1.Stocks with monthly dividend payments
One of my favorite investments to get regular monthly income is investing in stocks with monthly dividend payments. You can expect a regular monthly dividend payment of 3-8% on an annual basis. For example, Realty Income ( O ) is a very famous REIT ( Real Estate Investment Trust ) investing in a diversified real estate portfolio. More specifically, it has 6,600+ properties under long-term net lease agreements and more than 600 different clients.
Realty Income pays a dividend yield of 4.15,% which is more than generous. If you’re interested in this type of investment, here you have the 6 best monthly dividend stocks:
|Main Street Capital||5.8%|
Staking is similar to cryptocurrency mining but less resource-intensive. It involves holding funds in a cryptocurrency wallet to support the system through liquidity and security of operations. ( SOURCE )
In other words, you just put and lock your cryptocurrency on an online wallet to receive rewards. With staking expect to earn an annualized interest rate of 4-7% for most popular cryptocurrencies. For example, on Binance, you can get 7% annual interest for staking Bitcoin.
|Cryptocurrency||Annualized Interest Rate|
But is cryptocurrency staking safe? Generally speaking, it is safe, but you have to consider the following risks: lockup periods, price drop risk, liquidity risk, and theft. Learn more about the risks of crypto staking in this article.
3. Rental Properties
Investing in rental properties is one of the most popular ways to get regular monthly income. It’s one of the first things that comes to mind when you think about monthly income. But is it easy to be a landlord? Hell, no! Repairing drywalls, unclogging a toilet, or painting should be among your skills. Or you can always hire a property manager, but that will eat into your profits. Most rental property investors who own 1 or 2 properties tend to fix things on their own.
What returns to expect? You should aim for returns of 5% to 7%, but to be on the safe side, you can aim for 8% to 10%. Of course, just like any other type of investment, rental properties are risky. You should factor in the fact that tenants can be a pain to deal with. Some tenants don’t pay the bills on time, and others call landlords for any minor problem that occurs.
Read more: How to Bird Dog Real Estate
On the other hand, you should also consider that real estate is not as liquid as stocks. If you want to sell your property, you may need to wait a while. One of the most significant benefits of investing in rental properties is that, unlike stocks that you cannot see or touch, real estate is a tangible physical asset.
4. Short-Term Corporate Bonds
Short-term corporate bonds are relatively low-risk investments, and because of that, they’re often used as a risk reduction tool in an investment portfolio. Short-term corporate bonds are usually issued by industrial, utility, and financial companies, with maturities between 1 and 5 years. The most significant risk is increasing interest rates causes the prices of the bond. You have to be very careful at choosing your bonds. You can expect an average total return of 0.2% to 2% per month.
If you think this type of investment is too complicated, you can always invest in a short-term corporate bond fund. One of the best right now is Vanguard Short-Term Corporate Bond Index Fund Admiral Shares ( VSCSX ). It pays a monthly dividend of 1.87% and requires a minimum investment of $3000.
5. Private REITs
Privately owned funds typically invest in commercial real estate – often apartment buildings. Using a bigger pool of money, individual investors are allowed to invest in more significant projects. One of the biggest downsides of privately owned REITs is that they’re not as liquid as public REIT’s and you might find it challenging to sell your shares.
On the other hand, you can get a much bigger return on your investment compared to other property investment strategies. Expect to earn between 6% and 10%, depending on the project.
Keep in mind that according to the legislation, private REITs can be sold only to institutional investors, and they are exempt from SEC regulations. ( SOURCE ) Also, note that private REITs have a much higher minimum investment amount compared to public REITs. Typically $1,000 – $25,000 for most projects, but sometimes you can see even minimums of $50,000.
6. Online assets – Websites
Online assets, aka websites, are becoming more and more popular investment these days. Usually, successful web properties sell for around 35X to 45X their monthly net profit. In other words, if you buy a website that earns $1,000 per month, you will pay for it on average $40,000. For those $40K invested, you will get $12K ( 12 months x $1,000 ) back each year with profits. This means a staggering 30% return on investment per year. Yes, affiliate websites can make vast amounts of money, but they’re extremely risky as well. Keep in mind that a successful affiliate website can lose 95% of its organic traffic overnight with a single Google algorithm update.
How websites earn money? They can earn money through affiliate marketing, Amazon FDA, advertisement, selling digital products, or eCommerce. Some the best websites out there combine a few of the monetization methods for diversification. If you’re interested in buying or selling websites, check Empire Flippers.
7. Money Markets & Certificates of Deposit
Parking your money into money markets and certificates of deposit is considered one of the safest investments. They’re both regulated and insured by the Federal Deposit Insurance Corporation ( FDIC ), which means you’ll get back your money in case of bankruptcy ( subject to FDIC rules and limits ).
Both investments can get you a regular monthly income, but they also have some significant disadvantages. The biggest one is that you can’t take your money out of it until it matures without incurring a penalty. If you might need immediate access to your money at some point, you should look into other investments.
Currently, CD rates are meager but still above standard saving accounts. Expect to earn between 0.40% and 0.75% annual percentage yield. If you want to compare CD rates in many different banks and institutions, check this excellent comprehensive comparison guide.
This one is probably not as passive as some other investment methods, but you get the idea. You trade ( invest ) your time for money with a side gig on Upwork or Fiverr. You can earn a decent income if you have the knowledge and experience, especially in some very lucrative niches like Digital marketing, web development, and finance.
You should invest as much as possible when you’re still young. You can later invest all your monthly income from freelancing to a monthly dividend stock that will continue to grow and pay you dividends. This way, you will stack incomes and create massive wealth over time. As we already know, time is the most significant element in the magic of compounding – the ability to grow an investment by reinvesting the earnings.