Many people dream of earning money doing nothing, but they never take the required actions to make their dreams come true. If you have a small amount of money to invest in passive income sources, it’s not as difficult as you may imagine. Earning money with little to no effort is known as passive income.
Although capital is the primary requirement for generating passive income, it is unnecessary if you already possess certain assets, such as a home or automobile.
Financial influencer Vincent Chan talked about a few of these passive income sources in a recent YouTube video. According to Chan, these six passive income sources will help you accumulate money in 2025.
Real Estate
Contrary to popular belief, investing in real estate doesn’t require a significant financial commitment. As Chan pointed out, a real estate investment trust (REIT) can actually help you get started for as little as $1,000, $100, or even $10. According to Investor.gov, REITs are businesses that possess real estate that generates income. They must distribute 90% of their profits to shareholders, as Chan pointed out.
REITs often provide respectable returns and are publicly listed on stock markets, though not all of them are. For instance, S&P Global reports that the Dow Jones Equity All REIT Index generated an 11.3% return in 2023.
Chan suggested investing in “future-proof” REITs, such data center-focused ones, which are expected to be in high demand as artificial intelligence and other technologies advance.
Rental Cars
You should think about using Turo, a marketplace for car rentals, for this passive income source.
“Consider Turo as Airbnb for cars, where you can basically list your vehicle on its marketplace and let other people rent it out,” Chan explained.
However, there are a few important factors to take into account. First, consider where you are. According to Chan, cars in busy cities or popular tourist destinations usually receive the most reservations. You should also think about the kind of vehicle you drive. On average, higher-end cars make more money than other types of cars.
Small Businesses
There are plenty of investment options because the U.S. Small Business Administration estimates that there are 34.7 million small enterprises in the country. However, you should concentrate on companies that don’t need your active involvement if you want to generate passive revenue.
Chan suggested searching for companies that require little work to operate, such affiliate marketing websites or FBA (fulfillment by Amazon) stores. Many of these can be purchased for just a few thousand dollars.
Stocks with dividends
Dividend payouts are a passive source of income when you invest in dividend stocks. According to Chan, the payout ratio—the proportion of profits that a business will distribute as dividends—and the dividend yield—which indicates how much return you should receive in relation to the stock price—are important factors to take into account.
Because the S&P 500 is primarily composed of big, well-established corporations, it is one of the greatest places to identify dividend stocks. According to a recent U.S. News research, Walgreens Boots Alliance, Verizon, and Ford Motor Company are among the top 10 dividend-paying stocks.
Index funds for dividends
Chan suggested investing in dividend index funds for people who enjoy the concept of a consistent payout but don’t want to pick individual stocks. You may enjoy a “spread of companies without having to pick out each dish” by viewing these as a “buffet” of dividend-paying stocks, according to Chan.
Keep a close eye on the fund’s annual fee to cover administrative costs, known as the expense ratio. Your return will be better if the ratio is smaller.
Account for High-Yield Savings
This is his “absolute favorite” source of passive income, according to Chan. Many smaller banks, internet banks, and fintech companies offer high-yield savings accounts, which provide yearly percentage returns that are significantly higher than usual.
When selecting a high-yield savings account, Chan advises taking into account the interest rate, fees, and Federal Deposit Insurance Corporation insurance.
Conclusion
Building passive income streams is an excellent way to secure your financial future and achieve wealth in 2025 and beyond. As Vincent Chan highlights, options like REITs, rental cars, small businesses, dividend stocks, dividend index funds, and high-yield savings accounts offer diverse opportunities to earn money with minimal ongoing effort.
Whether you’re leveraging your existing assets or starting with a small investment, these strategies can help you grow your income over time. Remember, the key to success is understanding each option’s risks and rewards and making informed decisions. By taking action today, you can create a sustainable and lucrative source of passive income to support your long-term financial goals.