9 Income-Generating Assets To Buy Now

Most of the assets people own are lucky to hold their value over time rather than depreciate. But a few types of assets actually generate income after you buy them.

These assets may not be as tangible as a house or a car, but they’re even more valuable in many cases, because they provide you with income you can use to buy more assets or re-invest.

Financial experts explain nine income-generating assets you should buy now.

The stocks that are worth investing in are those of well-established companies that pay regular dividends, according to Taylor Kovar, CFP, CEO and founder of Kovar Wealth Management. These can be a reliable source of income if you pick correctly, he said.

“These stocks often belong to companies with a strong history of profitability and financial stability. Dividends can provide a steady income stream and the potential for capital appreciation.”

Bonds, particularly government and high-grade corporate bonds, are another asset that can provide a steady income through regular interest payments, Kovar said, though the return might be lower compared to more aggressive assets — but then so is the risk.

Shawn Carpenter, chairman and CEO of Stock Alarm, called bonds “your cozy blanket, offering regular interest payments and a promise to return your money.”

What makes them a good bet is that “Treasuries are super secure, while corporate bonds can spice things up with higher returns, though they come with a side of risk,” Carpenter said.

“With interest rates playing hide and seek, you should look at the more adventurous high-yield or emerging market bonds for some extra zing.”

For those seeking lower risk, certificates of deposit (CDs) offer modest but stable returns.

“While the income generated may be lower, these assets come with federal insurance, providing a safety net for your capital,” Kovar said.

With interest rates being on the higher side still, now is a good time to reap a decent return.

Annuities can provide a guaranteed income stream, Kovar said, which is particularly useful for retirement planning. They can be structured to pay out over a set period or for the lifetime of the investor.

You can be your own asset, Carpenter said. “P2P lending platforms let you lend money directly to folks or small businesses. The returns can be pretty sweet, but remember, with significant returns comes greater risk. Spread your bets across different loans to keep things in check.”

If you have the time and interest to buy and sell art, according to True Tamplin, CEFP, founder of Finance Strategists, it may be a worthy pursuit.

He said, “Investments in contemporary art have yielded an average annual return of 14% in the last decades, outperforming the S&P 500’s return of 9.5% during the same period.”

He does warn that this market can involve high fees and is unregulated. But, he said, “It does offer diversification, potentially reducing overall portfolio risk.”

If you’ve already thought of starting a business, Tamplin suggested you look into franchises of well-known brands in strategic locations.

“Franchises offer the advantage of established brand recognition and support systems but require significant upfront capital and adherence to franchisor rules and systems,” he explained.

The cost and potential profit vary widely, as well. National or global franchises may require an investment of anywhere from $100,000 to $1 million, while smaller franchises can be started with around $10,000 to $20,000.

If you have the capital to invest in real estate, you can create a consistent stream of income through a variety of assets, according to finance expert Andrew A. Lokenauth, founder of the finance blog Be Fluent in Finance.

He broke down the types of real estate that are most effective:

• Residential rental properties: Investing in rental properties can provide a steady income stream through rent payments, Lokenauth said. “It’s important to research the local market and choose a property that is likely to attract long-term tenants.”
• Airbnb rentals: Renting out properties on Airbnb can provide a shorter-term rental income stream. “It’s important to research popular tourist destinations and choose a property that is likely to attract a consistent stream of guests,” he said.
• Property management companies: “Investing in property management companies can provide a passive income stream by managing rental properties for other investors,” he said.
• Real estate investment trusts (REITs): REITs allow individuals to invest in a diversified portfolio of income-generating properties without directly managing them.
• Real estate crowdfunding platforms: He explained that platforms like Fundrise, Rich Uncles and PeerStreet allow individuals to invest in real estate development projects and earn returns through rental income or property appreciation.

High-yield savings accounts offer higher interest rates compared to traditional savings accounts, Tamplin said, and some of them offer significantly more — as much as 12 times the national average.

“[These accounts are] ideal for investors seeking a safe place to store emergency funds or short-term savings,” he said.

The more income you hope to generate through your assets, the higher the risk you’ll take, so choose accordingly — or vary it up with a mix.