Passive income is a popular way to supplement your regular earnings and boost your finances with minimal effort. It offers the opportunity to generate extra money on top of your full-time job or side hustle, providing a path towards financial freedom. If you have an extra $5,000 to invest, there are two common and realistic ways to start earning a passive income stream.
Investing in real estate is a traditional method of earning passive income. Many people save up for a down payment, borrow the rest from the bank, and have renters pay off or down the mortgage, leaving them with a steady stream of passive income every month. However, if you don’t have the funds for a rental property, platforms like Realty Mogul have made real estate investment accessible to everyone. With as little as $5,000, you can invest in various real estate opportunities such as development projects, commercial buildings, and rental properties. This allows you to earn passive income without the hassle of managing a property or hiring a property manager.
Another way to generate passive income is by buying and holding dividend stocks. Dividend stocks are shares in companies that regularly pay investors a portion of their earnings. By investing $5,000 across five different companies that offer higher-yielding dividends, you can earn more than $300 a year. Some companies to consider investing in include Energy Transfer, Clearway Energy, a real estate investment trust (REIT), Brookfield Infrastructure, and Verizon. These companies offer annual dividends ranging from 3% to 9%, providing a reliable source of passive income.
Overall, passive income is a great way to diversify your income streams and build wealth over time. Whether you choose to invest in real estate or dividend stocks, the key is to start early and stay consistent with your investments. With just $5,000, you can begin your journey towards financial independence and secure a more stable financial future.
