3 High-Risk Passive Income Streams That Are Also High Reward
Written by
Gabrielle Olya
Edited by
Amber Barkley
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Oftentimes the higher the risk is, the higher the potential reward is. This holds true for setting up passive income streams, as well.
“High-risk, high-reward opportunities are attractive, because they offer the chance to really cash in if your bet on yourself pays off,” said Scott Lieberman, founder of Touchdown Money.
If you’re willing to give up guaranteed success for a potentially higher payoff, you might want to try one of these high-risk passive income streams.
Stock Investing
Investing in stocks allows your money to make money for you. While you could always lose money on a bad stock choice, your chances for success will increase the longer your time horizon is.
“Investing in the stock market always carries risk, but the rewards usually pay off over time,” Lieberman said. “As long as you can be patient in the market, you can make a nice profit.”
Real Estate Investments
Buying real estate as an investment typically requires a lot of capital upfront, which can be inherently risky. However, it can also really pay off.
“Investing in the right area in real estate can pay off big time down the road,” Lieberman said. “If you’ve invested in land people really want to buy, you can sell it when demand is highest to maximize profit.”
Invest in a Friend’s Business
You don’t have to be a venture capitalist to gain profits from another business’s success.
“If a friend has a good business plan, investing in their idea can help you earn passive income off their work,” Lieberman said. “If you can get in on the ground floor, you can get a percentage of their profits if they succeed.”
Of course, there is always the chance their business fails, which is why this is a high-risk, high-reward scenario.
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