How To Generate Passive Income With Just $5,000
Written by
Heather Altamirano
Edited by
Maria Concepcion
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Passive income is a great way to boost your finances and supplement your regular earnings with little time or effort. The prospect of generating extra money in addition to your full-time job or side hustle is an alluring idea and one that’s very possible. If you’ve got an extra $5,000 to invest, here are two common and realistic ways to rake in a cash stream and start your journey toward financial freedom.
Invest in Real Estate
To earn passive income in real estate, many save up a down payment, borrow the rest from the bank, and have renters pay off or down the mortgage, and then some, leaving you with a nice chunk of passive income every month. However, if you don’t have the funds for your rental property, there’s no need to worry. The platform Realty Mogul is a game-changer, making real estate investment accessible to everyone. It allows you to earn a steady passive income and take control of your financial future for as little as $5,000.
How it works: The platform allows investors to access various real estate investments, such as development projects, commercial buildings, and rental properties. You can potentially bring home a passive income without the hassle of managing a property or hiring a property manager.
Buying and Holding Dividend Stocks
Dividend stocks are shares in companies that regularly pay investors a portion of their earnings and can be a profitable way to generate an annual passive income. By investing $5,000 across five different companies that offer higher-yielding dividends, you can earn more than $300 a year, according to Motley Fool. The companies to consider investing in include the following:
- Energy Transfer pays out 3% to 5% per year.
- Clearway Energy pays 5% to 8% “annually and expects its hikes to land near the upper end of that target range through 2026,” according to Motley Fool.
- Real estate investment trust (REIT). Motley Fool reported, “The REIT steadily expands its portfolio by investing in additional income-generating real estate. It recently agreed to buy fellow REIT Spirit Realty in a $9.3 billion deal, which will boost its adjusted funds from operations by more than 2.5% per share next year.”
- Brookfield Infrastructure pays out 5% to 9% annually.
- Verizon is the leading telecom business with the cash flow to invest in growing the business, allowing “the company to pay a steadily rising dividend and maintain a strong balance sheet. Verizon delivered its 17th straight annual dividend hike in 2023,” per Motley Fool.
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