![]() Real estate investing is another lucrative way to generate passive income, and many people find it familiar and comforting since real estate is a tangible asset. When you know how to choose investments that generate consistent returns, your money will continue to grow without you needing to put in any extra work. Take advantage of how effortless it is to earn passive income through compound interest, especially when it comes to increasing your cash flow through investing. Most investments earn about 10% each year, so if you do the math, your $100,000 would become $110,000 within the same calendar year…without having to personally contribute any more money toward your investment. In addition, compound interest also applies to your investments. If you haven’t already, open a few different savings accounts in order to increase your cash flow and make the most of this passive income source. ![]() Income generated through savings accounts is free money. To increase your earnings, you can also contact your bank or financial institution to open a high-yield savings account since they are federally insured and earn rates that are higher than the national average.Īs a top-yielding savings account, a minimum investment on your end will earn more in a high-yield savings account than it would in a normal savings account since rates start at 1.5% APY. Because compound interest builds upon itself to give you the most value for your money, the next year you would earn an additional 1% on the total from the year before (the original amount of money plus the interest that was earned the previous year). Within just one year of building interest on your current savings, you’d earn an extra $1,000 in interest alone.Īnd, it gets even better. If you make just 1% interest on your savings annually, you have $100,000 in your account. Money in a savings account automatically earns interest-or more value (money when you think about it tangibly) that you pocket just for keeping your savings account active. You may have heard of a magical thing called compound interest.Įssentially, the power of compound interest is its ability to increase your money automatically right before your eyes. Try some out to see which passive income ideas you benefit most from. There are various strategies for earning passive income and there’s no one-size-fits-all approach.īelow is a list of some of the most popular methods you can use to create passive income. How to Make Passive Income & Build WealthĮarning passive income is an opportunity to make money doing things you enjoy. Let’s walk through what passive income is, how you can generate passive income, and how you can use passive income to supplement your monthly income, build generational wealth that lasts, and gain financial independence. Here's where the idea of passive income streams comes in. ![]() In fact, in many cases, it’s more work to earn money at your 9-5 job! However, when you discover more income streams, you can earn more and build wealth overnight without having to subscribe to the 24/7 hustle culture that surrounds our society. ![]() The key to building generational wealth starts with acknowledging that your active income should not be your only income stream. With the right knowledge, though, it’s easier than it first appears. ![]() However, it can be difficult to know how to start laying the foundation for long-term financial success, let alone sustaining it for years. It’s a way to share your money mindset and skills with your loved ones so your financial legacy lives on. Generational wealth is a term that refers to assets, such as cash, investment funds, stocks and bonds, mutual funds, real estate, or businesses, that can be passed down to other family members as a way of securing their financial standing long after you’re gone. It can also have an impact on the lives of your children, your grandkids, their grandkids…you get the picture. Believe it or not, the money you make today doesn’t only affect your future. Having a passive income can be a real game changer, but first, let's talk about money. ![]()
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