Everyone dreams and craves for financial stability and security, but things happen in life where you become short of money. This is the reason why so many more people choose to take out a loan with a guarantor, so they at least have some money to keep them going.
When you take out a loan with a guarantor, it’s good to look for other means of income-earning opportunities so you can repay the loan quicker. The best one that you could consider is to make your money work for you so that you just earn passive income but knowing where to start can be a little bit tricky. The most important thing to do is to never rush into it. You need to be sure that you’re making the right decision as it will ultimately determine how much quicker you can pay back your guarantor loan. So, let’s take a look at the different types of passive income you could look into.
Bank Interest
The simplest way you could earn passive income is for you to put a chunk of your income to your bank account for it to earn interest yearly. This is easy to do as you would only set aside a certain percentage of your monthly income and immediately put it in a savings account dedicated primarily for your savings or retirement.
Even though this is the easiest and simplest investment you could do with your hard-earned money, it is also the slowest and could even generate just a very tiny to no value at all to your money after you have considered all of the economic factors like the annual inflation rate.
Most banks and financial institutions only give roughly 2-2.5% of interest for savings accounts, and you have to consider the yearly inflation rate to be approximately 2% or a bit lower. You would be lucky enough to get an interest rate higher than the inflation rate and earn a bit of value to your money, but you cannot withdraw from your account so that you get a steady passive income each month.
Property Investments
If you want an investment with a high yield, then you can opt to invest in a property. For a steady flow of monthly passive income, you could buy a room, apartment, house, or condominium that you could fix up and rent out. But with this kind of investment, you have to be ready to have enough savings for you to be able to purchase it or get a house loan and charge a monthly rate enough for you to make the monthly repayments and still have earnings.
You also have to understand that with a property investment; you would need a couple of months to fix it up to attract interested lessees, screen who the most trustworthy one is, and of course draft all of the legalities involved.
Of course, it is not always smooth sailing even if you are already starting to earn a passive income because there would still be certain cases wherein you would need to pay for repairs and maintenance, look for new tenants, and so much more.
High Dividend Stocks
When you build a good portfolio of high dividend stocks, you can create a passive income at an annual rate which is a lot higher than what you’d get on return from a bank investment. Even better, because high dividend stocks are stocks, there’s the potential for capital appreciation. This way, you’ll be able to earn a passive income from two different sources.
Use Airbnb to Rent Out an Unused Space
Airbnb is still considered pretty new but has become incredibly popular across the globe. It allows people to go travelling and stay in accommodations that are far less expensive than staying in hotels.
By using Airbnb, you could earn a passive income by renting out part of your home that you no longer or have never used. How much money you can make ultimately depends on the size, location, and condition of the space you want to rent out.
Get Started Today
So, there you go. As you can see, there’s a few different ways you can earn a passive income in order to pay of a guarantor loan quicker. The options we’ve discussed will depend on your preferences, but one thing is for sure, passive income is a no brainer if you’re looking to essentially earn money with your eyes closed.