4 Low-Cost Income Producing Assets That Generate Passive Income which Anyone Can Do

The best way to accumulate wealth in your 20s is to buy assets and avoid liabilities. An asset is anything that tends to increase in value over time or pays you money simply for owning it. Some examples are real estate, stocks, royalties, bonds, websites, and businesses. Assets have been a way for the wealthy to create and preserve their wealth for generations, and they are the number one way to generate multiple streams of passive income. When you spend one dollar on a liability, that dollar is gone forever. But when you spend one dollar acquiring an asset, that asset becomes the employee that works relentlessly to earn money for you. These assets sometimes require a lot of upfront capital which college students and young adults may not have starting off. Thankfully, due to the technological age we are living in, the financial barrier to access income-generating assets has been lowered. I have put together a list of low-cost income-producing assets that are proven to generate serious cash flow and will catapult you on your journey towards financial freedom.

Asset #1: Rental Property

Due to the lack of capital to purchase rental properties, the real estate market is often off-limits to those that have just graduated from high school or college and are early in their careers. However, digital platforms such as Airbnb are opening doors for young adults to make residual income from an extra room in their apartments or sofa space. This is most commonly known as house hacking — using the house you already live in to generate income. Since housing is likely going to be your biggest monthly expense, if you can figure out ways to reduce those costs, you can dramatically increase your ability to save and speed up your path towards financial independence.

Here’s a podcast episode about two recent college graduates that got started in real estate by House Hacking:

Asset #2: Micro-investing

Millennial investors face challenges such as how to invest small balances and not pay fees that are higher than the returns their savings can generate. Another barrier cited in a Bankrate survey revealed that 53% of Millennials responded that lack of money is the major factor for not investing. The third major reason for not investing was the lack of intellectual understanding of how the markets work. As always, technology has solved these problems for us. Below are five micro-investing apps that recognize those needs and are aimed at helping millennials invest with little money.

Acorns — makes it easy to invest without missing the money you set aside. It rounds up your debit or credit card purchases to the nearest dollar and automatically invests your digital change into a portfolio that works best for you.

Stash — Stash is very similar to Acorns except Stash doesn’t invest for you. Instead, it gives you recommendations and you have to choose how to invest your money.

Twine — Twine is a micro-investment app for couples. If you and a special someone want to invest towards a goal together such as a wedding, honeymoon, or future home, then this app could help you all make passive income together to reach your shared goal.

Qapital — this app is perfect for goal investing. If you have a specific reason for micro-investing then this is perfect for you. You can set up multiple investment accounts for specific goals on this app.

Robinhood — this is not a micro-investing app, but an investment app that allows users to purchase full stocks in companies. You are responsible for choosing the stock. There are no recommendations and you must be financially able to purchase the full stock. The reason I included the app is that there are no overhead fees.

Asset #3: Foreign Currency

A recent trend among young millennials is Forex trading. Forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world’s currencies trade. The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion. When it comes to trading, many people are familiar with day traders. Day traders are people whose full-time job is to trade on the market. However, there is another strategy that works well for people that have 9 to 5 jobs. This style of trading is called Swing Trading. A trader analyses the markets at the beginning of the opening week and set their predictions. They allow the trends to ride out for 3 to 4 days before exiting. You can invest as little as 50 dollars to get started, however, trading requires an investment in educating yourself so find the right mentor or group and get started! There are many to choose from.

Here’s a short video on Swing Trading by Shaquan Lopez who is one of the best teachers I have found in the Forex game:

Asset #4: Products

Products such as shoes and purses are normally seen as liabilities. However, again for the fourth time, thanks to technology they have become an asset class of their own. Below are a few ways to leverage products you already own or other people’s products to generate passive income.

Dropshipping — is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product using the dropshipping model, it purchases the item from a third party and has it shipped directly to the customer. This is a great model because there are no upfront costs in inventory. Check out the video below!

StockX — The Stock Market of Things Buy and Sell Authentic Sneakers, Streetwear, Handbags, and Watches. Sneakerheads now can utilize their knowledge about the shoe game to buy and sell shoes like stocks.

Affiliate Marketing — Affiliate Marketing may be the most passive options out of the other two proposed options. Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.

“There is no lower, middle, or upper class. There are the investor class and the people who have to work for a living.”

As you embark on your journey towards financial freedom and acquiring assets, I would like to recommend a mobile app to you called Personal Capital. Their free software automatically tracks the performance of your income-producing assets, including monthly cash flow, annual return, and even free fee analysis. An all in one, easy to use dashboard. I guarantee you will love it!

Please leave comments and feedback! Follow the Cash Flow Project on Instagram @CashFlow_Project_ for weekly content on ways to generate cash flow.