These days, it always helps to have a side gig. Freelancing, ride sharing and babysitting are great ways to earn some extra cash, but if you are working full-time and juggling family responsibilities, the best kind of income to generate is passive.
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However, with so many changes happening in the economy and interest rates constantly fluctuating, certain passive income streams may not always be as lucrative as they are now. If you want to take advantage of these ideas and make extra money, you should act fast.
GOBankingRates reached out to the experts for their thoughts on which passive income streams you should jump on before it’s too late.
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Get a High-Yield Account
There are lots of ways that you can make money using the money that you already have. One of those ways is utilizing high yield accounts that grow your money without any additional work on your part.
“I would start by checking out local banks and credit unions,” said Joe Camberato, the CEO of National Business Capital. “Many of them are still offering high rates on CDs and money market accounts, because they’re actively trying to bring in more deposits. Online banks are another solid option, but just make sure the account is FDIC-insured and do your homework, especially with newer platforms.”
“The easiest and most liquid option would be a high-yield savings account,” added Chad Willardson, the president and founder of Pacific Capital. “Ditch the pathetic 0.01% APY bank account and grab the higher interest rates available from an online bank account. If you can leave your money parked for 6 months to a few years, you can lock in the current interest rates in a certificate of deposit (CD).”
He suggested laddering your CDs, so some of your money becomes available every year, but you can still lock in the highest rates.
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Invest In Real Estate
According to Willardson, “The oldest and most traditional form of creating passive income is investing in real estate. That’s an entirely different conversation than simply depositing money in a bank account.”
He continued, “But if you can be patient and disciplined, you may find the passive income from real estate is a great way to earn increasing cash flow as inflation continues to rise. There are also many potential tax advantages to real estate investing.”
Just note that if you’re going to maximize your profit, this won’t be entirely passive. If you buy a fixer-upper to flip, for example, you can pay someone else to do the work, keeping it passive, or fix it yourself with some labor.
“Higher interest rates can hurt home sales, which can increase demand for rentals,” said Erika Kullberg, a personal finance expert and founder of Erika.com. “Investors can look for solid rental property opportunities to generate passive income when rates are high.”
Rental income, too, can be passive or not, depending on whether you hire a property manager. You might also want to consider the related path of making a profit off of property by putting money into real estate investment trusts (REITs).
Start P2P Lending
If you are in a position to loan out money and collect the interest as a form of payment, then you might want to look into peer-to-peer (P2P) lending as a passive income option.
“Peer-to-peer lending platforms let you become the lender and take advantage of higher interest rates,” Kullberg said. “There are other alternative investments that allow you to loan money to individuals or businesses for higher rates, but I like the simplicity of the P2P platforms, which are accessible to everyone.”
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: Jump On These 3 Passive Income Streams Before It’s Too Late
