Whether you’re looking for ways to supplement your monthly paycheck, or are aiming to build a nest egg for retirement, there are plenty of ways in which you can invest your money and gain yourself a consistent monthly income.
One of the most effective ways of gaining a monthly income is by investing in methods that will passively payout on a regular basis. There are various different approaches to creating passive incomes, with some requiring a significant amount of personal wealth to start with and others needing more regular levels of commitment.
For whatever reason why you’re aiming to maximise your earning potential through monthly income sources, there are some great approaches that can leave investors with recurring passive earnings. So, let’s take a deeper look at 7 of the most effective ways of investing your way to a steady income each month:
1. Boost Your Earnings With Rental Income
The first option on this list is perhaps the most reliable and efficient monthly income you can set yourself up with. The major caveat here is that you’re either required to own property or pay off a mortgage alongside the money you make.
Another small caveat is that your income can be impacted by maintenance costs and potentially significant unforeseen bills in, say, the property’s refrigerator breaks or ceilings start to leak.
However, there are very few more effective and sustainable ways of making money out there than through renting out property. The housing landscape continually encourages younger people to opt for renting as opposed to taking the plunge of buying a property themselves, and in populous areas, there will be no shortage of inhabitants looking to pay to live in your homes or apartments.
(Image: CB Residential)
As the chart above illustrates, recent years have seen a surge in landlord demand in the UK, and with the arrival of a Covid-enforced recession looming alongside Brexit, residents are more likely to wait longer before they buy a mortgage of their own – presenting a great opportunity for investors to purchase their own property specifically to rent out.
Even if you’re required to pay off a mortgage on a monthly basis, in many cases the total you receive in rent will cover said costs, allowing for a credible short term income. Eventually, when the mortgage is paid off entirely, you could be looking at a significant level of passive income from tenants on a monthly basis.
2. Stocks, Bonds & ETFs
Exchange-traded Funds (ETFs) can pay all kinds of dividends and stand as some of the most straightforward ways of setting investors up with a form of passive income on a regular basis. Although dividends are typically paid on a quarterly basis instead of monthly, there aren’t many more effective ways of gaining a consistent income.
Elsewhere, stocks are another reliable source of continual income on a monthly basis and are capable of being traded on various exchange platforms – offering equity ownership of businesses for investors.
Bonds are investments that can be added to investor portfolios and they act like a form of contract between the issuer and the investor. The lender will typically receive interest back with their investment on a regular basis.
ETFs are publicly traded on stock exchanges and they represent a series of securities that track an underlying index. They’ve grown to become popular among investors who aim to seek out diversified portfolios within a specific industry – like healthcare or emerging technologies.
When it comes to seeking out value investments, it’s worth choosing stocks that are capable of offering up dividends even as the prospect of a Covid-enforced recession becomes a reality. Choosing the right stocks amid an economic downturn may require a little bit of homework, and it’s worth looking into stocks that historically stand strong during difficult times in financial landscapes. Checking out which stocks performed well during the financial crisis of 2008 could be a good indicator of where the value lies moving into the challenging new decade. If you’re not comfortable with stock market investing, it could be worth consulting a financial advisor who can guide the way using experience and fresh insight.
3. Explore New Cash Streams
Sometimes it’s possible to generate monthly revenue streams through doing the things you do best. If you’re an expert in a niche industry, it could be worth investing in freelance websites and some hardware to create your very own online educational course to teach willing students how to build their own fintech app, or how to create magazines on InDesign, or how to reach their dogs to jump through hoops – anything.
Platforms like Fiverr and Upwork offer potential freelancers an array of fresh revenue streams to explore in exchange for their know-how or knacks. When it comes to building services that involve no direct interventions – like an online course – it’s possible to make money passively, where you’ll see money transfer into your account whenever somebody makes a purchase.
Likewise, you could sell your hobbies and creativity. Perhaps you like knitting cuddly toys, or designing beautiful backpacks. User-created hobby sites like Etsy allows you to sell your creations online to generate an enjoyable new income.
If you don’t mind investing your knowledge into face-to-face tutoring, platforms like Chegg and Tutor.com can help you to teach students of all ages online – a thoroughly rewarding profession that requires very little prior financial investment but for some educational materials and screen sharing software.
4. Enter The Sharing Community
It isn’t difficult to earn an extra few hundreds or even thousands of pounds each month by dipping into the sharing economy. One of the most notable examples of modern sharing comes in the form of Airbnb, but today it’s possible to share just about any high-value asset or equipment for a regular income stream.
It’s possible to rent out your car on Turo and instead cycle to work or rent out an expensive camera and filming equipment that isn’t set to be in use for the foreseeable future on Cameralends. Other platforms like Spinlister aids users in renting out their bicycles and you can even let out your sailing boat on Sailo.
