Best Investments that Pay Monthly Income: The 12 Best Strategies

investments that pay monthly

While there are many differences between the rich and the rest of society, the most glaring one is that they just seem to do nothing and still make money.

Their monthly income investments make them so much money that they can earn full salaries without moving a finger. However, contrary to commonly held views, investments that pay monthly income aren’t beyond ordinary people’s reach.

You can earn a full monthly income from your home, just basking in the glory of your amazing investments. This is called passive income, and increasing it is the primary goal of investors everywhere.

And yes, you have several choices, and you don’t need to have a considerable amount of money. There’s a common misconception that investment opportunities that don’t require large capital are few with low returns.

Well, there are many investment ideas and opportunities that you can expand on. You also don’t need to have hundreds of thousands of dollars to invest.

Some investment strategies won’t even cost you a hundred bucks before you start making substantial returns.

However, investing is certainly not a get-rich-quick scheme. It takes time, patience, wisdom, and constant reinvesting to make it big.

In this article, I’m going to show you the 12 best investments that pay monthly income. These ideas are strategies you can implement today (some of them you can start as soon as you’re done reading). 

Remember, how much you invest isn’t a big deal. Just START. Even the smallest investments can bring the largest returns with time.

12 Best Investments that Pay Monthly Income

These monthly income investments are divided into two which are the Classic investments and personal investments

Classic Investments that Pay Monthly

When I say classic investments, I’m referring to more commonly known investment opportunities. These opportunities are usually found in financial publications, and they’re generally open to all.

These investments are run by organizations and even the government. However, this doesn’t mean they’re risk-free. I’ve listed seven today.

1. Bonds

Bonds are loans an individual gives to a company or organization. These loans generate interest at a fixed rate for a specified time. Once the time has elapsed, the individual gets their money back.

Bonds can be broadly categorized into two: corporate bonds and government bonds.

In general, bonds are considered low-risk investments. They’re usually favored by those close to retirement or those who want to play it safe.

If you’re one such person, then government bonds might be the best investment for you.

Government bonds are significantly lower risk than corporate bonds. This is because companies and organizations are still run by private individuals who can choose to default on the loan.

If they do, it’ll prove extremely difficult to retrieve your investment. The riskier your company is, the larger the chances of default.

However, there’s a sweet side to buying bonds with risky companies; there’s usually a higher interest rate.

If you don’t want to buy bonds with corporations or the government, you can invest in individuals and small businesses with Worthy.

For this, you earn a 5% return every year. Please note that bonds require large amounts of cash and usually take several years to mature. But with Worthy, you can invest as little as $10.

2. Dividend-Paying Stocks

Stocks are shares in a company allotted for public purchase. When you buy stocks, the company gives you a small part of itself in exchange.

Dividends are the interest paid by the company to the stockholder.

They’re the returns on the money you invested into the company or organization.

Dividends are usually paid quarterly, but some companies pay monthly as well. The amount you receive is directly proportional to the amount you invested and depends on its performance.

Some people have been able to hone their money-making talent and strike it rich through the stock market.

However, doing this requires knowledge about how the stock market works and research into your selected companies.

Investing in stocks can be risky because companies’ value rises and falls each day and can’t be reliably predicted.

However, dividend-paying stocks are much less likely to fluctuate than other stocks. In this manner, they have far less risk attached. Some qualified dividends also get a reduction in tax.

But, this reduction is dependent on your level of the federal tax bracket. If you’re 25% bracket or higher, you’ll pay around 15% or 20% on your dividends.

Any lower than 25% in the federal tax bracket, and you’ll even pay lower rates. After the 15% bracket, you don’t have to pay taxes on your dividends.

These benefits are only for some qualified dividends. You also need a lot of money to invest in dividend-paying stocks.

3. Preferred Stocks

Preferred stocks is another investment that pays monthly dividends. Preferred stocks are simply stocks with a higher preference and a lot more advantages compared to common stocks.

Individuals with preferred stocks have a better claim to the company’s assets than other stockholders. Preferred stocks have a more predictable dividend level, which is not dictated by the Board of Directors.

Preferred stockholders usually receive their dividends ahead of common stockholders. If the company falls on hard times, its liquidation results will be shared among preferred stockholders before common stockholders.

This preference also holds when it comes to the number of dividends to be paid.

Preferred stockholders generally get paid higher dividends than common stockholders do. Sometimes, the difference is several times higher.

So, if you’re going to buy stocks, it might be worth it to spend a little extra to make them preferred, so you can earn more with an investment that pays monthly.

4. Annuities

Annuities are an investment opportunity that is comparatively low risk and has been hyped in the investment world.

An annuity is basically a contract between you and a financial institution, most often an insurance company that requires the company to make payments to you. Annuities can be bought once or broken down into payments. Similarly, the returns can also be paid once or periodically.

There are three types of annuities, each with its pros and cons. There’s the fixed annuity where the company promises you a minimum interest rate and a fixed amount of payments.

