Elon Musk was stunned by Warren Buffett’s Coca-Cola dividend windfall — 3 ways you can build passive income
However, keep in mind that past performance isn’t a guarantee of future results. When buying a dividend stock, don’t just focus on its payout or yield. Take the time to understand the company’s business fundamentals, and if you’re following Buffett’s lead, look for companies with durable competitive advantages.
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Real estate
Real estate is another popular option since well-chosen properties can provide investors with a steady stream of rental income. It is also considered a reliable hedge against inflation, with property values and rental income often rising alongside the cost of living.
While the prospect of collecting monthly rent checks sounds appealing, being a landlord does have its challenges. Property ownership involves ongoing responsibilities like handling maintenance issues — from fixing leaking faucets to managing major repairs— as well as dealing with tenant-related concerns, which can sometimes be time-consuming and unpredictable.
But these days, you don’t need to be a landlord to start investing in real estate. There are plenty of real estate investment trusts (REITs), as well as crowdfunding platforms that allow you to earn rental income without becoming a landlord.
Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 A.M. tenant calls.
Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.
Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks..
Another option is First National Realty Partners (FNRP) , which targets necessity-based commercial real estate. The platform lets accredited investors own a share of institutional-quality properties leased by national brands like Whole Foods, CVS, Kroger and Walmart. Investors can expect to collect stable, grocery store-anchored income every quarter.
High yield savings options
High-yield savings accounts offer a low-risk way to generate passive income while keeping your funds accessible. These accounts usually provide higher interest rates than traditional savings accounts, allowing your money to grow steadily without being tied up in long-term investments.
For those willing to lock in their funds for a set period, certificates of deposit (CDs) are another solid option. CDs often come with even higher interest rates than high-yield savings accounts, making them an excellent choice for those seeking a bit more return with minimal risk.
With MyBankTracker, you can shop and compare top certificates of deposit rates from various banks nationwide.
Their extensive database shows the most competitive rates, with daily rate updates and personalized recommendations based on your risk preferences and time horizon so you can find the right CD to meet your retirement savings goals.
One thing to note about CDs: If you withdraw the money before the end of the term, you’re likely to face penalty fees.
There are also non-bank options like the Wealthfront Cash Account, offered by Wealthfront, a financial services company known for its robo-advisor platform. The cash account currently offers a 4.00% APY, along with FDIC insurance coverage of up to $8 million through partner banks.
The account comes with zero account fees and offers unlimited, fee-free transfers and withdrawals, making it a flexible and secure option for growing your cash reserves.
Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)
This article originally appeared on Moneywise.com under the title: Elon Musk was stunned by Warren Buffett’s Coca-Cola dividend windfall — 3 ways you can build passive income
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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