Finding investments that pay monthly income is ideal for anyone looking to generate serious passive income.
And there are plenty of options that meet this criteria. The question is, though, what is the best investment for monthly income?
It’s going to depend on a few things, such as:
- What is your risk tolerance?
- How much money do you have to invest upfront?
- How much time do you want to spend building your income source up to the point where the investment pays you enough monthly to live off it?
This is why we’ve found a bunch of investments that pay every month, divided up into different categories so that you can find one – or even more – that fits what you’re looking for.
Of course, buying into these investments is only the first step. After that, it’s important to continue to manage your money, including to keep an eye on when these investments value go up and down to make sure you’re really setting your financial future up properly.
This is why we always recommend Personal Capital. It’s a great, free app that lets you manage your money, Including your investments, all in one place.
Our pick: Best money management app
Easily our choice for the best app to help you manage your money better.
Create a budget, track your spending automatically, receive personalized advice, get alerts about hidden fees and a ton more – and it’s all free.
Investments that pay monthly dividends
Investments that pay monthly dividends are exactly what many people have in mind when they start looking for investments that pay you every month.
The idea is that once you invest enough money into these assets, they’ll start paying you enough for you to live off.
It’s good to keep in mind that not every asset that falls into each of these categories pays monthly. Many of them pay quarterly and some don’t pay dividends at all. This is why doing your research is critical.
Exchange traded funds, or ETFs, is a term for a basket of equities, such as stocks, that you can trade on the stock market. They often follow the performance of an underlying index, which is another term for a portion of the market.
A common example is an S&P 500 index fund, which tracks the performance of the 500 largest publicly traded you companies in the US. This may sound oversimplified, but it’s actually true that it’s incredibly easy to invest in this way.
And even better is the fact that history has shown the index funds outperform managed funds more than 90% of the time.
For investing in ETFs, we recommend Webull. Not only does Webull offer a completely commission-free and entirely secure way for you to buy stocks, including ETFs, but once you invest $100, they’ll give you a completely free stock valued up to $1,600.
2. Dividend-paying stocks
When looking for investments that pay monthly dividends, dividend-paying stocks are the obvious choice.
Receiving regular dividends is a great way to make extra income. However, none of us have a crystal ball, so it’s good to keep in mind that there’s always some risk in investing this way, such as if the value of the stock drops or if the company’s dividends are less than you expected.
That said, if you go into this with eyes wide open and follow a strategy that’s in line with the amount of risk you’re willing to accept, investing in stocks can be very lucrative.
As above, we definitely recommend Webull for any stock purchases. Not only do you get that free stock we mentioned, but they ensure that all your money goes towards actually buying the stocks, not towards paying unnecessary fees.
Bonds are a great addition to anyone’s portfolio who’s looking for investments that pay monthly dividends.
This isn’t because of what they pay themselves, which is traditionally quite low. Instead, it’s because of the balancing effect they have on your portfolio.
It’s true that you can make some money from bonds themselves, but the returns are going to be much less than stocks or index funds, which aligns with the fact that they also offer much less risk.
And this reduced risk can be extremely helpful for offsetting the volatility that stocks and even ETFs can offer. This means that investing just in bonds won’t make you much monthly income, but they are a great choice for anyone building a portfolio who doesn’t want their money to be subject to some of the wild swings that the other assets can bring to the value of your investments.
Online investments that pay monthly
These days, there are plenty of online investments that pay monthly. In fact, basically any internet-based business you’ve ever heard of makes money in this way.
And there’s no reason why you can’t do the same. In most cases, it will take you a bit of time to build your audience up to a point where you can earn enough of a monthly income to live off.
But the flexibility and ability to be your own boss involved in earning money in this way makes it clear why these are such popular options.
Related: 37 of the Highest Paying Online Jobs
4. Launching your own site
Managing your own website is one of the best online investments that pay monthly, mainly because there are so many ways to make money off it. It’s also incredibly easy and cheap to set up.
The first step is to pay for a hosting service. I thoroughly recommend SiteGround as they make your website crazy fast, completely secure and are also incredibly cheap. In fact, they’re who we use on this site!
It takes less than 20 minutes to launch a website with SiteGround and absolutely no tech knowledge is required. Better yet, if you sign up with our exclusive link, you’ll be able to lock in a massive discount, paying only $4.95 per month for your site.
5. Social media
If you spend any time on Instagram or one of the other social media platforms out there, you’ve definitely seen posts from so-called influencers where they’re clearly making money recommending products.
The reason they do this is because getting paid to advertise for companies can be seriously lucrative. With just a couple of posts, even a non-famous person can make thousands of dollars in monthly income.
You will have to build your audience up to a point where companies are confident that you’ll get plenty of eyes on your recommendation. But if you find an area where you can make your mark, your social media addiction could quickly turn into a great source of monthly income.
