Warren Buffett famously said, “If you don’t find a way to make money while you sleep, you will work until you die.” I don’t know about you, but I don’t plan on working until I die – unless it’s working on my golf game.

Like many other Americans, you need to supplement your income. Just saving your salary is not enough. You need to make money while you sleep – a lot of it. And the best way to do that is by setting up passive income streams. That means money in your pocket without going to work.

These five passive income streams in 2020 can fund your retirement and help you live the lifestyle you deserve.

Dividend Stocks

Dividend stocks are a reliable form of passive income. Dividend-paying companies usually pay quarterly dividends to shareholders. Dividend investors appreciate having scheduled income. If you create a successful portfolio, you could live entirely off dividends.

When investing in dividends, it is important to be mindful of variables like payout ratio, free cash flow and dividend yield. These factors help determine if the payout is reliable.

Real Estate

There are several different ways to make money through real estate. The most obvious way is to buy a property, increase its value and rent it out. Being a landlord can be profitable, but it requires a lot of capital, time and effort. Fortunately, there are other ways to profit from real estate without directly owning property.

Crowdfunded real estate is a relatively new option. It was made possible thanks to today’s social platforms connecting vast networks of people. Increasing the pool of investors increases the potential for entrepreneurship. Crowdfunded real estate allows investors to access the real estate market with smaller amounts of money. In some cases, you need only $500 to get started.

Real estate investment trusts (REITs) allow individual investors to buy shares in commercial real estate portfolios that receive income from a variety of properties. REITs are easy to buy and sell and exist on most public exchanges. REITs also provide diversification for stock and bond portfolios. 

Peer-to-Peer Lending 

Peer-to-peer (P2P) lending is when you loan someone money to avoid going through a bank. P2P lending is popular among people who do not qualify for loans from traditional financial institutions. It began around 2005, and since then, there are several lending sites, like Prosper, Lending Club and Upstart. You can make 6% or more lending money to individual borrowers. Investors do need to be aware that defaults can occur with P2P lending.

Bonds

If you’re seeking security, look to high-grade bonds. They provide safe and passive income streams. Bonds confer ownership of the loans taken out by companies and governments. They’re called fixed-income instruments because investors receive fixed interest payments, usually twice a year, until the loan expires. When the loan matures, investors get their initial investment back.

Get Creative

You can develop an app, create a blog or YouTube channel, or make an audiobook through Audible ACX. You can also write e-books and publish them using Amazon Kindle Direct Publishing, or you can take photos for Shutterstock or similar sites.

These are only five suggestions, but the sky is the limit when it comes to passive income. Take control of your financial future. Implement some of these strategies so you can go to work less and work on your golf game more.

Good investing,

Peter