3 Simple Ways To Earn Over $25,000 In Passive Income | personal financing

(Selina Marangian)

Passive Income – Who wouldn’t want it? While you have to work for your paycheck and may also work a side job to get extra money, passive income quietly flows into you without much effort on your part.

It’s possible, depending on your circumstances, that you get to the point where you earn more than $25,000 in passive income—each year. Here are ideas on how to achieve this.

Image source: Getty Images.

1. Dividend shares

Dividend-paying stocks are a great proposition for nearly any investor, not just those close to retirement or have retired. That’s because they pack a one, two, or three punch: When the dividend payer is healthy and growing, it will provide reliable income through dividends, no matter what the economy or stock market does. This return is also likely to increase over time. The value of the stock itself is likely to rise over time.

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Dividends are very passive income. You only need to buy a Shares that pay dividendsThen you can start seeing the dollars build up in your investment account – or you can choose to get them Automatic reinvestment in additional shares of stock.

Here are some of the well-known and most recent companies Dividend returns:

stock

Recent Dividend Yield

Verizon Communications

5.2%

IBM

4.9%

Intel Corporation

3.8%

Pfizer

3.3%

Medtronic

3.1%

PepsiCo

3%

Starbucks

2.6%

Data source: Yahoo! Financial issues.

2. Real Estate Investment Funds

Real Estate Investment Trusts (REITs) They are also dividend-paying stocks, but they are a special type of stock. They belong to companies that have bought a lot of real estate — often in one or more places, such as apartments, industrial sites, or medical buildings — that they rent to tenants. (Some REITs are invested, instead, in mortgages.) REITs are also required by law to pay out at least 90% of their income in the form of dividends.

Here are a few of the highly regarded REITs:

Rit

Recent Dividend Yield

WP Cary

5.1%

Real estate income

4.6%

digital real estate trust

3.9%

general storage

2.6%

Prologies

2.5%

American Tower

2.4%

Data source: Yahoo! Financial issues.

3. Property rental

Finally, you might consider investing in actual rental properties. This involves much more than just buying shares of dividend-paying stock, or REIT. You’ll need to do a lot of research first, and learn a lot about it Real Estate InvestmentYou will need to be able to purchase such property or real estate as well.

If you’re going to be an owner, make sure you know what that involves, to get an idea of ​​whether it’s right for you. Some personalities are not well suited to dealing with tenants who do not pay rent or who do property damage. (Yes, you can hire a management company to handle such things, but then you give them a portion of your earnings.)

Understand also that while many people have made a lot of money by owning rental properties, it is not always as profitable as you think. You will probably have to pay a mortgage on it, along with taxes and insurance. You’ll need to pay for maintenance, repairs, and upkeep, too.

How to get $25,000 in passive income

It may take a while to reach $25,000 and above in passive income per year, unless you have a lot of money willing to go in right now. If you invest in a group of dividend payers and the average total dividend return is 3%, 4%, or 5%, here’s what you can expect in dividend income annually (remember that healthy, growing dividend payouts tend to increase their payouts now and later):

wallet value

3% average dividend yield

4% average dividend yield

5% average dividend yield

$100,000

3000 Dollars

4000 dollars

5000 dollars

$250,000

7500 dollars

$10,000

12500 dollars

$500,000

$15,000

$20,000

$25,000

750 thousand dollars

$22,500

30 thousand dollars

$37,500

1 million dollars

30 thousand dollars

40 thousand dollars

$50,000

$1.5 million

$45,000

60 thousand dollars

$75,000

2 million dollars

60 thousand dollars

$80,000

$100,000

Data source: author accounts.

You will see that amounts much larger than $25,000 are quite possible – although it may take some time to put together a large enough investment account. Once you have passive income, it can really help you financially. For example, you can reinvest those dollars in more stocks, or if you are retired, you can simply use the money for living expenses.

It is also possible to make $25,000 a year with rental properties, but it all depends on a range of factors, such as the rent you can charge, the reliability of the tenants, the value of the property, the costs you incur, etc. .

there Lots of other ways To prepare yourself for the gathering passive income, with the above ideas among the most popular ways people follow. Find out which ideas make the most sense for you.

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Selena Marangian He has positions at Digital Realty Trust, Medtronic, Realty Income, Starbucks and WP Carey. Motley Fool has and recommends positions at American Tower, Digital Realty Trust, Intel, Prologis and Starbucks. Motley Fool recommends Verizon Communications and recommends the following options: long January 2023 calls $57.50 on Intel, short January 2023 calls $57.50 on Intel, and July 2022 short calls $85 Starbucks. Motley Fool owns a profile Disclosure Policy.

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