These days, people no longer view retirement as a definite point in time when a person who was working full-time stops working. There is a new perception that is more personalized, gradual, and involves a flexible way of transitioning into retirement. During this process, people look for ways to generate passive income to supplement their main source of income as they prepare for early retirement. This means that they continue to generate passive income, even after retiring. Here are five passive income ideas retirees can explore.
One of the best passive income ideas is to own a rental property. This investment option can bring a tidy sum of money every month while involving very little work. However, the rental property requires a huge initial investment, and the money collected is not pre-profit as it will go to covering expenses such as maintenance, insurance, property tax, and property management fees.
In case you do not want to deal with some of the challenges that come with owning property, you can choose to invest in Real Estate Investment Trust, commonly known as REIT. REITs own multiple properties and allow individuals to invest in and earn from the portfolio.
If you do not have a lot of money, you can also rent out extra space in your home. Today, you can use online marketplaces that make it easy to rent out space.
Investing in Dividend Stocks
Another great way to generate passive income is to invest in dividend stocks. This means that you will be a shareholder in the company and will receive cash dividends based on the performance and profits of the company. The more shares you own, the higher the payout amount you will receive at every interval.
In case you are risk-averse, you can consider putting money in a savings account. You will simply need to put your money in a savings account in a bank or an online financial site that offers high yields. Once you do this, you can sit back and watch as your money earns interest.
This is one of the newer passive income ideas. It is a new way to invest money, especially if you are looking for immediate income. Peer-to-peer lending allows you to lend money to those who need it through lending cooperatives. Although the risk involved is higher than other options, you are likely to reap higher rewards. Compared to other sources of passive income, you will also get a return on your investment more quickly.
Advertise on Your Car
One of the most creative passive income ideas is to place removable advertisements on your vehicle. This means that you will be making money as you drive around. The good news is that you can work with a specialized advertising agency to land a deal, and the ads will be placed on the car at no cost to you.
Invest in a Business
If you want to own a business but do not want to do the work associated with building one, you can choose to invest in someone else's business. While it is a high-risk venture, it can be highly rewarding. When you are not involved in the day to day running of the business, it could either fail or be acquired for a larger sum of money. A good way to reduce your risk would be to invest smaller amounts of money in different businesses.
Retirees have many opportunities to earn extra money with minimal effort. In addition to those outlined above, you can use cashback apps, credit card rewards, and writing a book. However, to ensure you collect enough to get by and are financially secure, you should start planning for your retirement early enough.