To get some ideas on how to do this on at least one platform, check out our article on how to make money on Snapchat.
6. Flipping items
Flipping items basically involves reselling things for a higher price, usually online somewhere like eBay.
And you may be surprised just how much money people make from this. For example, Rob and Melissa Stephenson made a massive $130,000 in their first year flipping.
This means that if you’re the kind of person who likes wandering around thrift shops or flea markets on the weekend, you could definitely turn this into a monthly income source.
The reason we consider this an investment is because you do need some money upfront to buy the things you’re selling. That said, you need a lot less than you probably think as once you get the hang of it, you’ll find yourself being able to buy very cheap items and convert them into serious profit.
Fortunately for us, Rob and Melissa have released a free webinar that shows you:
- How to see if flipping is perfect for you
- The strategies you can use to get lifestyle freedom from flipping
- Their favorite tips to maximize your flipping profits
Investments that pay interest monthly
Most investments don’t actually pay interest. Instead, they generally pay you through dividends or things like rental income.
That said, there are some investments that do pay interest monthly. And while you may earn more from some of the other options on this list, the investments in this category are perfect for when you need to keep your money in a low risk environment.
This includes, say, if you plan to use the money in the next three years, like for a house deposit. You might also consider safely storing your emergency fund.
In these cases, it’s a good idea to keep the money somewhere where its value won’t fluctuate too much, but where you can still earn some interest to watch your money grow.
7. High interest savings account
Having a high interest savings account to keep the money you may need in the short term is a great idea. It’s secure but also makes sure you’re still earning some interest on your money.
When looking for a high interest savings account, it’s important to ask about not only the interest rate, but also the fees. I’d actually argue that given how many solid fee-free products are out there now, there’s no reason to even consider an account that charges you to keep your money there.
This is one of the reasons why I always recommend CIT Bank. Their Money Market account has one of the highest interest rates in the market, not to mention being completely fee free and secure.
Our pick: Best high interest savings account
Why? Well, because it’s got:
- 0.45% interest (over SEVEN times higher than the national average)
- No fees and only a $100 minimum deposit
- FDIC insured, meaning your money’s safe
8. Certificates of Deposit
A certificate of deposit, or CD, is a product offered by banks and other financial institutions. In exchange for you agreeing to leave a certain amount of money with them for a fixed period of time, they’re able to offer you a premium interest rate.
This means that CDs are a solid option when looking for investments that pay monthly interest.
As with the high interest savings account, you should look for products that are completely fee-free. For this, I recommend you check out the certificate of deposit offered by CIT Bank. As above, their interest rate is among the best you can get and the fact you don’t pay anything for it is just icing on the cake.
Work-based investments that pay you monthly
You may not consider an investment where you have to work to make money as being an investment at all. But the time investment alone should make you think twice about that, not to mention that, in some cases, you do have to spend money in relation to your job to make money.
These have the added benefit of paying monthly income consistently. Not only is this steady money in your pocket, this also gives you the financial flexibility to invest in some of the other options on this list, allowing you to have the time to let them grow to a point where they can also eventually be a reliable income source.
9. Side hustle
Starting a side hustle is a great idea for anyone seriously focused on making more money. Not only are they flexible, being something you can work on whenever you have some spare time, but they also ensure that your main job isn’t your only source of income.
And of course, we’ve all heard the stories of people who’ve earned enough monthly income from their side hustles to replace their main job.
There’s almost an unlimited number of side hustles out there, with your ability to earn monthly income only limited by your creativity (and also maybe how much time you have free). However, as a great place to start to get some inspiration on what’s really possible, check out our article on 7 People Who Make $10,000 a Month Just From Their Side Hustle.
You may consider freelancing and side hustling as the same thing, but there are some key differences.
Essentially, freelancers are those who do work that’s provided to them by a company or individual. Side hustles can include this, but more frequently involve people working whenever they want, not only when someone else decides that work is available for them. A good example of this is starting a blog, as you’ll continue to create content on your own schedule, not someone else’s.
In the case of freelancing, there are tons of great options out there. The main advantage is the flexibility they offer, but the potential earnings are also seriously impressive.
Some ideas you may want to consider include:
- Working as a transcriptionist, where you get paid to type out audio or video recordings to be transcript or captions
- Getting paid to chat as a customer service agent or tech support
- Testing websites on behalf of major companies
- Working as someone’s virtual friend
Earning royalties is usually when a company pays you for an idea that you’ve had that they then bring to market. What usually happens is that someone will design a brand new product or an upgrade to something in an existing product line but won’t have the capacity to manufacture it themselves. This is where the company steps in to pay for this aspect – while also paying you for your idea.
People have made literally millions of dollars doing this, especially when they had an idea but no money to produce it themselves.
