The Top 4 Ways Wealthy People Make Money Without Doing Anything
Written by
Sean Bryant
Edited by
Amber Barkley
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How do the wealthy make money without doing anything? They have multi-million-dollar bank accounts or trust funds to help, but some of their strategies can help you make passive income, too — even without the same resources.
These are the top four ways wealthy people make money without doing anything.Â
Leverage Credit Card Points
The first way the wealthy make money without doing anything is by leveraging credit card points.
The wealthy rarely use debit cards but put all transactions on a credit card to earn points. These points can be redeemed for cash, exclusive travel perks and more. Certain cards offer cash back for purchases instead of points.
Remember, the wealthy never leave a balance — they pay their cards off in full each month to avoid paying interest. Also, this only works if it’s money you would be spending anyway: no additional effort and no over-spending in the pursuit of rewards.
Invest In Dividend Stocks
Next, the wealthy earn money through dividend stocks. Investments in the stock market are generally made for two purposes: growth and dividends. Growth stocks appreciate in value, while dividend stocks pay investors cash for investing in the company.
The wealthy have a portfolio comprised of both dividend and growth stocks; however, for regular cash flow and income, the wealthy load up on dividend stocks. Once an investment is made in a company, there’s nothing else to do but wait for the dividend payout each month or quarter.
Purchase Real Estate
Like dividends, real estate provides consistent cash flow for the wealthy. It’s been estimated that 90% of millionaires are invested in real estate because of the appreciation, cash flow and tax advantages. Owning real estate, like rental properties, provides a great form of passive income — though this is only passive income if there’s a property manager in place.
The wealthy invest in real estate syndications for total passive income. A syndication is a group of investors that pool money together to purchase large properties, such as entire residential complexes. In addition, the wealthy usually have a personal residence that appreciates over time.
Hold Private Equity Investments
Private equity investments are popular among the wealthy. This type of investment allows them to purchase ownership in different businesses that aren’t listed on a stock exchange.
These investments are passive, meaning the investor isn’t involved in the day-to-day management. Instead, they take payouts, like distributions, or earn money through interest on loans.
For example, a wealthy individual might give $25,000 to a private equity firm. The firm can use this capital to invest in one business or multiple businesses that are expected to grow and solidify strong returns. After the initial investment, there’s little to no work involved.
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