Early Retirees Earn Thousands of Dollars With These Passive Income Methods

I don’t know about you, but my social media feed is full of stories of people who retired at 40 or 50 and are living off passive income. They are often photographed in stunning locations around the world. It’s just a dream.

The reality is a little different. Early retirement is achievable, but it’s not that common—and it’s unlikely to be all about cocktails and luxury vacations. According to Gallup, only 2% of people between the ages of 40 and 49 retire. This figure rises to 11% for people aged 50 to 59 years.

If you want to stop working before you turn 65, creating sources of passive income will be critical. Here are three that can bring in thousands of dollars a month.

1. Make real estate work for you

If you own real estate, there are several ways to make it work for you, from renting out a room to getting people to pay to use your garage.

Rental income

Renting is a popular way to monetize housing for retirees. An analysis by the Boston College Center for Retirement Research found that rental income provided cash for about 1 in 10 households with at least one person over 65. Wall Street Journal.

The difficulty with rental properties is that they are not very passive. Passive income should bring in money without having to actively work. In contrast, property management and working with tenants can feel like a full-time job. If you go this route, hiring a property manager can minimize the time spent. Additionally, having a separate business bank account can make managing your money easier.

REIT

Real estate investment trusts (REITs) are much more affordable than owning real estate and require much less effort. REITs are companies that own and operate a collection of income-producing properties. These can be office buildings, shopping centers, hotels, data centers and much more.

Many REITs are listed on the stock exchange, so you can buy them through a brokerage account. The great thing about REITs is that they are required to pay out 90% of their income as dividends. This makes them a popular source of passive income.

2. Create a low-maintenance online business.

The idea of ​​starting a small business to fund early retirement may seem counterintuitive. But once you take the time to get things going, some businesses practically take off on their own. Especially if you can automate customer interactions and other tasks. Here are a couple of ideas.

Print on demand stores

The great thing about print on demand is that you don’t have to manage inventory or shipping. A few years ago, if you had an idea to make a funny T-shirt or poster, you would have to first pay to print and store it, and then sell it yourself. Technology has turned this on its head.

Now all you have to do is design your product – it could be a sweatshirt, mug, hat, book, tote bag or anything else. You can sell designs in your own store or on marketplaces like Amazon or Etsy. When a customer makes a purchase, your print-on-demand partner will produce and ship the product.

Customer engagement tools can help you control your sales and drive repeat business. Click here to know about the best CRM software.

Create an online course

If you have skills to share, creating an online course can be a great source of income. Please be aware that creating content and videos may take a significant amount of time. Research the topic, ask, and think about how you can best share your passion and expertise.

There are several online course platforms such as Udemy, Skillshare, and Teachable. Look for one that has the right price and features for you. Some of them have a wide student base. Others can help you more with course development and customer support.

3. Invest in dividend-paying stocks.

REITs aren’t the only investments that pay dividends: some companies pay them too. One way to fund early retirement is to reallocate assets toward dividend-paying stocks. Companies that pay dividends are often more stable, which may appeal to retirees.

The downside to dividend investing is that you won’t get the same investment returns as, say, growth stocks. Each has a place in your portfolio. The right mix of investments depends on your financial needs and goals.

Bottom line

Having multiple sources of passive income is one way to make your dream of early retirement a reality. Creating cash flows that will fund your non-work life takes planning and determination. But a combination of investment and a low-maintenance business can make it possible.