The reason that this approach to investing your way to a regular monthly income is so appealing to investors is that money can be put directly into assets that are appealing to the individual in question. As an investor, perhaps you would like to become a photographer in your spare time. By tapping into the sharing economy, you can buy the valuable equipment that you desire and use it to help you make a return on your investment when it’s not in use.
Likewise, if you’ve always dreamed of owning your own holiday home in Spain, why not buy that Andalusian villa you’re looking at and immediately start to turn it into a profitable asset on Airbnb for the 10 months per year where neither yourself nor your family will be staying there?
In some cases, the assets that you invest in will steadily appreciate, too. This is especially true for property, but may also be the case for rarer niche equipment and vehicles.
5. Open a High-Yield Savings Account
One of the most reliable ways of investing your money is through high-yield online savings accounts. This investment method doesn’t require making large purchases beforehand and you don’t have to lose your liquidity while growing building an income.
While most banks offer savings accounts, the value of interest rates offered by online banks – as opposed to their brick and mortar counterparts can leverage significant levels of income.
The example above illustrates just how much money can be saved over a ten year period as opposed to more traditional savings accounts. With online institutions like CIT bank, customers can see as much as a 1.55% return on their savings – a significant figure if you’re able to open up an account with a larger initial sum.
Another option when it comes to high-yield savings accounts comes in the form of investing in an automated moneybox platform. Apps like Moneybox allows users to take their spare change and have it automatically rounded up and invested into a savings account where investment experts pick appreciating stocks to put the money into. Similarly, this can yield a considerable monthly income for those who are able to invest larger initial sums to accompany their spare change.
6. P2P Lending
If you would rather look to make money while investing in good causes, it may be worth your while becoming part of the Lending Club, and other P2P lending platforms. P2P lending is when individuals offer to cut out the middlemen and offer to lend individuals the money they need to either start a business or consolidate their debt or pay for their medical care. Essentially, this form of investment is a great way of contributing to society and offering people the chance to follow their dreams or build a new life comes with great earning potential.
P2P lending typically comes with higher-than-average return rates on your initial investment, and lenders can expect to earn more interest than traditional bank loans.
Of course, this form of investment comes with a degree of risk. Borrowers could, of course, find themselves unable to keep up with repayments, however, many P2P lending platforms come with a strong level of vetting to ensure that investors aren’t left empty-handed.
(Image: Daily Fintech)
The reason why P2P lending is such an effective way of earning a monthly income is because there’s plenty of room for lenders to reinvest their earnings to snowball the level of money that they receive on a monthly basis.
Lending platforms allow investors to open accounts for as little as 1p as an initial deposit. From there on in they can build their own portfolio by investing in various loans in increments of as little as £20 – or more if an appealing opportunity arises.
Lenders can receive monthly repayments as borrowers repay the loans they receive at a pre-determined interest rate. This gives investors the chance to either reinvest their earnings into new endeavours or simply enjoy an added monthly revenue stream.
7. Crowdfund Real-Estate
It doesn’t cost as much as you think to crowdfund real estate. With as little as £500 it’s possible to start saving in appreciating real estate assets via starter portfolios from crowdfunding sites like Fundrise. These platforms help investors to take advantage of a real estate investment trust that provides users with more flexibility and healthy returns. Performance reports show that annual returns of 12.25% are possible on the initial sum invested.
Alongside Fundrise, another notable crowdfunding real estate platform that could provide investors with a strong monthly income is RealtyShare. Significantly, RealtyShare requires a minimum investment of $5,000 dollars. However, for larger initial fees, investors are offered a greater level of control of the properties that can be invested in – rather than relying on the performance of the portfolio as a whole, as is the case for cheaper real estate crowdfunders.
Of course, there are more options out there, but in the case of both Fundrise and RealtyShare, it’s worth remembering that both act as private funds rather than public stocks. This means that it’s not possible to easily liquidate any investments that you make and subsequently access your cash.
Any investments that you make can be tied up for just about any period of time between six months and five years. But despite this, it’s still likely that you’ll receive payments on a monthly or quarterly basis – depending on the type of investment opportunity you choose.
When it comes to investing your way to a steady monthly income, it’s important to remember that your investments can always go down as well as up. There are plenty of ways in which you could invest your way to significant monthly profits in forex and cryptocurrency trading, but the sheer volatility of the associated markets coupled with economic uncertainties brought on by an upcoming Covid-enforced recession means that investors are unlikely to see a reliable monthly income.
Although this guide avoids the most volatile markets to invest in, it’s important to conduct a sufficient level of research and analysis before you decide to part with your money. Investing in individuals in the form of P2P loans, materials to create educational courses or property to let out to renters can leverage a monthly income of hundreds or thousands of pounds. But fools rush in where angels fear to tread. Spend enough time researching your chosen investment for long enough to gain a confidence that your money will be safe.
Whether you’re building a nest egg for the future or looking to create an additional revenue stream through a monthly passive income, smart investments can thoroughly reward investors for the time they’re willing to put into an endeavour with a healthy revenue stream that can help them to achieve their goals.