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6 Income Producing Assets to Invest In

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    Most people dream of building a nest egg for themselves for the future. You might want to get to a point in your life where you don’t have to worry about every bill and how you’ll pay it. 

    Of course, the way to build wealth is to have a plan. It often isn’t as simple as socking money away in a savings account. 

    Sure, that’s smart too. But you want your money to work for you to produce more income. So, what wealth management strategies do you need to follow to grow your money?

    Whether you’re interested in having more income for your current lifestyle or building wealth for the future, follow these investing tips to produce more income producing assets for yourself. 

    Income Producing Assets

    What are Income Producing Assets?

    Sure, when you go to work, you get a paycheck. But if you want to really build wealth, then you need to find some income-producing assets.

    Income producing assets are assets that you put money into and if they work correctly they produce income back for you. The goal of income producing assets is that once you put some money into the asset, it makes you income in return.

    You could garner income from it in the present so you have more cash flow. You could also invest the money and give it time to increase in value so you have the asset in the future. 

    1. Money Market Accounts

    You might already have a checking and savings account at your local bank. A money market account is similar to a bank savings account.

    It allows you to safely put large chunks of money away in an account, yet still have access to it if you need it. Some money market accounts allow you to write checks from them or the bank may even provide a debit card to use from the account. 

    So, why choose a money market account over a regular savings account? Often a money market account will offer a little better interest rate for earnings.

    Because they often restrict how many transactions you can have from them in a month, the money can stay put and get higher earnings.

    Up to $250,000 is insured and protected by the Federal Deposit Insurance Corp. at banks and the National Credit Union Administration at credit unions.

    2. Dividend-Paying Stocks 

    Many people know about investing in stocks through the stock market. Stocks can earn money when the company grows in value. 

    Most companies will have two types of stock for purchase, common and preferred.

    If you purchase preferred stocks, which usually cost more, the company will in return give you some perks like you might get a higher percentage of a dividend or you might be allowed to purchase stock options before a common stockholder. 

    There are many companies that also pay regular dividends to their stockholders. Dividend-paying stocks tend to be safer options and they produce assets regularly.

    3. Mutual Funds

    There are many different kinds of mutual funds for investors to consider giving you a plethora of options here. A mutual fund is when investors put money into the fund, pool their resources with other investors so the fund can buy stocks and other assets. 

    Mutual funds are nice because you can put money and get it back out by just selling your shares, in most cases. As the mutual fund invests in stocks and assets, the goal is that the funds grow to produce income for you. 

    Many mutual funds allow you to invest with minimal amounts of money to get started too.

    4. Real Estate Investment Trust

    A real estate investment trust or REIT is like a mutual fund except specifically for real estate. 

    Maybe you want to invest in real estate but either don’t have enough funds to buy yourself or you don’t want the hassles of sole ownership.

    A REIT takes money from many investors, pools that money, and invests in real estate that is income-producing. In return, the investors who put money into the REIT, share the income produced from the real estate. 

    One issue with just investing in real estate is that it isn’t a very liquid asset. It does, however, offer capital appreciation. 

    A REIT is a truly liquid asset. You can sell your shares in the REIT like you would with a stock or a mutual fund. The trade-off to this liquidity is that you don’t get the capital appreciation that comes from owning real estate outright. 

    5. Rental Property

    If you want to actually own your own property, one asset producing idea is to purchase a home or apartment that you can in turn rent out to someone else. 

    It does require you to have the capital to buy the property, but once it’s rented it can produce a regular stream of income. 

    This kind of income-producing asset is much less passive than some other options you might choose. It can be lucrative though if you get the right tenant in the property.

    6. Storage Spaces

    A little different type of real estate investment is to invest in self-storage units. The industry is exploding across the country.  Every town has self-storage units where people can rent a space, big or small, to store belongings for a monthly fee. 

    It’s very passive real estate investing because typically the self-storage facility requires minimal maintenance and upkeep and produces a regular revenue stream. 

    Wealth Management Ideas to Build Your Personal Wealth

    If you’re looking for wealth management advice, we can help. Whether you’re in McClean, VA or Greater Houston, TX, we have financial advisors to help you find the right kind of investment for your needs. 

    Contact us today to get started discussing which asset producing investment is right for you.

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