Have you been wondering what income-producing assets would increase your wealth so you can have more money in 2023?
Sometimes saving money isn’t enough to boost your bank account- you may need to figure out how to start investing and grow your own money quicker.
We’ll talk about a variety of different income-producing assets that investors can choose from, and the best investments for you will depend on your situation and financial goals.
We’ve put together a list of 15+ income-producing assets that will help you get started on the path to financial freedom and making extra money today.
So… What Are Income-Producing Assets?
Income-producing assets are investments that generate cash flow that aids you in obtaining financial independence and other personal finance goals.
They can be anything from real estate assets, stocks, bonds, and mutual funds to starting an online business venture or other types of investments like real estate rental properties.
The key is they should produce enough income for you to live on while still having money left over after covering your expenses. It’s essentially a steady monthly cash flow that doesn’t necessarily come from working.
By building a diverse portfolio that includes both growth and income-generating assets such as real estate or corporate bonds, you can set yourself up for success throughout all stages of life.
And once you understand the excellent income potential different investments have, it will be more accessible than ever to create an income-generating asset strategy that works best for your unique situation.
1. Savings Account
High-yield savings accounts offer significantly higher interest rates than traditional savings accounts, making them a better income-producing asset!
High-yield savings account options could potentially deliver you much better returns with interest rates than simply sticking your cash under the mattress.
And since they’re FDIC insured, your money is as safe as it would be in a standard checking or traditional savings account. They also are not as risky as investing in the stock market and real estate investing.
- CIT Bank Savings Builder Account has two different options for their savings accounts – the Monthly Savers and High Balance Savers.
- Chime Savings Account offers no minimum balance, no monthly fees, or maximums on interest earned. Read how their credit builder account and high-yield savings can help you improve your finances with our Chime Review.
2. Money Market Accounts
Money market accounts are safe income-producing assets and create passive income as they pay dividends to you. They pay a fixed rate like certificates of deposit (CDs) throughout the time you invest in them.
They are one of the most popular types of investments among investors today. They offer a great mix of safety, stability, and liquidity.
Money market funds do not have to be held for any specific length of time or have minimum balance requirements. Still, there are certain limitations on withdrawals that need to be considered before opening an account.
If you’re looking for a safe way to grow your money with the best income-producing assets, then a money market account might be the best choice for you.
3. Dividend Stocks
When it comes to income-producing assets, the stock market is where you’ll find some of the most lucrative opportunities available.
Companies have two types of dividend-paying stocks: common and preferred. Preferred stockholders get certain rights over common shareholders. For example, they might get a higher percentage of a dividend or first dibs on a company sale.
There are many dividend-paying companies you can invest in. A company that pays dividends is likely to be financially stable and have a long-term outlook for success.
The biggest risk with stocks is if they decline in value. But let’s be real, there’s no such thing as a “risk-free” investment!
Another great advantage of investing in dividend-paying stocks is that it doesn’t require too much time or effort on your end. Nevertheless, some investors choose to develop their own strategy and approach when dealing with dividend stocks.
4. Local Business
In today’s economy, many people are looking for ways to invest their money in income-generating assets and earn a return on their investment.
One income-producing asset that is often overlooked is investing in a local business. This can be a very profitable way to earn income from your investments when done correctly.
There are several things to consider when deciding whether or not to invest in a local business. The most important factor is the health of the local economy.
If the area is growing and doing well, the businesses in that area will likely be successful.
Mainvest is a crowdfunding company that can help you find small local businesses to invest in. Local brick-and-mortar businesses can create accounts on Mainvest and build offers to raise money for their business.
5. Mutual Funds
Mutual funds are a great way to generate a passive income stream through investments. They are made up of multiple investors who pool their money together to invest in the stock market or other assets.
They allow an investor with limited knowledge of investments to easily diversify their portfolio across multiple stocks. And for this reason, they might be a good option for you.
However, some have high fees and require an initial investment before you can begin investing in them. Before choosing any mutual fund(s), it’s important to understand all fees charged by the fund before making your final decision.
Another advantage to mutual funds is that they usually do not require a significant initial investment. Depending on the fund, some may only require as little as $500 to get started.
6. Index Funds
Index funds are another basic income-producing asset that offers a unique and effective way to build wealth and generate passive income. The key to building wealth with index funds is to take advantage of the power of compounding returns.
Since these investment vehicles are so popular, investors can easily take advantage of economies of scale to reduce their costs and create a well-balanced investment portfolio.
The benefit of investing in an index fund rather than an individual stock is that it provides diversification across hundreds or even thousands of stocks. For this reason, they are considered one of the safest investments.
7. Real Estate Investment Trusts (REITs)
People put their money into real estate investment trusts (REITs) to invest in real estate. But what are these income-generating assets, and how do they work?
A real estate investment trust is a firm that owns or finances a rental property and makes money. These REITs can be listed on the stock exchange or privately owned.
REITs offer investors the chance to pool their money and invest in large portfolios of real estate properties, which spreads out the risk. And since real estate investment trusts must payout 90% of their taxable income to shareholders, they offer generous dividend yields.
