 Financial planners say their clients earn the most passive income from 4 sources |
Source |
American Shipper |
Post Date |
08/02/2024 |
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?inancial planners said real estate is a top source of passive income for their clients.
?But they also see digital products, blogs, pods, and YouTube channels generating money.
?Divid investing is a traditional way to get passive income that works well for clients, too.
Making passive income isnt always as easy as it sounds ?it takes time and money up front, and the benefits dont come overnight. But financial planners say its possible ?and a worthwhile pursuit.
To find out how people are earning passive income, Business Insider asked several financial advisors to share their clients top passive-income sources.
Heres what they said.
1. House hacking and real estate
Financial planner and Facet Wealth cofounder Brent Weiss said hes seen a significant number of his clients turn to real estate, more specifically house hacking, to generate passive income.
House hacking, or buying a home with the intention of renting out a room or separate unit within the home, is a simple way to get into real estate investing.
When it comes to passive income, "the No. 1 thing we all talk about is real estate," Weiss said. "But when I talk to my clients about real estate, what it takes to do it, they sometimes reconsider their overall goals."
Oftentimes, investing in real estate can require a higher down payment than buying your own home, as well as some extra work managing tenants.
House hacking reduces those hassles while still generating income. "Probably half of my clients are now thinking about real estate differently," he said. "All of a sudden theyre paying half their mortgage and creating additional income for their family."
2. Divid investing
With some shares of stocks, companies offer investors a piece of the profit, with each share earning an amount in cash periodically. While it likely wont be monthly income, divids can be truly passive income.
"Divid income is definitely one major source of passive income that a lot of my clients have," said Akeiva Ellis, a financial planner and founder of The Bemused. Shes seen this from her high net-worth clients, but she said its also growing in popularity with her younger clients, too.
"Of course, theres the appreciation and the capital gains that everybody is familiar with. But ing companies that also give divids to their shareholders on a regular basis is another part of the whole investment portfolio where youre able to get income out of it as well," she said.
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3. YouTube channels, pods, websites, and apps In addition to real estate and divid investing, senior financial planner Andrew Westlin of Betterment saw another tr among his clients.
"Passive income sources like pods, websites, apps, YouTube channels generating income off of ads ?those are really common sources of passive income that Ive seen," he told Business Insider.
While these types of passive income may be more inconsistent and time-intensive than other methods, theyre often enjoyable.
"Whats been really awesome is seeing clients, fris, and family members turn these ideas that are where they sp a lot of their time on, and turning it into an income stream," he said.
4. Creating digital products for sale online Ellis said that digital products are a common way shes seen clients earn passive income recently.
"You see a lot of people these days starting up new business ventures where theyre selling digital products or information products," she said.
Generally, it consists of products for sale online. "Im seeing people creating digital products. Whether thats a prin they sell online, or a worksheet, or a guide, or an ebook or an online course, its those kinds of things that people can set up once, and that requires little to no maintenance."
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