10 Income Producing Assets To Invest In

Are you curious about the key to accumulating wealth? The solution is quite straightforward. Invest in income producing assets. The aim is to make your money work for you and to increase your income. This is crucial because, as time is limited, there’s only so much of it you can exchange for cash. 

Investing in income producing assets without requiring constant effort is therefore a very sensible decision. Let’s first discuss what income producing assets actually are!

What is an Income Producing Assets? 

In short, it is an asset you invest in now with the expectation that it will bring you money later. Essentially, they are investable assets. However, it’s crucial to approach this with a plan in mind. 

Diversification is key to achieving significant returns on income producing assets. As the saying goes, “Don’t put all your eggs in one basket,” right? Yes, that is accurate. 

Diversification is one of the fundamentals of investment. The reason it works is that it safeguards your revenue; some investments might perform well even if others don’t.

In today’s volatile economy, having diverse income streams is more crucial than ever. Investing in income producing assets is an excellent method to achieve this. 

Here Are 10 Income Producing Assets to Invest in

1. Internet-based business

Launching your own internet business is one of the most popular income producing assets. Many types of internet businesses require a lot of initial effort, but the potential for income is limitless. Examples of online businesses include blogs, e-commerce sites hosted on platforms like Shopify or BigCommerce, and even selling on eBay and Amazon.

Building an internet business requires a lot of time and effort, and real progress may not be seen for up to two years. However, with a strong foundation, you can earn a very respectable living. Eventually, you will be able to manage the business with less time and still make money. You may even be able to sell your online property or maintain it as a source of additional income.

2. Equities

Equities are a fantastic income producing assets. They can provide a reliable stream of income to support your retirement plans. Specifically, dividend equities can offer a steady stream of income, helping you create a strong revenue stream with almost no effort. Many large, well established businesses usually offer dividend equities.

These dividend paying companies are spread across a wide range of sectors, including basic commodities, utilities, financial services, healthcare, and oil & gas.

3. Rental Properties

Are you looking for a high-risk, high-reward source of income? Consider rental properties. These can be apartment buildings, multi-family residences, or even single-family homes. This type of cash flow can be steady during prosperous times. 

However, during economic downturns or periods of high job losses, you will need to exercise caution. Being a landlord is not an easy task. As a property owner, you are responsible for leasing, upkeep, repairs, and mortgage payments. Creating a savings cushion can help you prepare for these expenses, but occasionally you might be caught off guard, particularly by unforeseen costs.

Usually, unforeseen costs consist of maintenance and repair expenses. It’s crucial to keep these in mind, as many homeowners frequently overlook them and are later caught off guard by hefty fees. Although it can seem overwhelming, being a property owner can be a very financially rewarding experience if you put enough thought and preparation into it.

4. Brick-and-mortar Establishments Immune to Recession

Like life, business typically operates in seasons. Many businesses have peak and sluggish seasons, during which they spend a lot of time preparing for the next wave of growth. However, not every business operates in this manner.

Certain businesses are immune to recessions. There will be steady, if not rising, demand for these firms regardless of the state of the economy. These businesses include grocery stores, auto repair shops, laundrettes, and healthcare-related enterprises like nursing homes and agencies. 

The demand for food and healthcare is constant, regardless of the economic climate. These businesses are, in essence, indispensable. During any economic downturn, investing in a necessary service company might prove to be a reliable source of revenue.

5. Certificates of Deposit

Banks offer certificates of deposit as a way for investors to earn easy, low-risk money. Essentially, you lend the bank money for a certain period of time, and the bank pays you interest. At the end of the term, you also get back your principal. 

The interest rates on certificates of deposit tend to be lower than average market returns, but for the investor seeking a low-risk investment, certificates of deposit are a great place to start.

6. REITs, or Real Estate Investment Trusts

Consider investing in Real Estate Investment Trusts (REITs) if you’re keen to buy real estate but are hesitant to pay the high upfront costs. REITs operate in the same manner as mutual funds. They enable you to invest in a collection of assets managed by a single organisation. 

The management company purchases new real estate with investor funds. Investors can expect to receive their return in the form of regular dividends. Investing in REITs allows you to diversify your investment portfolio and reduce overall risk. Additionally, you have the option to invest in residential or commercial real estate.

7. Peer-to-Peer Lending

Peer-to-peer lending is a relatively new type of income producing asset. When someone wants to borrow money, you and other lenders act as a bank on a peer-to-peer basis. Just like with a bank loan, the borrower pays back the principal with interest. 

You might wonder why someone wouldn’t just go to a bank and borrow money directly. This could be due to several reasons. Often, the borrower may have a low credit score, making borrowing from banks highly costly.

It’s crucial to remember that peer-to-peer lending carries significant risk. This might be a fantastic choice if you’re willing to take on a lot of risk; otherwise, you might want to look at other options if you prefer more security. 

8. Bonds

Bonds are a fantastic income producing assets. Essentially, a bond is an IOU. It enables you to lend money to businesses, municipalities, and federal, state, and local governments. Bonds are somewhat comparable to CDs. 

They provide investors with much-needed stability amid uncertainty. Bonds also come with a guaranteed yield, which gives investors a consistent income.

9. Savings Accounts

A savings account is one of the most important income producing assets that everyone, regardless of age, should have. Even with the low interest rates of savings accounts, you can still earn a respectable amount. 

Furthermore, having a savings account will shield you from stock market fluctuations and other riskier investments like real estate. Interest rates on savings accounts can be as low as 1%. Consider options for an online savings account if you’re seeking higher interest rates.

10. Self-Storage Facilities

There has been a significant nationwide increase in self-storage units recently. Nationwide, there are currently up to 60,000 facilities and growing. For real estate investors, self-storage is a desirable investment option. It requires minimal money for both construction and maintenance. In fact, not many self-storage facilities need any employees at all. 

Tenants can access the building using a unique pin or key to gain entry to their units. Leases for self-storage units are month-to-month, and there is little emotional attachment involved. As a result, investors can benefit from any rent increases with each new lease.

Start generating revenue from your own assets now! As you can see, there are numerous ways to increase your income by utilising a variety of assets.

In conclusion, investing in income producing assets is a powerful strategy to build wealth and achieve financial freedom. By incorporating a variety of these assets into your portfolio, you can create a steady stream of income that supplements your salary and safeguards you from economic downturns. 

Remember, diversification is key! Don’t be afraid to explore different options based on your risk tolerance and financial goals. With careful planning and calculated investment, you can harness the power of income producing assets to turn your money into a well-oiled machine, working diligently to grow your wealth for years to come.