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- Financial advisors mentioned that real estate stands as a primary generator of passive income for their clientele.
- However, they also observe digital goods, blogs, podcasts, and YouTube channels earning revenue.
- Investing in dividends is a conventional method to generate passive income that also proves effective for clients.
Generating passive income isn’t always as straightforward as it might seem – it requires initial effort and investment, with rewards not appearing instantly. However, according to financial experts, this approach is both feasible and advantageous to pursue.
To learn about how individuals are generating passive income, Business Insider conversed with multiple people.
financial advisors
In 2021, who revealed their customers’ primary sources of passive income?
Here’s what they said.
1. Tackling house hacking and property investment
Financial advisor and co-founder of Facet Wealth
Brent Weiss
mentioned that he has observed many of his clients shifting towards real estate investments, particularly through house hacking, as a way to create passive income.
Renting out part of your property as you live in it, often referred to as house hacking, provides an easy entry point into real estate investment. This strategy involves purchasing a residence with the plan to lease out sections like rooms or individual units.
Regarding passive income, “the top topic everyone discusses is real estate,” according to Weiss. “However, once I explain to my clients what’s involved in investing in real estate, they often rethink their broader objectives.”
Oftentimes,
investing in real estate
may necessitate a larger initial down payment compared to purchasing your own residence, along with additional tasks related to tenant management.
By engaging in house hacking, you can minimize these inconveniences while simultaneously earning money. He mentioned, “Roughly fifty percent of my clients have started viewing real estate from a different perspective.” He continued, saying, “Suddenly, they find themselves covering only half of their mortgage expenses and adding extra income for their household.”
2. Dividend investing
When you own certain stock shares, businesses provide investors with a portion of their earnings, paying out money for each share at regular intervals. Although this might not result in monthly revenue, dividends can indeed serve as a largely hands-off source of income.
“A significant source of passive income for many of my clients is undoubtedly dividend income,” stated Akeiva Ellis, a financial planner and the founder of.
The Bemused
She has observed this trend among her high-net-worth clients, but she mentioned that it’s becoming increasingly popular with her younger clientele as well.
“Certainly, people understand the appreciation and capital gains. However, picking firms that distribute dividends regularly to their stockholders adds another layer to your investment portfolio, allowing you to generate additional income,” she explained.
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3. YouTube channels, podcast series, online sites, and applications
Alongside real estate and dividend investing, senior financial advisor Andrew Westlin of
Betterment
noticed another pattern amongst his customers.
He told Business Insider that popular methods for earning passive income include podcasts, websites, applications, and YouTube channels that generate revenue through advertisements.
Although these forms of passive income might be less consistent and require more time compared to some other strategies, they tend to be quite pleasurable.
He mentioned how amazing it has been to see clients, friends, and family take the concepts they dedicate much of their time to and transform them into revenue streams.
4. Developing online goods for purchase over the internet
Ellis mentioned that lately, many of her clients have been generating passive income through digital goods.
She mentioned that nowadays many individuals are launching new businesses focused on selling digital goods or informational products.
Typically, these consist of items available for purchase over the internet. “What I observe is individuals developing digital goods. This could be something like a downloadable printout, or perhaps a worksheet, a handbook, an e-book, or even an online class. These types of offerings allow creators to develop them one time with minimal ongoing upkeep.”
Don’t know where to start? Consider a financial advisor.
Finding a financial advisor
It doesn’t have to be complicated. With SmartAsset’s free tool, you can connect with up to three fee-only financial advisors in your region within minutes. These advisors have undergone scrutiny from SmartAsset and adhere to a fiduciary standard, ensuring they work in your best interest.
Start your search now.
The initial publication of this article took place in June 2021.
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