowdfunding, these are funds run by companies that own multiple properties.
The money you invest goes towards buying and developing real estate.
These income producing assets will help you avoid the hassle of owning real estate. It also diversifies your real estate into corporate buildings, apartments, hospitals and more.
And what's cool is that these REITs are legally required to distribute over 90% of their profits to shareholders, which can generate a nice income for you.
You can find these in your brokerage account as mutual funds or index funds, like Vanguard's VGSLX or their ETF called VNQ.
There are also some private REITs like stREITwise, which also offer different diversifications and risks.
Additional income generating ideas
In addition to the ones listed in the previous two sections, there are a few additional income generating ideas that you may also want to consider.
I didn't go in depth on these as I have limited experience and knowledge, but just know they exist and possible options for you may be.
Timber / Wood
Art investing (see Masterworks)
Ultimately, it is your choice whether you want to be more conservative or aggressive with your potential investments and assets.
But to build wealth and grow your wealth, you need to invest in income producing assets.
The key, in my opinion, is to just get started and be consistent with your investments.,
Find out your financial goals, risk what you can afford, and stick to the course with regular check-ins and rebalances.
The above are some of the most common options, as well as some safer options that also need to be considered. These are not all income generating ideas, but should be a great place for you to start.
Hope this helped!
What are the most profitable assets?
Some of the most profitable income generating assets include:
- Dividend paying stocks
- Real estate crowdfunding
- Real estate investment trusts (REITs)
- Online businesses
- Rental properties
- Peer-to-Peer Lending (P2P)
What are good assets?
Good assets are items that you can invest to generate income for you, such as stocks, real estate, real estate crowdfunding projects, as well as an online business. These can also appreciate in value overtime in addition to generating money for you.
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