5 Ways to Let Your Money Work for You – 2024 Guide

After a long, tedious day at work, people often find themselves wondering how much longer they have to keep it up. Even in high-paying, rewarding jobs, people realize that their time may be better spent elsewhere — with family, on vacation, or on passion projects.

The best way to quit the rat race and enjoy financial stability is to take your money and put it to work for you. But, with so many places you could put your money, how do you know where you should put it?

What is Passive Income?

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It’s a term that gets thrown around a lot, even with money-making strategies that are anything but “passive.” Passive income describes methods of generating income that require a very small investment of time to yield a return.

Sometimes, you have to invest a lot of time and energy into something before the money starts to roll in. Once it does, though, you can take it easy — or, well, easier. You can check out Daily Prosper.

5 Passive Income Strategies That Actually Work

1. Invest in Real Estate

There are few more tangible assets than land. Becoming a landlord or house-flipper does require a lot of work and feels like a grind at first. After a while, though, you’re going to be chasing the ball downhill, enjoying more and more free time, and feeling more financially secure than ever.

According to New Western, one of the easiest ways to find properties with high potential is to work with a real estate wholesaler. Doing so allows you to focus on flipping and profiting without the extra hurdles that often come with real estate investment.

2. Invest in a Hedge Fund

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If you’ve got sufficient cash, investing in a hedge fund can be a worthwhile way to let your money truly work for you. In fact, it’s one of the least labor-intensive ways to generate wealth. You hand your money over to the fund managers.

Then, let them use their expertise and connections to bring in positive and consistent returns. What’s not to like about that?

3. Find and Hold Stocks

Day trading and shorting stocks are strategies that require a lot of luck and the assumption of huge amounts of risk. The best way to profit from the stock market is to find relatively safe opportunities and hold onto them for as long as you can.

This is, more or less, the same basic principle that Warren Buffet and countless other billionaires used to make their fortunes.

Of course, the stock market requires a lot more savvy than is contained in this simple paragraph. However, the principle is sound and clear: holding your positions is safer and more profitable in the long term than any other stock strategy.

4. Become an Angel Investor

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Angel investors seek out promising start-ups that need cash and give them the funding they require in exchange for equity. Being an angel investor means you need to have lots of cash on hand and enough business knowledge to find the diamonds in the rough. If you find one of those gems, though, you can make a ridiculous amount of money when that start-up succeeds.

5. Invest in a REIT

Real Estate Investment Trusts (REITs) are companies or organizations that invest in and develop real estate. By investing in a REIT, your money goes toward the development of office buildings, hotels, and residential construction. In return, you get a share of the profit from leases or sales on those properties.

According to millionacres.com, REITs are a more passive and low-risk way to be directly involved in real estate, and the profits (while not as high as personally buying real estate) are higher than traditional stock market returns.

What are Some Bad Passive Income Strategies?

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Learning how to invest your money into ventures that will increase your wealth and make your life simpler is difficult, especially if you lack experience. Though some people have succeeded, the vast majority of those who attempt the following strategies lose money, not to mention countless hours of time:

  • Drop shipping: Over the last few years, internet “millionaires” have been bragging about how much money they make every single day by selling cheap products at a huge markup. While it’s true that some people have made it work, the effort and investment required to start drop shipping rarely translate into riches: As this article explains, 90% of people fail, and fail quickly.
  • Fulfillment By Amazon (FBA): this is a popular scheme for a lot of younger people looking to quit their 9-5. It sounds simple enough: purchase products, store them at an Amazon fulfillment center, lure people to your Amazon store, and watch the money rain down, all without touching a single product or shipping box. Just like drop shipping, FBA requires a huge upfront investment and rarely translates to profit because the market is wildly oversaturated.
  • Meme Stocks, Day Trading: Sure, a few people made incredible amounts of cash by pumping GME stocks early in 2024. Other people work out ways to make a killing by day trading. But, the majority of people who invested in GameStop and other “meme stocks” failed to exit their positions before the stocks went back down, and the majority of day traders fail to make long-term gains.
  • Cryptocurrency: This might get some flak, but investing in cryptocurrency is not, and likely never will be, a way to get rich. The few people who have become ultra-millionaires through Bitcoin started investing over a decade ago. The ship has sailed — and, more recently, gone down in flames. Cryptocurrency might be the future, but it’s probably too late to get rich from it.

Wrapping Up: Putting Your Money to Work

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Any method of using your money to make more money involves at least a little bit of risk. While profits are never guaranteed, they’re more consistent with tried-and-true ventures like real estate investing and becoming an angel investor than they are with crypto and day trading.

How are you planning to let your money work for you? Let us know in the comments section below.