6 Ways Lazy People Are Boosting Their Bank Account

Making money while you sleep has a beautiful ring to it, and that’s the idea behind passive income.

Most people think of income as something they have to do labor for, like going to work for a day and then getting paid.  Passive income is money you earn even when you’re not working. It takes some investment of time, money, energy, or all three, but then the money just comes in, helping you pay off a student loan, dig out of credit card debt, save for retirement, or advance other personal finance goals.

Do you want to get started? Here are 6 ways lazy people are boosting their bank account:

6 Lazy Ways to Boost Your Bank Account

These truly passive income ideas require a one-time investment followed by zero future effort. There’s no upkeep, fuss, or muss, and these are some of the most straightforward passive income sources to implement.

1. Alternative Assets

Alternative assets, or alternative investments, are often headline news. Because traditional investments like stocks and real estate sometimes involve a lot of market volatility, and savings accounts only offer low-interest rates, people are looking for other options.

Some of the more popular alternative investments include hedge funds, private equity, crowdfunded real estate investments, and commodities like wine, geeky collectibles, and even luxury watches.

LuxeStreet, for example, offers partial shares of high-end watches at a minimum investment of $10,000. This luxury watch investment pays 12% per year at the rate of 1% each month. The best part of it is your investment is backed by luxury watches owned outright by Luxe Street.

Pro: Alternative investments give you exposure to unique asset classes, different from everyday stocks, bonds, real estate, etc.

Con: Alternative investing is a fledgling industry with developing regulations. Consequently, these types of investments may be riskier in terms of losing your money than those more highly regulated.

2. Passive Real Estate Investing

Talk to any landlord, and they’ll tell you that “passive” is the last word they’d ever use to describe the rental property management. However, many companies give you the ability to invest in commercial and residential real estate projects without being involved in the day-to-day management.

One example is DiversyFund. It’s a private REIT (real estate investment trust) that allows you to passively invest in professional real estate for as little as $500. DiversyFund focuses its investments on lowerisk multifamily housing, and they use technology to scour the country for properties that fit their specific criteria.

DiversyFund looks for high occupancy and favorable cash flow properties that need an influx of cash to pay for some upgrades or repairs. These aren’t complete renovations. Instead, a typical DiversyFund property might just need an updated bathroom or kitchen, or maybe just a fresh coat of paint. After minor renovations, the upgraded properties merit increased rents, which means higher property value and more money in return for your investment.

Holding periods for DiversyFund properties tend to be in the five-year range, and preferred returns for their properties are in the 7% range.

Pro: DiversyFund does all the hard work for you, giving you exposure to residential real estate without requiring you to be a landlord.

Con: As with any third-party investment, DiversyFund charges fees.

3. Earn Passive Income with Lending Club

If you’re looking for another way to earn passive income, you may want to consider Lending Club’s peer-to-peer lending platform. Lending Club will enable you to loan your money out to people and groups looking for funding. Lending Club allows passive investors to diversify their assets by investing in different types of loans. The type of loans you choose will determine your investment return and risk exposure.

You need to invest as little as $25 in a single loan. Then, your investment is combined with other investors to make up the entire loan amount. While others may invest more, many investors choose to stick with $25 minimums across multiple loans, and this diversification tends to decrease risk.

After making your initial investment, you will start earning passive income from the borrowers’ repayments. As a borrower pays down their loan, you will receive monthly interest payments. Since this is a peer-to-peer lending platform, you’re essentially the lender, collecting the principal and the interest. After you’re repaid, you can choose whether to cash out or reinvest your funds in other Lending Club loans.

Pro: Lending Club allows you to help many different loan seekers while earning passive income yourself.

Con: If a few of your borrowers cannot repay the loan, it can be easy to miss out on profits or lose money.

4. Invest in Dividend Stocks

Dividends are profits paid out to owners of stocks. Some companies pay dividends regularly, which means that dividends can become a dependable source of income if you amass a significant number of shares over time.

Investors who love dividend-paying stocks will discuss how their investment generates dividend income and appreciation. In other words, they’re getting a regular supply of money (from the dividends), and the underlying stock is increasing in value (as the company grows).

Keep in mind that stocks with high dividends still carry risk. Dividend stocks can drop in value like any other stock, and they are similar to other equities in that they’re usually best to buy and hold for a long time.

But if you have some extra cash to invest and understand the risk involved, dividend stocks are something to consider. Perhaps an index fund full of them would be right for you, and just make sure you understand the risks of index fund bubbles.

Pro: A proven income stream with over 100 years of heritage, backed up by some of the world’s most blue-chip companies.

Con: “Prior results do not guarantee future outcomes.” Your initial investment could lose 50% overnight if the stock market crashes.

5. Open a High-Interest Savings Account

Savings accounts are a reliable way to protect money but not increase it. Sadly, brick-and-mortar banks barely pay any money in interest, and institutions like Wells Fargo, Chase, Bank of America, and others pay around 0.08% interest. So you could have $100,000 in the bank and earn less than $100 per year in interest. That’s nothing!

That’s why keeping your savings in a high-yield savings account is clutch. The best high-interest banks are online-only, so you won’t need to mess with going into the bank to get started. And some pay as much as 0.70% interest per year.

You could also look into money market accounts, treasury bonds, or certificates of deposit for lowisk, stable return investments.

Pro: As safe as safe can be.

Con: Meager returns. Inflation might cause you to lose buying power.

6. Long-Term Index Fund Investing

Do you believe that the global economy will continue to grow and progress? And do you have 10+ years to invest money and build eventual passive income streams? If so, index investing might be for you.

An index fund is a mutual fund that owns a wide assortment of assets. Some index funds are focused (e.g., an automotive index fund might own all automotive stocks). Other index funds are broad (e.g., a total market index fund might own every store on the stock market). It is one of the ways to double 10k.

Either way, the idea of index funds is to lower risk by diversifying their assets and reducing their costs by enacting simple asset ownership rules. Index funds don’t look for the needle in the haystack, and they just buy the whole haystack.

Over the long run, index investing has proven to be a very successful method of portfolio growth. And if your portfolio is growing, you can skim off some of the profits as passive income.

Pro: Proven method of long-term monetary growth and successful retirement planning.

Con: Not a short-term passive income solution.

The Bottom Line

Remember, generating passive income requires creativity and some initial work to set things up. You’ve got to consider the value of time!

But if you can take some time to learn something you think you’d be good at, you can start to make money outside a traditional day job. So take an intriguing idea, do your homework and give it a try. You’ll be on your way to building an income stream for yourself in no time.

Previously published at Wealth of Geeks.

By Marjolein Dilven