Since real estate investments are risky income-producing assets, it’s not the best idea for cash-strapped investors to invest.
8. Rental Properties
One of the best ways to invest in rental income-generating assets and earn passive income is by investing in rental properties. Owning rental properties can be incredibly lucrative if you know what you’re doing when investing in real estate.
Single-family homes are pretty straightforward in terms of real estate investing. You’ll have to handle everything from finding tenants to managing repairs and tax deductions.
Perhaps you aren’t looking to rent out another home long-term with real estate investing? Airbnb may be the answer!
You can make anywhere from $100 to over $1000 in one evening by renting out an entire house or apartment for a week or weekend with Airbnb!
Bonds are another popular income-generating investment option when it comes to making money outside of your day job. But they are also one of the most misunderstood income-generating assets when it comes to investing.
Many people equate high returns with higher risk, but this is not always true – just look at bonds! Depending on the interest rate and term of your investment, you may be able to generate a very high return on your initial investment.
Bonds are an excellent investment to have in your portfolio since they typically climb when stock prices fall and provide a more constant income stream than other assets.
That doesn’t happen with an average savings account! Bonds are also considered one of the safer investments when it comes to money market accounts. If you’re looking for ways to make extra money with investments, then bonds may not be a bad option to consider.
10. Rental Spaces
Another great way to generate income off your real estate property is by renting storage space.
Rental spaces can provide a significant income off your real estate. If space is at a premium and storage facilities are rare in your area, rent out your spare space to people or companies who need it.
Today, many people rent rental units in self-storage units and extra rooms in houses, garages, storage sheds, and more for their belongings. With just a small amount of upfront capital, you can rent out your extra valuable space to those in need.
Neighbor Storage can help you get started. Do you have extra space in your garage, attic, or even an entire room in your house? You may even have space in your yard to rent for vehicle storage.
Just list it on Neighbor Storage! They connect people looking for rental space for their stuff with renters who have space! Check out our review of Neighbor Storage for more information!
Farmland is an excellent income-generating asset for several reasons. For one, it’s a tangible real estate asset that you don’t have to be a landlord of!
It’s also an extremely stable investment, as the need for food will never go away. Additionally, farmland is becoming increasingly scarce, which means that its real estate value is likely to rise in the future.
One way that investors can invest in farmland is by investing in U.S. farmland through FarmTogether. Accredited investors can invest a minimum of $15,000 in the crowdfunded farmland opportunities on their site. Recently, we did a review of investing in farmland. Be sure to check it out!
12. Certificates Of Deposits (CDs)
Certificates of Deposit (CDs) are savings accounts that offer fixed interest rates for a set amount of time. They’re popular because they provide a higher yield than most other savings accounts, but you have to commit your money to these safe income-producing assets for a set time, typically three to six months.
For that reason, CDs are best used as short-term investments since you don’t want to be locked into a low-interest rate if interest rates rise while your money is tied up in the CD.
But if you know you won’t need the money for at least six months and you’re comfortable with the interest rate offered by the CD, it can be an excellent way to generate some extra income.
13. Peer-To-Peer Lending
A great income-producing asset is peer-to-peer lending.
The premise of peer-to-peer lending is simple: people with extra money lend it to those who need cash. It’s an online version of loaning your friend $20 for lunch when they forget their wallet. Only it can involve a lot more money!
In return, you pay a percentage of interest on your investment, which can be a bit higher than a bank loan. The significant risk is that you can lose some or even all of your loan money with peer-to-peer lending.
Your money can be lent out to various borrowers in different industries and uses, from buying a personal computer to going on vacation to bigger things like business loans.
Most online peer-to-peer lending companies work the same way, using credit scores and repayment history to decide who qualifies for loans. Then, investors choose whom they want to lend money to.
14. Exchange-Traded Fund (ETF)
Exchange-traded funds (ETFs) are one of the best income-generating assets. They are baskets of stocks or bonds that can be bought or sold just like individual securities.
They can offer diversification compared with investing in individual securities because they hold several securities within the same fund.
However, ETF shares are created to reflect the value of the securities held by the fund, so selling an entire ETF holding does not involve selling individual securities. As a result, investors can trade large blocks without affecting supply and demand for single names in that investment category.
ETFs can be bought or sold anytime during the day at any price, so they don’t have a set value.
An annuity is a lump sum investment given to an investor by an insurance company- just like peer-to-peer lending, you’d be loaning money to the insurance company but with typically lower interest rates, so your investment comes back to you with a little extra money.
This is one of the passive income streams popular among retirees because it’s a fixed income investment- you get back the money you put into it each month
8 Platforms For Investing
There are many places to invest your money to generate passive income. Some are low-risk, some are high-risk, and you get to decide what works best for you.
Here is a list of 8 places to invest in income-producing assets.
Fundrise is an investment platform specializing in real estate investing, getting you connected with investment properties that give your recurring cash flow.
They create diversified portfolios with real estate investments all across the United States.
