The best investment with a monthly return (7 monthly income investments)
Whether you are looking for ways to double your monthly salary or aiming to build a retirement nest, there are many ways you can invest your money with a steady monthly return, especially when it comes to passive investing. There are many different approaches to creating passive income, some requiring a fortune to get started, and others requiring little with more commitment. Let’s take a deeper look at some of the most effective ways to invest your money with a monthly return.
The best investment methods with a monthly return
This monthly income stream is considered to be the most reliable and effective one on this list. All you have to do is own a property or pay off a mortgage along with the money you earn. Remember that your income can be affected by maintenance costs and unexpected bills such as roof repairs or partitions.
The housing scene is constantly encouraging young people to choose to rent rather than indulge in buying a property themselves, especially in densely populated areas where there will always be people looking to pay to live in your homes or apartments.
Even if you are required to pay off a mortgage on a monthly basis, in many cases the total rent you receive will cover the said costs, which will allow you to generate a good passive income. When the mortgage is paid off in full, you will be able to control the entire amount and harness it for your personal purposes.
2- Stocks, bonds and exchange traded funds
The second investment methods with a monthly return are stocks, bonds, and ETFs. ETFs are one of the most straightforward when it comes to providing investors with passive income on a regular basis. On the other hand, stocks are a reliable source of continuous income on a monthly basis and can be traded on various trading platforms. As for bonds, they are investments that can be added to investors’ portfolios and are a form of contract between the issuer and the investor, and the lender usually receives interest with his investments on a regular basis.
When it comes to looking for value investments, you should choose stocks that are capable of delivering dividends even when the possibility of a recession becomes a reality. You can see which stocks have historically remained strong during tough times, or which did well during the 2008 financial crisis.
If you are not comfortable investing in the stock market, it may be a good idea to tap into the expertise of a financial advisor to get some advice and guidance. There are several platforms that allow you to do this, such as Robinhood and TD Ameritrade.
3- See the new cash flows
Third in the list of investment methods with a monthly return, the new cash flows. Sometimes, it may be possible to generate monthly revenue streams from skills you have already acquired. If you’re an expert in a niche, you can invest in standalone websites and some hardware to create your own courses and then direct them to students who want to educate themselves about the same field.
When it comes to building services that don’t involve direct interventions like creating an online course, it’s possible to make money passively, as you’ll see money transferred into your account whenever someone makes a purchase. For services that require you to take a more active role such as designing backpacks or sewing clothes, you can check out user-generated hobby sites such as Etsy, which allow you to sell your creations online to generate new income.
If you feel comfortable sharing your knowledge and skills face-to-face, platforms like Chegg and Tutor.com can help you reach students of all ages online. This is a very rewarding idea, as it does not require any initial investment to get started.
4- Sharing assets
You can invest your money with a monthly return by sharing assets. It is not difficult to earn a few hundred or even thousands of dollars by immersing yourself in this field. Airbnb is one of the most prominent examples of asset sharing, but today it is possible to share any high value assets or equipment such as cars, bikes, and photography equipment to get a regular income stream.
The main reason that may attract investors towards this investment approach is that the money can be invested directly in assets that attract the respective individual. As an investor, you probably enjoy photography in your spare time. By sharing assets, you can purchase valuable equipment that you might need to do so, and then generate income from it when it’s not in use.
Likewise, if you’ve always dreamed of owning your own holiday home in Spain, why not buy that Andalusian villa you’ve been looking for and instantly turn it into a profitable Airbnb asset.
5- High-yield savings accounts
One of the most reliable ways to invest your money is through high-yield savings accounts online. This method of investing does not require making large purchases in advance and you will not have to lose liquidity while increasing income. While most banks offer savings accounts, the value of interest rates offered by online banks may allow greater levels of income.
You can also invest in an automated money platform as another option when it comes to high-yield savings accounts. Apps like Moneybox allow users to take their surplus and automatically invest it in a savings account. This can generate a significant monthly income for those who are able to invest initial sums as well as their surplus.
6- P2P lending
You can invest your money at a monthly return via P2P lending, which is when people offer to lend money to someone who needs it to either start a business, consolidate their debts, or pay for their medical care. This type of investment is a great way to contribute to society and give people the opportunity to pursue their dreams or build a new life that comes with the potential for great earnings.
P2P lending typically comes with above-average rates of return on your initial investment, and lenders can expect to earn more interest than traditional bank loans.
Of course, this type of investment comes with a degree of risk, as borrowers can find themselves unable to keep up with repayments. However, many P2P lending platforms come with a strong level of scrutiny to ensure investors’ rights.
