9 Income Producing Assets to Generate Passive Income (2024)

Income producing assets are an exceptional way to help families acquire wealth for their future. Starting exactly where you are today, you can begin looking at the different opportunities to help you earn more money.

I wrote out my top 9 favorite ways for people to begin investing in assets to produce more income as well as some expert tips to help you succeed.

Read more about passive vs. nonpassive income to understand why passive income is the best thing ever!

What is an Asset that Generates Income?

Income producing assets are extremely important to look into when you are looking at acquiring lots of wealth. This can look like creating recurring revenue, cash flow, or income over time.

Luckily, it isn’t impossible to get some of these income producing assets on your own. Start small and with a plan using my favorite tools to help your family generate wealth all year long with little work on your end.

With some smart planning and a little luck, you could retire early and continuously earn income through these investment opportunities!

You may also want to check out these amazing passive income apps.

The Best Income Producing Assets

These are the assets I believe, in my opinion, are the best ways to invest your money in assets so you can generate income and live your best life. Some are not as passive as others, so choose the ones that fit your lifestyle!

Bonds and Bond Index Funds

Essentially, bonds are IOU’s from businesses (or government) to investors. You pay a specific amount into the bond and the company agrees to pay a certain percentage back to you.

There are a variety of bonds to help you increase your wealth, just make sure you do your research in order to get the most money in return. Typically, you can expect between 1-4% back and bonds are known for their stable return.

While binds carry pretty low risk, the returns are also lower so you will need to invest more in bonds to make a larger return you can live off of.

Websites

If the idea of buying and flipping a house sounds awesome, but also like way too much time and money, maybe look at taking that idea virtual. You can build your own website for fairly cheap and- with a little bit of time- you can end up selling it for much, much more.

I have a friend, for example, that builds mom blogs then slowly works on them for a few months so that her page views continue to grow. Once they hit a certain number, she sells the website for a lot. Like 10-20 thousand dollars- all for a little bit of work at the beginning.

Farmland

In the past, only the super elite could afford to invest in real estate outside of the traditional commercial and residential properties. Luckily, things have taken a turn in the past few years and the opportunity for you to own your own bit of farmland is easier than ever.

Thanks to crowdfunding platforms such as FarmTogether, anyone can begin investing in this special opportunity.

So why is investing in farmland a wise decision? Think about it this way- farms produce food and people will always need to eat. If you can invest, you can expect a minimum of a 10% return annually and it is expected to continue to appreciate over time.

Always note there is risk involved with any investment and returns are not guaranteed.

Timber Land

Similar to buying some farmland, there is some significant value in owning timberland.

If you can find land with decent soil, you can easily grow trees that sell for big bucks in a few years. Sure, different wood will cost you a different amount of time (in some cases decades), but the return may be worth it.

An acre of walnut trees, for example, can easily go for over 6 figures.

You can also use that land to provide other income sources while your timber grows. You can use those walnut trees and sell walnuts for the years the wood is growing to supplement your income.

This income producing asset is great because no matter the weather, money will grow on trees.

Certificate of Deposits (CDs)

CD’s are a great low risk way to generate wealth. Most banks and credit unions offer them and they are simple enough to understand for most people.

Essentially, you choose a ‘term length’ where you commit to lending a specific amount of money to the bank. This can be as short as 3 months or as long as five years.

While you are waiting for your term to come to an end, your money will acquire interest so that you come out with more than you started with. Typically, the longer the term length, the more interest you can acquire.

It is important to note, however, that there are penalties for withdrawing any money from the CD before the term length is over. Keep this in mind if you want to look into using a CD to accumulate more money so that you don’t end up investing money that you will need sooner rather than later.

I’ve known people that use a CD to help them save up for their wedding, a down payment on a house, or even a trip to Hawaii.

Money Market Accounts

Similar to starting a CD, a money market account works similar to a savings account. You place a certain amount of money into an account and wait for it to accrue interest.

The difference from a CD is that a money market account isn’t set up to use for a specific term length. In fact, you are welcome to withdraw the money at any time.

Just make sure you know how many withdrawals per month you are allowed to do.

Note: right now interest rates are very low and the ability to make money with interest in money market accounts is very limited.

Buying a Small Business

An excellent asset to help generate income is to buy a small business and help it thrive. This way, you are able to become a CEO to a company with a strong foundation and help increase revenue.

By finding a business with the wheels already turning, you reduce the risks significantly. With staff already trained, customer loyalty in place, and processes set, you are sure to see success.