When an individual chooses to purchase variable annuities, this means that all payments from the annuity will be redistributed into other pre-approved investments.

Of course, this means that your payout will no longer be decided by the insurance company but by the amount invested, the rate of returns, and other expenses.

Indexed annuities are annuities that are repaid with returns based on a stock market index. All types of annuities are regulated by the state insurance commissioners, except for variable annuities. Those are regulated by the SEC.

If you’re looking for a low-risk investment that pays monthly, annuities are a very low-risk investment option.

However, when searching for a place to buy annuities, you must research the financial strength of the companies you shortlist.

You don’t want your company up and declare bankruptcy before your payout is complete. You should also take the time to understand every feature of a variable annuity if you choose to buy one.

5. Peer-to-Peer Lending

This is one of the higher-earning investments that pay monthly. Peer-to-peer lending is simply a sophisticated term for loaning someone money.

This service has been available since 2005, and there are now many websites that facilitate this process. It’s also called P2P lending.

This is how it works. As an investor, you open an account on the platform and deposit a sum to be dispersed as loans. The borrower will also create an account with a financial profile attached.

This financial profile is assigned a risk category that determines the interest they will pay.  The borrower will accept an offer, and the transaction will be done through the platform.

The process can be automated, but you and the loaner also have the option of bargaining.

The site sets the terms and the rates and oversees the transaction. The interest range will vary depending on the creditworthiness of the borrower.

As usual, the higher the creditworthiness, the lower the interest rate. Most P2P lending websites have a minimum credit score to reduce default risk for their investors.

This is one of the best investments that pay monthly, in our opinion, because you’re helping people and making substantial cash.

The rule of creditworthiness on P2P lending websites reduces risk significantly. However, this method does require a large amount of upfront investment.

6. Mutual Funds

Buying a mutual fund is like buying stocks but with all the profit and no authority or decision-making value.

A mutual fund is a sort of company that collects money from investors and then puts it in many money-making devices like stocks, securities, and other investments. In this way, they can make enough to pay back their investors and make a profit.

The person who manages a mutual fund is a professional financial manager. That is someone who’s an expert in investments and financing.

Mutual Funds are a way for ordinary people to enjoy the benefit of a financial advisor. This advisor and the rest of the people in charge of the fund are responsible for growing the money placed in their care and paying out dividends.

While we have mutual funds as one of our investments that pay monthly, mutual funds pay quarterly or yearly.

You don’t need a massive amount of money to invest in mutual funds.

However, it is advisable to continue reinvesting your mutual funds so you can reel in better rewards when you choose to withdraw or sell your share.

7. Real Estate

Investing in real estate is a given for many people. The real estate industry looks like a money-making machine, and in some ways, it is.

There are several ways to invest in real estate. Some may seem obvious, while others might come as a surprise to you. Today, we’ll introduce three methods.

  • Public REITs: Real Estate Investment Trusts are mutual funds, but for real estate. They gather money from investors to put into the building or buying real estate. They can be categorized into two: public REITs and private REITs. Public REITs are high-paying, low-risk, and one of the best investments that pay monthly for individuals new to real estate business or investment in general.

The SEC requires public REITs to pay 90% of their profits to shareholders as dividends.

This is great for shareholders as this can sometimes mean returns above 10% of their investment every year. However, this rule also limits the ability of public REITs to retain funds and expand.

  • Private REITs: Private REITs are different from public ones. Investments here are planned for much more extended periods, usually around five years or longer. Private REITs invest in commercial buildings and are much more illiquid than public ones. However, you can expect around 4% to even 10% ROI.

These two methods are good investments that pay monthly, but there’s one more classic way to invest in real estate.

  • Become a Landlord: Simply own a property and rent it out. You can rent out your properties and get paid monthly “dividends.” If you don’t have an entire property to rent out, you can simply rent out your spare room or basement. One of the most popular platforms to do this is Airbnb. This is an excellent investment that pays monthly because it doesn’t require you to spend much money if you already have all the available facilities.

But it can quickly get expensive if you want to buy a new property to rent it out.

The above are investments that pay monthly, but they are usually ventures that you undertake with a company or a group of people.

However, there are other investments that generate monthly income that doesn’t need you to invest in a company or to spend a large sum.

This part is my favorite. Let’s take a look.

Personal Investments that Pay Monthly

These are investments that pay monthly but are undertaken by you alone. What this means is that they’re riskier and might require you to do a lot more work.

However, this also gives you more control over the process of earning income and all the power of decision-making.

In this way, you can maximize your profit. Earnings in this category usually pay far more than those above.

Today, we’ll explain five of these investment opportunities.

1. Start an Online Business

Starting an online business is hands-down one of the most lucrative investments that generate monthly passive income. When you start your own online business, as the sole owner, you’re the only one who receives all the profit. Of course, you also receive all the risks.

However, because this method doesn’t require a lot of money, you don’t stand to lose a lot of money.

There are many online businesses you can create. Here are a few ideas.

