5 Passive Income Ideas for Increasing Your Cash Flow in 2021

NEW YORK, March 24, 2021 (Newswire.com) - Yieldstreet belives there are two fundamental aims of investing: to protect and grow your money over time, and to generate passive income from your capital. 

Passive income can boost investors' regular income and help them stay disciplined in their investing

Here are a few popular ways to potentially generate passive income. 

REITs

REITs - Real Estate Investment Trusts - are publicly traded vehicles to facilitate indirect investments in real estate. 

Pros to investing in REITs include the ability to get exposure to the broader economy and receive regular dividends.

Cons to investing in REITs are that they carry market volatility and may see meaningful price declines while the broader equity markets does not. 

Private debt

Private debt is an alternative form of investing where investors can lend directly to businesses. For example, Yieldstreet offers private credit investments to retail investors through its platform.

Pros to investing in private debt include potential returns that are typically uncorrelated to the broader market, allowing for diversity and balance in one's portfolio.

Cons to investing in private debt and alternatives include that it is often only available to accredited investors and that the investments are far less liquid than publicly traded investments.

CDs

CDs - Certificates of Deposit - are offered by banks with a fixed interest rate, in exchange for the client agreeing to leave the CD alone for a fixed time span.

Pros to investing in CDs - they are often federally insured up to $250k, meaning there is little to no downside risk.

Cons to investing in CDs are that when interest rates are low, the returns that come with CDs are quite low, and the investor is getting little in exchange for losing flexibility with their capital.

Equity dividends

Equity dividends are payments made by companies to their shareholders from the companies' earning streams.

Pros to investing in equity dividends are that you receive regular dividend income from your stocks, and can participate in the capital appreciation that comes with holding the stock.

Cons to investing in equity dividends are that if the company's earnings falter, they may stop paying the dividend, leading to a loss of income stream and a decrease in capital value.

Bonds

Bonds are obligations where companies or governments borrow money while agreeing to pay the money back in the future along with a regular coupon, or interest payment, to the bondholder.

Pros to investing in bonds are that they are generally more secure than equities and that the regular coupons offer passive income that investors can count on.

Cons to investing in bonds are that there is still a risk of loss if the company fails or goes bankrupt, and that bonds' upside is limited, unlike equities.

Generating passive income allows you to bolster your income and see tangible investing results that can help meet your income needs.

Source: Yieldstreet