In the past couple of years, more people than any other time in recent memory have faced unemployment, underemployment, or a loss of income. Getting a second job helps, but they sometimes aren’t a viable option. It’s important for everyone to have one or more streams of additional income. This extra money can help people survive tough economic times with less pain and less hardship.
Dividend Investing
There are many ways to earn a passive income just by purchasing stocks and bonds. Many stocks offer dividends to their shareholders, where they pay investors shareholders, usually between 2% and 5% of the stock price, annually to reward them for owning the stock. Although most investors buy stocks for their capital gains today, dividends used to be how investors profited off stocks. Some blue-chip companies allow investors to automatically reinvest their dividends into more shares, even fractions of shares.
Investors can also buy fixed income investments to gain passive income. An example would be US Treasury Bonds. Fixed Income is considered the most conservative category for investing. While most bonds only pay a few percentage points of interest, they can give investors a steady income during tough times.
The trouble with fixed income, and to a certain extent, stocks, is the initial costs. Buying enough bonds and stocks to provide a significant amount of money means a large investment to start with. Bonds also tie up investors money for a long time as many don’t fully mature for a couple of years. Stocks are easier to sell than bonds, but pose the additional risk of the stock’s price falling. This is why it’s important to establish dividend investments before tough economic times. Otherwise, it may be too late.
eBay
Everyone has junk lying around the house that they don’t want. A good way to make money, and to clean up the house, is to sell the stuff on eBay. eBay is the best online auction site in the world for anyone to sell their unwanted stuff. It’s free to join, contains the most bidders, and only costs a small fee to list an item. The site also allows sellers to list item just for sale if they don’t want to risk an auction. While the site originally faced criticism as a purveyor of junk, the site has gained respect in recent years. Even insignificant items can bring in large amounts of money if two collectors keep bidding the item higher. The budding entrepreneur can use this eBay experience to convince friends to let him auction off their stuff, taking a commission off the final selling price. Not only does this establish an alternate income stream, but it could also be the start of a new business.
Online Writing
Writing articles online is a great way for people who need money to make money. Granted, this isn’t passive income; it takes work. Writers usually have to write many articles to start making a noticeable amount of money. There are a few different ways writers can make money on the internet. The first way is by submitting articles to content sites, like the one this article is located on. These sites host articles and pay the writers revenue from the ads located aside those articles. They also allow writers to try and sell articles to publishers who post requests for articles. Some of these sites are Helium (this site), Associated Content, and Constant Content. The second way is to work as a pure freelancer, writing articles for people requesting them. Writers on these sites can make more money than on the content sites, but may have to do more work. Most freelancers have their own websites and a list of people they work with, while other use sites Elance. The last way involves writers making their own websites or blogs to host their articles. They place ads on these sites and either collect the ad revenue or sell the site for profit. This involves the most work but offers the highest reward.
These are just a few of the many ways to generate alternate streams of income. People also gain money from renting out property, buying and selling websites, or selling homemade crafts on sites like Etsy. The key to maintain some income during tough times is to prepare and set up these income streams during good times, before the storm. Only with careful preparation can alternate streams of income provide a safety net during a recession.