The moment you start earning, you should also consider investing. Start early to expand your investment portfolio and enjoy the returns while you are young and healthy. Investing is a practical financial decision for everyone. However, like any other endeavor, the beginning is always the hardest.

The good thing is that there are lots of resources you can refer to so you can kickstart your investment journey on the right foot. If you are new to investment and found yourself reading this, you are in the right place. Herein, we discuss building passive income streams through investments as well as the strategies you may employ to sustain the assets or items you have invested in.

Peer-to-Peer (P2P) Lending

Also known as marketplace lending, peer-to-peer (P2P) lending utilizes online platforms to match borrowers and lenders without the intervention of conventional financial institutions like banks.

With P2P lending platforms, businesses and individuals can request quick cash through loan listings. Institutional lenders can assess these requests and decide to offer funding based on expected returns and level of risk tolerance.

As a P2P lender, you can earn recurring interest on these loans. During the loan period, it can accumulate interest, which can be a reliable source of passive income.

Dividend

When you are a company stockholder, you are also entitled to financial returns through the company’s profits. The reward you receive from taking the risk of investing in a specific business is called dividends. They can be stock dividends or cash payments.

The dividends you may receive will depend on the amount of your shares. For instance, if a business gives out $1 per share and you have 100 shares from that company, then you will receive $100 from your investment. Besides cash dividends, a company can also reinvest the cash they earn or issue stock dividends instead.

You may receive cash dividends every month, quarter, or year. But it will all depend on your choice of company. Do your research before investing. Make sure the company has an excellent and consistent record of paying their stockholders regularly.

Having a history of success is crucial. Remember that companies earning billions don’t translate to a good investment. To guarantee that you receive the dividends worth your investment, check the US Securities and Exchange Commission (SEC) disclosures of a company’s records of dividends paid in the past.

Royalties

Royalties are the financial returns granted to the original creators of an intellectual property (IP). These IPs can take the forms of inventions, software, music, literary pieces, and books, among many others.

Let’s have an original song as an example. When musicians compose, record, and publish music, they are entitled to royalty fees, which are financial compensation they receive every time their song is streamed, played on the radio, or used in a commercial.

The royalty fee will likely depend on the fixed amount per play or download or the pre-agreed percentage of the income earned from the song’s usage.

That means that artists aren’t all broke. Those who shine in mainstream media reap financial returns on their investment, which is mainly their art and passion. You only get to produce your music once and receive recurring payments every time your creation is used for commercial purposes.

Rental Properties

By owning a rental property, you are also planting a seed that will reap sustainable financial benefits that are passive and low-maintenance. The passive income you will earn from rental properties is mainly from the rent that tenants pay.

However, while it can be a good source of passive income, you must also understand the responsibilities of owning rental properties. For instance, you must work on collecting rent, finding tenants, and maintaining the property.

In addition, also consider the tax implications for this type of property. You must understand that rental properties are taxable. However, you can benefit from tax deductions if you’re diligent in finding ways to save money on taxes. Deductions cover expenses on things like repairs, property management fees, and maintenance.

Internet-Based Business

Internet-based businesses are businesses that thrive online. As you can observe, almost all businesses have their digital storefronts, which are their websites. The most popular internet-based business opportunities are content creation, marketplace, and software.

These businesses can be potentially passive and viral income sources. For instance, if you want to write an ebook, you may look through the internet for the most in-demand topic discussions you can cover in your material. You can catch the wave, write it, and publish it online. You only get to create it once and enjoy a recurring source of income.

Takeaway

Today, people are becoming more innovative when it comes to investing. With so many assets and items we can invest in, anyone can jump into this journey if they have enough funds to set their right foot in. The ones we have covered in this guide are only five of the most in-demand passive income streams for investment. Start with one of these five and work on the strategies we have shared here.