Five Types of Passive Income That Are Not Afraid of the Economic Crisis

Those who do not want to work more than 50 hours a week, but dream of maintaining a balance between work and personal life, should think about sources of income that do not require constant participation. What are these sources, says Business Insider.

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Financial advisors offer 5 ideas for generating passive income. The important thing is that these sources of income are recession-proof. So, you can:

Open a high yield savings account

While opening a high-yield savings account isn't likely to earn you thousands of dollars in passive income per month (unless you have significant savings), financial advisor Suzanne Snyder says it's still worth considering.

Interest rates are still relatively high. While the national average interest rate on savings accounts is 0,41%, the best high-yield accounts offer over 4% — more than nine times higher.

Additionally, Snyder notes, "If you can afford to lock up your money for a longer period of time (say, one or five years) in a certificate of deposit, you can earn even more."

On the subject: Passive income: what options really work

Build a real estate portfolio

Investing in property is a source of passive income with tax advantages, and financial adviser George Nicola believes it is worth considering in a recession.

“Passive income from rental contracts is recession-resistant and weakly correlated with market volatility,” Nicola explained.

While owning real estate may require active management to maintain occupancy and condition of the property, you can invest in real estate investment trusts (REITs) that pay dividends as an alternative to passive income.

The best real estate investing apps like Fundrise and Crowdstreet make these investments more accessible and help you diversify your investment portfolio.

Invest in self-service warehouses

If you have some spare cash and are looking to get started, financial advisor Tammy Trenta suggests looking into investing in self-storage units.

In a recession, people may need to sell their homes, downsize, or temporarily relocate. In this case, self-service warehouses will not only be a profitable investment, but also a source of passive income.

There are different ways to invest in self-service warehouses: you can buy your own facility or invest in specialized REITs that already manage a large portfolio of such facilities.

Rent out popular items

One way to create passive income is to look around houses and see what you have that others might want to rent.

According to financial consultant Marley Erickson, if you have the capital, you can even buy an item that is in high demand and then rent it out.

“During a recession, people are more likely to do their own work, which may require special equipment and tools,” Erickson said. “Buy a trailer, for example. The investment is about $2000. Post a photo of it on Facebook and put up signs on it that it’s for rent.”

The financial advisor suggests adding a truck, tools, garden equipment, tents and sports equipment to the rental inventory.

You can rent items out through sites like Friend With A or Loanables. Every time someone books an item, you get paid.

Self-publishing books

If you enjoy writing or have always dreamed of writing your own book, financial adviser Joseph Hoag says self-publishing is a great way to make passive income during a recession.

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"Everyone has an idea for a book," Hoag noted.

He says that once you’ve decided on a topic, self-publishing a book is easy, using platforms like Amazon Direct Publishing or Barnes and Noble Press. Plus, you can set a low price so that the recession doesn’t affect readers’ purchasing decisions.

While it's not easy to become a bestseller for a self-published book, Hoag notes that one benefit is the ability to appear in search results on online book retail platforms (like Amazon, Apple Books, or Barnes and Noble), where people search for new titles every day. This can be more effective than writing blogs on your own site, which will attract a much smaller audience.

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