Our final article about the Top 5 Passive Incomes of 2018 will include another two ways to create some passive income for you, one much like the recent, completely unusual theories that we explored in the last article, and one much less strange – but both are extremely successful if you’re willing to try something new, and stick at something long enough for you to see the rewards in your account.
To begin with, we’re going to start with Lending Money.
Yes, it sounds dumb, lending money to make money… How can it possibly work?! Well, I’ll explain it in this metaphoric example:
You sign up to a legit Lending site and read a few testimonials for individuals that can’t get the bank to finance them to follow their dreams, you focus on one that wants to have her own business. She projected that if 1,000 different people lend her $25 each, she would gain $25,000 to start her business. This also goes with a 4-6% interest rate per annum (year). So, if you’re sitting on a 6% interest rate and she only takes 1 year to pay back, you will receive $25 plus $1 interest, however if she takes 10 years to pay you back, you’ll receive your $25 plus $15 interest.
This form involves a lot of trust, and faith that these people are real and will pay you back, but at the end of the day, would you rather risk $25, or the full $25,000?
High Yield Saving Accounts are accounts invested into to maximise the earnings potential of your money, with most of them sporting >3% interest rates which is far superior to that of your usual bank’s 2% or less. These accounts can generally be told apart from the traditional banks based on their type of institution. Traditional banks rules, more often than not, have too many rules (for example a high minimum balance), which don’t work for many people. A way around this is to research into online banks and utilise them.
All banks have rules for how you can store your money, and this is how the types of high-interest savings is differentiated. Some may request a minimum deposit, some may be more than 3% interest, and some may not… Do your research.
High Yield Saving Accounts are a great thing to look into, but there are a few catches that you have to be aware of.
– If you’re not with that bank already, the transfer times may be lengthy to go from one account to the other.
– ALWAYS READ THE FINE PRINT! Don’t get caught like a deer in the headlights when you get caught out. The banks may only offer an introductory interest rate, others may charge you if your balance drops below a certain amount. Be aware of all the little things that they could call you out on.
These are two very different forms of passive income, however if you’re willing to try something different, one of these may be for you!
There is still one more post to come about the Top 5 Passive Incomes of 2018, it will be published soon, so stay tuned!