Setting up active-duty passive income streams can help put military personnel on the path toward financial freedom. Being able to generate passive income at the same time as being on active duty can help you bring in a stable source of income now and even set you up for retirement.
There are several options to generate passive income. Some of these have more requirements than others but there are good options for everyone.
1. Stocks
Trading stocks and other assets is a potentially lucrative option for people in the military. Due to the ever-growing number of online trading platforms, it’s never been easier to join the stock market.
Day-Trading
Day-trading involves buying stocks when the price is low and selling them when the price is high. When considering trading as a source of passive income, you should carefully consider the risks involved. Though trading can be lucrative, some knowledge of the market is useful. It may be worth collaborating with an expert to find out where to start.
Demo accounts: Online trading demo accounts allow you to practice trading without putting money on the line. Once you’ve learned a few tricks of the trade, you’ll feel more confident taking the plunge.
High-Dividend-Yielding Stocks
This type of stock typically pays shareholders on a regular basis. Many people prefer to invest in high-yielding stocks rather than keep their savings in a bank where interest rates may be low. If you don’t want your money sleeping in the bank while you’re on active duty, stocks may be a good option.
Though stocks don’t guarantee a profit, they offer two ways to earn money while you serve:
- Stock price appreciation
- Regular dividend payments
As stock prices can also fall, be sure to get expert advice before diving in.
2. Real Estate Investing
Investing in a rental property is a go-to way of earning a stable and reliable source of passive income. Real estate investing is especially appealing as it generates income in two ways:
- Property generally appreciates over time, so you are likely to make a profit when you eventually sell.
- Real estate generates regular income that you can use to pay off the mortgage. After the mortgage is paid off, you can keep the rent as passive income.
Short-Term Holiday Rentals
Renting your property out as a short-term vacation rental can be an excellent path toward financial freedom. It’s important to know when and where to invest to get the best deal and the best possible return on investment.
Detailed information such as that provided by vacation rental data company AirDNA can help you pinpoint where tourist hotspots are located and where you can get the best “bang for your buck.” Data insights can also help you decide how much to charge and the kinds of amenities your guests will expect.
Military Real Estate Loans
Eligible serving military members and veterans can potentially get a VA loan to help them purchase a property. It’s worth investigating your VA home loan eligibility to see if you qualify for a loan, as they come with several advantages:
- No need for a downpayment
- Low interest rates
- Limit on closing costs
- No need for private mortgage insurance
Please note that VA home loans are for primary residences. However, you can rent out rooms in the home that you’re not using or even entire units if you buy a duplex, triplex, or quadplex and use one of the units as your primary residence. This provides opportunities for earning passive income from short-term rentals, long-term rentals, or both.
3. Cryptocurrency
Buying and selling cryptocurrency is another possible path for those willing to learn about the process. Due to the increasing number of cryptocurrencies on the market, there are lots of opportunities for investors looking to buy low and sell high.
Despite the hype, some do make money from crypto. But just like stocks, buying and selling crypto comes with its risks and requires careful and considered moves. Lower-risk cryptocurrencies that could be good options for beginners are ApeCoin, Polygon, Ethereum, and RobotEra ($TARO).
4. Amazon FBA
Amazon FBA, aka Fulfillment by Amazon, can be a fairly low-maintenance way to generate passive income. Amazon FBA is essentially a way of outsourcing order fulfillment to Amazon, which stores the items, packs, and delivers them.
Typically, you’ll need to make an initial investment of around $500 or more, but many people start seeing returns in the third or fourth month. Selling on Amazon is fairly straightforward and there are many guides online on how to set up an account to make a slow but steady cash flow.
5. Affiliate Marketing
Affiliate marketing involves marketing someone else’s products and services in exchange for a commission on each sale. According to Shopify, brand affiliates can earn between 5% and 50% commission on products purchased through an affiliate link. Though creating content takes some time and effort, all subsequent sales earn you passive income.
Becoming successful as an affiliate marketer is competitive and requires consistent engagement with your audience. Learning how to utilize videos and reels as well as marketing strategies like giveaways, discounts, and competitions can help to generate traffic, expand your audience, and potentially increase your passive income.
Boost Your Income Today
Whether you want to create a modest but reliable source of extra income or are looking to build generational wealth, there are several ways to boost your military income. Asking fellow military personnel or other veterans in the community how they provide passive income for their families could be a great place to start.
For those who don’t want to delve into the world of stocks or crypto, investing in short-term rentals is a great way to generate a reliable and safe source of income. With detailed and up-to-date data, you can optimize income from real estate for both short and long-term gains.