Is one of your 2022 resolutions diversifying your portfolio and earning more money?
Then, you’re at the right place. In this age of the internet, there are so many ways you can make passive income. Having several income streams will provide you with more financial freedom and flexibility, improving your quality of life.
Here’s a detailed guide on how to make passive income in 2022:
Cryptocurrency
From Bitcoin to NFTs, 2022 is the year of blockchain technology. With cryptocurrency popularity rapidly growing over the last few months, this market size is expected to hit $23.3 billion by 2023.
Anyone can make a passive income from cryptocurrency, you don’t need experience. Some of the popular ways to make money include:
- Mining
- Lending
- Arbitrage
- Masternodes
- Margin funding
- Participating in EOSApps
- Running a lightning node
Nonetheless, cryptocurrency is volatile and uncertain. Therefore, do not invest more than you are willing to lose.
Buying Bonds
Bonds provide investors a way to lend money to enterprises, states, municipals, and federal governments. This brings better interest income compared to buying shares and stocks in a company. Bonds often yield small returns because of their reduced volatility and safety.
You can invest in bonds over a long period while increasing your bond ratio as you get closer to retirement. For instance, you can begin with two years, six years, seven years, and finally a ten-year bond.
There are multiple types of bonds to invest in including corporate bonds, the federal treasury, and tax-free municipal bonds.
Peer-to-Peer Lending
Here, you lend money to your peer which you will be refunded in form of EMIs (equated monthly installments). This is the interest income produced and the principal amount. The borrower will pay you monthly using a digital P2P lending platform.
With the money in your account, you can decide to either reinvest in your platform or withdraw. The P2P platform will offer insights into the borrowers’ data, helping you make informed decisions when lending out loans.
Some of the leading P2P platforms include LendingClub, Prosper Marketplace, and Funding Circle.
High-Yield Savings Accounts
People have traditionally retained their investment accounts with their checking accounts at the same bank. This made transfers between the banks faster and simpler. But, with the emergence of internet-only banking, savings rate competition has increased, spawning a new group of “high-yield savings accounts.”
High-yield accounts pay 19-26 times the national average for conventional savings accounts. They are a good middle ground for your investment as they provide principle protection, the security of government insurance, and a larger income than a standard savings account.
Rental Properties
If you don’t know where to invest in real estate, consider starting with short-term or long-term rentals.
Long-term rentals provide a solid source of income, especially if they are located in a prime rental market. However, they do come with their fair share of challenges including mortgages, property tax payments, property maintenance, and other expenses.
You can avoid some of these hurdles by considering short-term rentals which rely on companies such as Airbnb, Expedia, Booking.com, and Tripadvisor. This type of rental income is reliant on a regular stream of visitors to make profits.
Before choosing between long-term and short-term rentals, consider the following:
- The property’s total expenses and costs
- Financial risks associated with owning the property
- Expected returns out of your investment
Seek the services of a reputable real estate professional to take you through the process.
Real Estate Investment Trusts (REITs)
A REIT is basically a company that finances, owns, and operates real estate that generates income. These companies bring together the capital of many investors, making it possible for members to earn dividends from real estate investments. Investors don’t have to finance, buy, or manage the properties themselves.
Common types of properties in a REIT portfolio include:
- Hotels
- Apartment complexes
- Office buildings
- Retail centers
- Warehouses
- Self-storage centers
- Healthcare facilities
- And more
REITs, like any other company or dividend stock, can be purchased on the stock market. You’ll get whatever dividend the REIT pays out depending on how many you have. REITs are popular for raising their payout yearly, providing you with a steady stream of dividends.
They also have unique legal structures that allow them to pay minimal or no corporate tax once they distribute a majority of their profits to shareholders.
Affiliate Marketing
Affiliate marketing works when you (an affiliate) refer a product/service by sharing it on your website, social media platform, blog, or podcast. You will receive a commission when a visitor clicks on your link or makes a purchase. The fee varies from 4-8% depending on the number of visitor clicks.
If you can increase your audience or find a more interesting niche (such as fitness, financial services, cryptocurrency, or software), you can make some serious money in this space. Although Amazon is the most well-known affiliate partner, other big brands you can try include ShareASale, Awin, and eBay.
Social media platforms like TikTok, YouTube, and Instagram, have grown in popularity among those trying to build an online following and market their affiliate links.
Copywriting
As more and more businesses focus on their online presence, the future is bright for copywriters. Quality content for online businesses is in high demand now more than ever. With the right copywriting skills, you can earn significant passive income well into the future.
You can make more money by going further and creating an agency, outsourcing work, and creating your own blog to monetize traffic.
Learn How to Make Passive Income in 2022
Whether you’re a teenager growing your YouTube channel or an experienced investor starting a rental income business, having passive income boosts your financial security and gives you more control over your life. If you don’t know where to start, the ideas above on how to make a passive income should come in handy.
All in all, there is no such thing as a get-rich-quick plan. While passive income is possible, getting there requires effort, informed strategies, and commitment.
For more informative posts on how to make more income, be sure to browse our up-to-date blog.