Also, websites such as Fundrise will help you find eREITs to invest in. These are real estate investment trusts that focus on buying single-family rental homes. If investing in real estate crowdfunding sounds interesting to you, I encourage you to read our Fundrise review.
Robinhood is a commission-free stock brokerage app that allows you to buy and sell stocks, ETFs, options, and cryptocurrencies.
You can open an account with just $0 down and start investing in companies like Apple, Amazon, Facebook, and more.
Robinhood Gold is the premium service offered by Robinhood, which gives you access to extended-hours trading, margin trading, and more.
Betterment is one of the most popular Robo-advisers (an automated investment adviser) around that can get you automatically started with an income-producing asset or two!
They provide portfolios that are built based on your personal situation, goals for investing, risk tolerance, and time horizon.
If you’re looking for a simple, low-maintenance way to invest your money, Betterment is a great option. With no minimum investment required and fees starting at just 0.25%, it’s perfect for anyone new to investing.
4. Arrived Homes
Arrived Homes is great for people looking to invest is real estate without being accredited and having thousands at the ready to invest.
You’re able to invest with as little as $100 and get a fractional share and ownership over single-family homes and vacation rental properties.
You can find out more about the platform with our in-depth Arrived Homes Review.
Acorns is an investing app that takes the spare change from everyday transactions and invests them in stocks, bonds, or ETFs to generate income for you.
With each transaction (such as paying for a cup of coffee), Acorns rounds up to the nearest dollar and sets aside that amount in your investment account.
You can also connect your bank account to the app and they’ll automatically invest the difference between your checking balance and your savings target.
6. M1 Finance
If you’re looking for a way to invest your money without the hassle of high-fees, it’s worth starting a passive income portfolio with M1 Finance.
With the M1 Finance app, you can create your portfolio or sign up for their pre-made pie portfolios. It’s easy to use and has many features for managing your investments and investing in assets that produce income. You can choose from different securities like stocks, ETFs, and cryptocurrencies.
5 Income-Generating Business Ideas
Starting your own online business is a great way to create income-producing assets.
You can start many different types of side hustles, so it’s essential to do your research and find one that fits your skills and interests.
If you’re not sure where to start, here are five ideas for self-employed jobs that produce passive income:
Blogging is one of the best income-producing assets to make a passive income online- and it’s our online business of choice so we have a lot of pointers!
Though it’s easy to start a blog, it’s not always easy to make money from it. To be successful, you need to have a solid plan and put in the work.
You will need to do to get started to pick a web host, like Bluehost, which offers you a platform for only $2.95 per month!
It’s also important to know about the best blogging resources to help you improve your site’s design and provide quality content to your readers.
A blog can be monetized through blogging networks, affiliate marketing, selling advertisements on your website, and selling your products.
Proofreading is a great way to generate income, and all you need is a computer with Internet access.
The amount of money you can make as a proofreader varies depending on your speed and the type of writing you’re reading, but it could be up to $25 or more per hour.
Starting a bookkeeping business can be a great way to earn extra income with an income-producing asset. Not only is it a recession-proof industry, but it’s also one that’s in high demand.
To get started, you’ll need some essential equipment and training, as well as a strong work ethic and attention to detail. With the right combination of skills and determination, you can make your bookkeeping business a success.
Some courses and websites can help you get started in a bookkeeping business. Bookkeeper Launch offers a FREE workshop that helps you learn the skills and techniques you need to start a bookkeeping business.
Your imagination only limits the possibilities for this income-producing asset! Starting an e-commerce business is one of the best income-producing assets.
There are e-commerce sites like Shopify and Etsy to sell crafts or vintage clothing. We have plenty of shop ideas to get you started, including making and selling printables, which have boomed over the last 2 years.
Not sure how to start a printables business? No problem! Check out this FREE E-Printables Ebook to find out how to get your new business off the ground.
One of the best ways to make money online is freelance writing articles. Numerous websites pay for original content, and some even pay a lot!
Several websites will pay you to freelance write for them. Some of them even pay as much as $300 per article!
To be a successful freelance writer, you must have strong writing skills. You can even use Jasper to help you freelance write quality content much faster than before!
If not, consider taking a writing course first. You can continually improve your craft by reading and practicing.
Once you become good enough at writing, you’ll be able to write articles and sell them to many different companies as an easy online business.
Investing in income-producing assets is an excellent way to make money and have massive income potential every month.
Investing is one of the best passive income side hustles you can start, but you need to know about all the best options!
There are many different types of investments that you can use to build your investment portfolio, but not all are created equal.
For example, some assets generate more income than others and take less time. Or some take a lot of time, like starting your own business or managing a rental property, but you can still have excellent income potential long-term.
Always consider your personal finance goals before deciding on any particular investment strategy. That way, you will know which type of asset would work best for you and produce income.
But who says you can’t have multiple income streams anyway? Maybe a few of these assets can substantially grow your wealth!
We have highlighted 15 different income-generating assets to start you on your way to financial freedom.
It’s essential to do your research before investing in any income-generating asset and consult with a financial advisor if necessary. Thanks for reading!