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Earn passive income from stocks

One of the best ways to put your money to work is to invest in dividend stocks.

These stocks pay out dividends to shareholders on a regular basis. Companies that pay dividends are typically big and well-established, with predictable revenues and earnings. Industries with a high proportion of dividend-paying companies include: finance, healthcare, utilities and energy.

The strategy for people who want to earn passive income from dividend stocks is simple, but powerful: Find stocks that pay strong dividends of at least 2% a year, let them sit and reinvest the regular payouts.

There are many ways to buy dividend stocks. Most likely, you'll want to purchase them through popular brokerage firms, but you can also buy stocks directly from a company. You can also invest via tax-friendly retirement accounts, like 401(k)s and IRAs.

Of course, not all dividend stocks are the same; some have a better track record of paying reliable — and ever-increasing — dividends. But if you get it right, your wealth could snowball without you having to lift a finger.

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Build your wealth with real estate

As a tangible asset that typically appreciates over time, real estate is one of the more popular investment classes for building wealth.

There are a few ways to make money off of it. You can generate cash flow by renting out your property. You can also build equity as you pay off your mortgage, which comes with many benefits.

If you want your real estate portfolio to grow beyond your home, you can invest in a residential real estate investment trust (REIT). REITs are publicly traded. They collect rent from tenants and pass that rent on to shareholders in the form of dividends.

Consider also using an online crowdfunding platform. These allow investors to pool their money together to buy property (or a share of property) as a group.

If you don’t want the pressure of making investment decisions yourself, investing apps and online platforms can help you invest in diversified real estate portfolios in ways that will seek to maximize your returns while keeping your fees low.

Go for gold

Many money mavens consider gold to be a wise investment because its purchasing power has remained relatively stable over time.

It is often lauded as a solid hedge against inflation — as explained by William Bevins, CFP, CTFA, in an interview with [CBS News] in 2023: “The worth of a dollar can be weakened by inflation, but gold provides you with an edge to combat that decrease in purchasing power.”

You can invest directly in gold by buying it in its physical form, either as bars, coins or jewelry.

Investing apps can also help you invest in the commodity by purchasing shares of gold mining companies on the stock market. For those looking for more diverse exposure, you can also invest in gold exchange-traded funds (ETFs).

You may also want to consider opening a gold IRA, an individual retirement account that allows you to invest in precious metals in physical forms, like coins, instead of stocks, mutual funds and other traditional investments.

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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.