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Here Are The Income Producing Assets You Should Know About

Here’s a news flash: There are things called “income-producing assets,” and yes, they produce income for you. That’s the whole point. But one of the details of IPAs (no, not the beer) is that they can make you money “passively.” That is to say, without much work on your part. These IPAs are excellent for supplementing your regular income and paying off some of your everyday living expenses. While this may seem like a fantasy, it is a real possibility if you make a good investment.

Keep in mind that an income-producing asset that’s 100 percent passive is incredibly rare. Any investment you make is usually going to take a bit of work upfront. But here are a few good’uns. Many of them are very conservative, this means that they have low volatility and you won’t be able to make tons of money, but on the upside (and they should still go up), they are relatively safe bets meaning you probably won’t lose money either. FYI, there is never a guarantee with investments that you can never lose money. Save the more aggressive investments for when you’ve really learned your stuff vis-à-vis investment strategy. For now, start here today.

Certificate of Deposit (CDs)

A certificate of deposit is a low-risk financial investment that is offered by most banks. It’s pretty simple, actually. You loan the bank some money for a set amount of time. This set amount of time is known as “a term length.” Then you gain interest on the principal during this time. The term length can last anywhere from three months to five years, during which time you won’t be able to touch that money. That’s the deal. If you do, you will incur a penalty. The good news is that this money is pretty much definitely going to grow at a fixed rate. And since CDs are insured by the FDIC up to $250,000, they’re incredibly low-risk. Having said this, there are a few drawbacks to CDs:

  1. Inflation — If inflation goes too high, it is possible to lose money in CDS.
  2. Length of investment — If you can’t really afford to part with some cash for a while, it will be a hard blow to incur penalties for trying to withdraw the cash early.


Bonds are like IOUs, but you’re not the giver — you’re the receiver. And you’re receiving the IOUs from the government or a corporation. Yeah, it’s good to know people in high places. And it’s even better to have them owe you a favor.  Much like CDs, these bonds are:

  • Very stable. You will know beforehand just how much you will be getting back.
  • You get a guaranteed return unless the bond issuer defaults (which is very unusual). You can even choose for how long you want to keep the bond (one year, two years, five years, etc.).
  • They do give a smaller return on your investment when compared with more aggressive investments like stocks.

Real estate investment trusts (REITs)

REITs were established by the U.S. Congress in the 1960s to give people the opportunity to invest in income-producing real estate. REITs are a collection of properties operated by a company (also called a trust) that uses your money to buy and develop their real estate. But here is where it gets good for you: Your investment will not only put a foot in the door for the real estate industry — if that is something that interests you — but REITs also pay out in dividends. To get started, go to your online broker and purchase a REIT like you would a typical investment. If you have no idea what an online broker is or where to find one, then check this out.

(NOTE: There are some taxable implications for REITs.)

These next four are a bit riskier assets. But YOLO!

Dividend-yielding stocks

As compared to bonds where you are lending an entity money, if you buy stock in a company, you are a shareholder and you own a piece of the company, albeit a small one. Investing in stocks is riskier than buying bonds, but certain companies are a surer bet for investors than others. These are generally known as “blue-chip companies,” those companies whose names you recognize and which have generally been around for a while, are well established and have substantial assets. These types of companies often pay out dividends, which is a way for the company to share its profits with its shareholders. Dividends are paid at regular intervals. Blue-chip companies are pretty dependable investments, and dividends can provide a nice income stream, but they are still riskier than the other investments we have been discussing.

Property rentals

Ever thought about owning property? It’s a pretty great investment for those who can afford it. It’s three simple steps:

  1. Buy a house, apartment, or apartment building.
  2. Rent out your property to tenants for a fee.
  3. The rental checks come in like gangbusters each month while you sip piña coladas and make passive income.

Just joking, because it isn’t that simple. There are some major things you’ll need to know that might be deal-breakers for you. First, real estate is expensive, and unless you are a person of substantial means (in which case you probably won’t need to be reading this as you are already sipping piña coladas), it will be a challenge just to become an owner. Second, like with stocks, the value of real estate can fluctuate wildly and the potential to lose big money is there. Third, you will be responsible for providing your tenants with certain things under the law and for the property as a whole. For example, if you own a building and people totally trash the lobby with — I don’t know — a firework or two. Who knows with kids these days, am I right? You will be on the hook for repairs, maintenance, and also for chasing down tenants who don’t want to pay. Although you definitely can make money from renting out properties (and loads of people do just that) just remember that there is a risk involved. The potential to trash your finances is there, and it does happen. You can also go the Airbnb route and just rent out a spare room in your house. That may be a less risky first step

P2P lending

Also called peer-to-peer, or crowdlending, this option allows people to make loans or get loans without involving financial institutions. In this scenario, you could be the bank. In other words, you loan money via a peer-to-peer lending platform (such as Lending Club), and the people you lend money to pay you back. With interest! Or else you break their legs, financially speaking! You’re like a gangster! Only, in a legal way. People get to avoid the incredibly high-interest rates, background checks, and penalties for bad credit histories, and you get to pocket some much-needed dough. Win-win! It can be very fruitful indeed. But remember: Dealing with people with bad credit history, for instance, is an inherently risky investment!


In an economy that can be pretty cruel to those dependent on wages or salaries, it is important to know how to leverage your assets to make some extra cash. These are a few ways you can start supplementing the income you earn from your day job without grinding out those hours at work and learn about investments at the same time. And you can start today, too!

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