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It can be confusing and overwhelming to figure it out on your own, but dont worry.
Dividend-Paying Stocks
Dividend-paying stocks remain the gold standard of passive income investing.
These stocks offer regular payouts to shareholders, meaning you have a steady income stream.
Mary Tung, founder and CEO ofLido.app, mentioned a few specific funds to consider.
They have low expense ratios and high levels of asset class diversification.
you’ve got the option to also consider ETFs.
Like index fund investments, ETFs have the same structure but behave as stocks.
They also have the same low-cost and diversified benefits, Tung said.
First off, any excess cash should be placed in a money market account.
Most are yielding around 5% at a time when CPI is now back down towards 2.9%.
That yield differential is a no brainer, said Anthony DeLuca, CFP, an expert contributor atRetireGuide.
Kullberg also liked this idea.
Peer-to-Peer Lending
Peer-to-peer lending platforms offer an innovative way to earn passive income.
Mendenhall said these platforms provide lower-risk avenues for earning interest on your money with minimal effort.
How it works is pretty simple, too.
Rental properties have been a reliable source of passive income, Tung said.
You purchase a house, put tenants in, and in return, they pay you every month.
However, she did offer a word of caution.
This strategy comes withsome initial cash outlay and effortin terms of management of tenants and repairs, she said.
That being said, the payouts can be worth it in some cases.
Returns can be quite significant due to capital appreciation in property over time, she said.
Once the digital products are made, they can be sold over and over with marginal effort after that.
Annie Cole, founder ofMoney Essentials for Women, recommended leveraging your expertise.
Offer freelance or gig work in your area of expertise, she said.
If you’re free to, do it all.
All of these can provide regular income streams, shared Tom Buckingham, chief growth officer atNassau Financial Group.
In anticipation of this transition, I would consider laddering your investments.
Caitlyn Moorheadcontributed to the reporting for this article.
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