4 ways to earn a monthly income by investing
Warren Buffett once said: “If you don’t find a way to make money while you sleep, you will work until you die.” This is why many investors look for ways to invest for monthly income. By making their money work for them, they can spend less time working and more time enjoying life.
Looking for ways to invest money and get monthly income? Besides stashing your money in a savings account, there are other ways to net higher returns.
Some investments generate returns on a long term basis (one year or more). This is fine for people who are financially stable and don’t need access to their money for a long period. But if you’re reading this article, you’re probably looking for investments that don’t require as much patience.
Investments that generate returns monthly come with the benefit of compounding interest (aka, interest on interest). Monthly earnings let you re-invest your interest for even higher returns.
How powerful is compounding interest? If you started with a penny and managed to double your net worth daily you would become a millionaire in only 28 days.
4 ways you can invest for monthly income
There are a wide variety of investments that can generate returns. However, only a few investments do so monthly. If you’re looking to invest for monthly income, here are four options you should look into.
Investing in real estate is one of the best ways to invest money and earn monthly.
One of the oldest tricks in the investment playbook is buying a cheap house/apartment and renting it out for a monthly rate. Additionally, the price of real estate tends to rise over time. This gives you the option of selling your real estate property for a large sum of money.
Keep in mind, however, that in the beginning, your income from rent will usually go towards paying off a mortgage.
Real estate investment trusts (REIT’s)
The issue with real estate is that it requires a large amount of upfront capital. If you don’t have a lot of cash on hand, you can look into alternative options such as Real Estate Investment Trusts (REITs). REIT’s are another way for investors to invest money and get monthly returns, without the need for upfront capital.
Let’s say you only have $10,000 in cash. A piece of property is selling for $100,000. Instead of purchasing the property yourself, you invest that $10,000 into a REIT, which can afford to buy the property. In exchange, they rent out the property and give you a percentage of return equal to the amount you invested.
Certificates of Deposit, also known as CD’s, are another way to invest for monthly income.
Government institutions issue them to raise money for financial projects. To make things simple, think of them as an I.O.U note.
Holding a CD allows the investor (you) to collect interest payments from borrowers (usually banks). CDs have a maturity date assigned to them — once this date passes, the lender returns the principal amount owed and terminates the I.O.U contract. CD’s are generally short-term (1-5 years) with average interest rates around .47%.
CD laddering is a common investment strategy where you take a sum of money, divide it up into equal amounts, and invest it into CDs with varying maturity dates.
For example, let’s say you had $10,000 to invest. Start by dividing that $10,000 into 4 equal amounts of $2,500. From there, you would invest it into CD’s with differing maturity dates:
- $2,500 in a one year CD
- $2,500 in a two year CD
- $2,500 in a three year CD
- $2,500 in a four year CD
As each CD reaches maturity, you then renew it for a duration of your choice. Using this strategy allows you to avoid paying fees, provides them with steady cash flow, and decreases reinvestment risk.
Peer to Peer Lending
Peer-to-peer (P2P) Lending involves borrowing money directly from other people through online platforms — removing the financial institution as the middleman. In exchange, the lender receives interest payments consistently.
However, not all P2P lending platforms offer monthly returns — many loans require multiple years before you see an ROI. If you’re looking to P2P lending for consistent monthly income, make sure the platform you use immediately reinvests your money and doesn’t leave it idle.
Platforms such as MyConstant, for example, allow you to loan your money for 1 month at 6% APR. When your term ends, you can immediately choose to reinvest or leave your funds on the platform in our instant access account. Here, your money earns 4% APY when not on loan or waiting for a match. That way, your money has no downtime and the earning potential is maximized.
Earn up to 7% APR every month by investing with MyConstant today
To invest for a consistent monthly income, you need capital. The higher the return on investment, the more capital you need. With P2P lending on MyConstant however, you can invest money and get monthly returns with as little as $50.
Other P2P platforms don’t back up loans with crypto collateral — we do. As a result, there’s minimal risk of losing your investment if a borrower defaults.
Come check us out and see how you could be earning up to 7% APR today.
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