Not sure what type of business you would want to invest in? Think outside the box! There are plenty of businesses that you could take to the next level (and increase that revenue). Some examples are:

• Bookkeeping (learn how to start your own bookkeeping business too)
• Cleaning Services/Housekeeping
• Pool Cleaning Service
• Landscape
• Handyman
• Real Estate (agent, inspector, appraiser, etc.)

Coffee House

While you may need to make a large investment up front on a decent location, owning a coffee house can be an excellent income producing asset. With luxury coffees costing upwards of $6-7, the ROI can be pretty incredible.

I have a friend that own a very popular coffee shop (S3 Coffee Bar) and she does well. It can be a lot of work at the beginning, but in the end you have an income generating asset!

Car Wash

A self service car wash can bring over $1,500 a month. With low start up costs and even fewer employee costs, owning a car wash can be an excellent asset.

If you are looking to go bigger, look into owning a conveyor belt car wash service. Not only do they practically run themselves, but you will be able to earn a few hundred thousand annually.

Pest Removal Services

While this sort of work may not seem the most luxurious, if you can hire strong employees with lots of experience, chances are you will succeed. This is definitely a recession proof business as well.

Owning a business like this is a great asset to generate income because the need is everywhere. Cities, rural communities, and everywhere in between need the occasional help with pest removal.

Storage Facilities

If you have the opportunity to run a storage facility- take it! The money in one can be a life changing experience.

With minimal work, people will pay to rent out units to store any extra items that they want to keep but don’t have the space for.

This is a great way to make some passive income without having to put it a ton of work (once it’s up and running).

Daycare

Running a daycare is an excellent investment because there is always a need for one. In any community, there is an opportunity to hire a few workers to play all day with a group of children.

There are some liabilities when taking care of other kids, so make sure you invest in the proper licensing to keep your business running smoothly.

Laundromat

Becoming the CEO of a laundromat may seem less than glamorous, but when you start earning that cash with little work, you’ll start to see why. This is another recession proof business!

With few employee costs and minimal ongoing expenses, you have the potential to earn around $50,000 annually.

If you can dream it, you can do it!

Short Term Rentals

One of the most popular income producing assets to generate wealth is to have a short term rental available. It could be a room in your home, a tiny house in your backyard, or a rental property down the road.

People are always looking for short term rentals to put a roof over their head in a comfortable way.

Airbnb’s are an excellent example. They are homes that you can rent for a few days, weeks, or even months in locations all around the world. The best part? People will pay really well for one.

In my neighborhood, for example, there are a few short term rental properties that are rented out to different groups throughout the summer.

The amount of money that the owners make in a few short months is enough to pay for the mortgage for the entire year. Once they own it right out? All that money will just go straight into their pockets!

Real Estate Investment Trusts (REIT)

Never heard of REIT? You aren’t alone. These super secret income producing assets are a secret for a reason.

Essentially, they are the stocks of the real estate world and are designed for someone looking to get into the rental business, without the responsibility of dealing with tenant issues.

It’s exciting because with even the purchase of one share you are a landlord to all sorts of real estate- commercial, residential, and everything else you can dream of.

Real Estate

This is actually my favorite way to generate income. You can buy a property and rent it out to long term tenants.

You can manage the property yourself, or pay a property manager to do it for you and have a very passive income stream.

I personally hire a property management company and they take care of everything. The only thing I do is collect the check every month, which is awesome!

Learn how to use rental property as passive income and how to buy an investment property!

Things to Keep In Mind

Smart investments take time. Don’t expect to become a millionaire overnight, but with proper planning, your income producing asset will create a lot of wealth in the end.

Investing isn’t always exciting. In fact, most investors will tell you that your income producing asset isn’t meant to be exciting. Remember, you are acquiring these assets to help you become rich, not be entertained. So avoid investing in the local rodeo and find a solid car wash to invest in instead.

Always have a plan. Before you open up a CD or a money market account, look at your finances and make sure that you are able to make that sort of investment. The same goes for starting a business or buying farmland- you need to make sure that you can do it in a financially smart way. Otherwise you could end up in some serious debt- you don’t want that!

In Summary

There are so many opportunities for families to invest in income producing assets to generate income. Whether it’s buying farmland or opening up a coffeehouse, there are plenty of ways for you and your family to begin acquiring wealth through owning an income producing asset.

So tell me… what did I miss? What are your favorite income producing assets that you think should’ve made the list? Tell me in the comments below!