  • Create an Online Store: Got something you can sell? You can create an online store and sell it to earn a profit. Creating an online store has been made ridiculously easy with websites like Shopify and 3Dcart. However, if you don’t want to go the full hog and create an online store, you can simply put up a listing on Etsy, Amazon, or eBay.

There’s also the option of thrift shopping and selling online. You can even start dropshipping. This means basically selling someone else’s product on your own platform. This way, you can eliminate the cost of obtaining goods or delivering them. This investment comes with monthly returns in the form of profit, and if you have your own website, you can collect some money from ads.

  • Start a Blog: If you love to write and are passionate about certain topics, you can create a blog as another stream of income. The investment required to get started (purchase a domain name and hosting) can be less than $3 a month, which makes it perfect for beginner investors. You will need consistency and dedication to run a successful blog, but once your blog starts gaining traffic, you can start getting paid to promote products and for ads. You can even market your products on your blog and sell more.
  • Become an Affiliate Marketer: Affiliate marketing involves promoting a product or service to an audience. In return, you get a commission from the owner. Affiliate marketing is an investment that doesn’t need you to invest a lot. Some affiliate programs don’t require much from you except that you provide a way to market their products. This way can be a website/blog or some other means that doesn’t require you to own a website or blog.

2. Invest in Digital Businesses

Nowadays, there are a few digital businesses that offer large returns for relatively small investments. We’ll look at two: Forex and Bitcoin.

  • Forex Trading: Forex trading is making a profit through the exchange of foreign currencies. This method only needs small investment, but it has produced large returns for Forex traders.

If you’ve been looking for where to invest money to get monthly returns, Forex trading could be for you. However, to achieve good results when you trade, you have to study lot about this business. It’s not something you can succeed in without knowledge and skill.

  • Bitcoin: Bitcoin is a new cryptocurrency, one that’s currently growing in popularity. All you have to do is buy Bitcoin and hold onto it until the market value increases to a satisfactory rate. Then, you can sell it for a profit. This business also requires knowledge and skill, plus a dash of luck, because it only takes a few hours for the price to begin to deteriorate.

Like any currency, Bitcoin sometimes rises and sometimes falls, so you have to pick the most suitable time to sell yours. Too little patience can result in you missing more profit. Too much patience can result in you missing the perfect opportunity.

3. Social Media

Social media isn’t a well-known source of monthly income, but it could be for you. Social media influencers can make thousands of dollars a month, and most of it is passive income.

Here are a few popular platforms that you can use to start earning an income.

  • Instagram: Instagram is one of the largest social media platforms today, and it’s still growing. It isn’t that hard to make money on Instagram, and there are many ways to do it. While some ways may require you to increase your followers, it’s not a necessity for others. If you’re interested in learning how to make money on Instagram, you can monetize Instagram with affiliate marketing, by selling your products or brand sponsorship.
  • YouTube: YouTube is the largest video sharing website in the world. It is possible to become famous through YouTube, and it’s also possible to earn a monthly income by making videos. Here’s a complete breakdown of how to start earning on YouTube.
  • Pinterest: It isn’t just for sharing pretty photos. Pinterest can also be your moneymaker with just a little or no capital.
  • TikTok: This app only recently took the world by storm, but there are already ways you can start earning money off of it. See more here.
  • Snapchat: Surprised? Yes, you can make money off of Snapchat. It also doesn’t require a lot of investment. You can learn how to do it right here.

4. Invest in People

If you’ve got the cash, investing in people could be the best investment you’ll ever make. Some people are still in the early stages of creating their business empires, if you manage to catch them young, you might reap a bigger benefit than you think.

Think of those people that invested in Coca-Cola when it was nothing but a small startup. Now those shares bring in enough money to live off.

The platforms that support this are called equity crowdfunding platforms. Examples are CrowdFunder, AngelList, LocalStake, CircleUp, SeedInvest, etc.

5. Invest in Yourself

You can never go wrong by investing in yourself. You’re the only share that can’t default or be mishandled.

By investing in yourself, you can grow both your self-confidence and your worth as a person. Invest in your education, your health (both physical and mental), and your happiness.

This can be achieved by doing something like taking the time to exercise, reading a new book every month, or learning a high-income skill.

FAQs

What is the best investment for monthly income?

The answer to this question depends on who’s asking. An investment that works for you may not work for another person because of your different circumstances. To find the best investment for yourself, you have to answer three questions.

  • How old are you?
  • How much risk are you willing to accept?
  • When do you plan to retire?

In this way, you can decide which investments are too risky, too long-term, or too difficult for you.

Can I reinvest my earnings from another investment elsewhere?

Yes, you can. After all, it’s your money, and as long as it’s withdrawable, you have every right to reinvest your money elsewhere. With some REITs, the fund can help you with that.

Final Words on Investments that Pay Monthly Income

Depending on what you want out of your money, you can always find a suitable investment that pays monthly income.

Though they all have their own constraints, I believe that one of these 12 monthly income investment opportunities will earn you some money sooner or later. If you invest right now, you might get your first dividend this month!

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Ajibola