The reason why P2P lending is such an effective way to earn monthly income is that there is plenty of room for lenders to reinvest their earnings to increase the level of money they receive on a monthly basis.
Lending platforms allow investors to open accounts with as little as a dollar as an initial deposit, and they can receive monthly installment payments where borrowers repay the loans they receive at a predetermined interest rate. This gives investors an opportunity to either reinvest their earnings into new endeavors or simply enjoy an additional monthly revenue stream.
7- Real estate crowdfunding
Finally in the list of ways to invest with a monthly return, real estate crowdfunding. Real estate crowdfunding doesn’t cost as much as you might think, and you can get started with as little as $500 on crowdfunding sites like Fundrise and RealtyShare, which provide investors with a solid monthly income. But it bears repeating that they operate as private funds rather than public equities. This means that you cannot liquidate any investments you make and access your money easily.
Any investments you make can be restricted to any time period between six months and five years. But despite this, you are still likely to receive payments on a monthly or quarterly basis, depending on the type of investment opportunity you choose.
Monthly income chart
Typically designed for conservative, risk-averse investors and retirees, the Monthly Income Plan is an investment option that primarily stores money in low-risk securities. It serves as a stable source of income for those individuals who wish to establish an alternative source of monthly income, often in the form of interest and dividends.
What are the monthly income plans?
The monthly income plan approach is mainly debt oriented as more than 70%-80% of its fund goes into debt funds, while the rest goes into stock options. This is done with the aim of earning steady returns and capitalizing on the investment whenever possible through equity exposure.
What are the main features and benefits of monthly income plans?
The following features and benefits make the monthly income plans a good investment choice for risk-averse investors:
Unlimited: This system is flexible and does not come with any upper limit for its investment amount, it allows investors to invest in the scheme according to their ability and requirements.
Open Option: Individuals here do not have to pay any processing fee as a burden to get into the system. Additionally, this option comes with an exit burden of less than 1% of the total investment.
Liquidity: Monthly income plans are more liquid when compared to most other schemes. Since there is no lock-up period applied to the investment, investors can choose to withdraw their funds to meet any unforeseen contingencies.
Better returns: The profits made through monthly income plans are better than those of fixed deposits Traditional post office monthly income system.
Guaranteed Income: Investors are guaranteed to make returns every month, although the amount varies according to the financial market.
Less Risk: Monthly income plans are usually less risky than other investments. This is because the money is invested in lower risk securities such as blue chips, fixed income instruments and dividend stocks.
PROFESSIONALLY MANAGED: The monthly income plans program is run by professional fund managers who are equipped to better understand the performance of the investment market. They not only monitor the schemes, but also decide “when, how and how much” when it comes to funneling money into debt and equity.
What are the types of monthly income plans?
There are two investment options that can be categorized as the best monthly income schemes:
Dividend Oriented Monthly Investment Plan: Dividends generated from these plans are not taxed, rather these dividends are paid out of the distributable surplus by AMC and paid when the said fund earns a profit from the market.
Growth Oriented Monthly Income Plan: With this plan, the profits accumulated on the capital are added to the invested amount, facilitating wealth creation along with growth.
What is the tax impact of monthly income plans?
Being a debt-oriented mutual fund, the monthly income scheme is taxable.
In the case of short-term capital gains (STCG), if individuals decide to dispose of the units they held 3 years ago, the accumulated gains will be added to their income. The total will then be taxed according to their respective income slabs.
If individuals decide to liquidate their investment after 3 years, the Long Term Capital Gain (LTCG) will incur tax at the rate of 20%.
Who should invest in a monthly income plan?
The perfect combination of risk and reward makes the monthly income plan a good investment option for retirees who have a limited fixed source of income. Besides providing them with a source of income each month, such a scheme would help retirees plan against any sudden expenses. In addition, investors who are risk averse and tend to have a conservative view of investments can put their money into the monthly investment scheme.
Things to consider before investing in monthly income schemes.
Before investing in a monthly income scheme, individuals should consider some factors:
- Short and long term financial goals they want to achieve
- Investment time horizon
- Payment options for this specific scheme
- Risk appetite and current financial situation
- their current lifestyle and suitability
Individuals should also consider market conditions before investing in said schemes. A higher interest rate leads to a lower net asset value, which is why most seasoned investors tend to invest in a monthly income scheme when the interest rate is high.
Since there are so many monthly income plans in the market these days, you have to take extra care before choosing a particular type of plan. You can do a thorough research on the best monthly income planner in 2022 and compare their range, offerings and performance. In doing so, you will be able to understand what type of scheme is best for you and how you can get the most out of it.
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