This means it if you’ve had an idea for a product that you’re sure a certain company would be keen to sell, take a look at our article on The 29 Best Companies That Pay For Ideas.
However, you can also earn royalties from other creative endeavors, like when you write a book.
Of course, it’s possible for you to get published the more traditional way. This does, however, take time and it’s also worth noting that only very few pitches are actually accepted by publishers.
This is why an easier option is to self publish your book as an e-book through Kindle Direct Publishing. This gives you access to Amazon’s millions of customers worldwide and you retain ownership of the book, plus up to 70% of the sales price.
It takes just five minutes to get your book out there using this method, with some people having reported making upwards of $10,000 a month doing this.
12. Your main job
This is perhaps not the most obvious investment that pays monthly, but don’t forget the monthly income you get from your own job.
It’s true that this may not be an investment in the traditional sense. But I can almost guarantee that you invest a ton of time into this – and that’s not even mentioning those of you who have to spend (tax-deductible) money for your work.
And at the same time, investing in yourself can drive your income up from your job. This is why, for example, you should always take advantage of any new training opportunities so that you’re well aware of recent developments in your field.
You should also use performance reviews as an opportunity to re-negotiate your salary. Many workers think that once they’ve started at a job, unless the company gives them a bonus, they’re looked into the same salary forever. This isn’t true at all though, with companies being very eager to pay (within reason) for great employees.
Finally, it’s good to keep in mind the financial benefit you can get from switching jobs, if it comes to that. It can be comfortable to stay where you are, but research has shown that your salary will go up significantly if you change jobs semi-regularly, compared with if you were stay with the same company for years.
You may also be interested in: 29 Great Jobs Where You Work Alone (That Are Perfect for Introverts)
13. Part time job
Speaking of options where you invest time… taking on a part-time job can also really help to increase your monthly income.
It’s definitely true that taking on a second job can be downright exhausting. But if you need to increase your income and you have the time for this, working an additional part-time job can really help to lighten the burden on your budget.
A good idea is to focus on weekend jobs, like as a server or in retail. You should also keep an eye out for seasonal opportunities, such as near the end of the year when many major retailers take on extra staff to handle the holiday rush.
Real estate market investments that pay monthly income
When looking for investments to pay you every month, real estate is often one of the first options that people think of.
In particular, rental income makes property one of the best investments that pay monthly income. That said, you do often need to pay quite a bit of money upfront to make an income from this-although that’s not always the case.
14. Rental property
There’s a reason that real estate is many people’s favorite investment that pays monthly income. Not only do many people use rental income as a way to pay off mortgages on their investment properties, but they also bank on the price of the property itself going up over time.
At the same time, it’s clear that the biggest downside of this type of investment is the amount of money needed both to buy the asset in the first place, as well as to maintain it.
It’s also important to keep in mind that there’s no guarantee that the property will go up in value. Just ask everyone who was hit hard by the subprime mortgage crisis.
That said, it’s definitely true that property could be a great investment choice if everything works out. Just make sure you do your research and, if taking on a mortgage, only borrow what you can handle.
For those looking to invest in real estate but who may not have the money to buy their own property or who don’t want to bother with managing a property themselves, real estate investment trusts – or REITs – can be a great option.
How they work is that these trusts are companies that own and operate income-generating real estate on your behalf. By buying stocks in these companies, it’s the same as if you were to invest in the real estate they own.
One of the biggest advantages of this is how much more liquid it is compared to owning your own property. That is, if you need the money or simply want to sell, it’s simply a case of selling the stock rather than going through all the trouble of selling a house.
You don’t, however, get to benefit from any increase in value of the properties, as all the money you make from the REIT comes from rent paid by tenants. Nevertheless, for anyone looking for real estate investments that pay monthly, this is a solid option.
16. Crowdfunded real estate
The other way to invest in real estate if you don’t have the money to buy property yourself outright is to invest in crowdfunded real estate.
How this works is that you basically pool your money with other individuals to finance a real estate project. This is usually done by all of you buying shares in a crowdfunding company that owns property itself. Any profits that are made from that property are then given back to investors as monthly dividends.
This could include both rental income and any money made by the company when they sell the property.
There are several companies offering this these days, with BrickFunding being a good place to start.
Airbnb is one of the newer options out there for investing in real estate, but there’s no question that it offers a solid way to earn monthly income.
There is definitely some investing required on your part, including in bringing any listed rooms or properties up to scratch. However, even having your space occupied by someone from Airbnb for just a few days or weeks a month can be a great supplement to your main sources of income.
It’s important to understand what you’re getting into, especially in terms of liability and the insurance that Airbnb offers, because there have definitely been some horror stories. But particularly if you live somewhere that gets a lot of tourists or where people are frequently traveling for events or work, advertising your spare space on Airbnb can be a great way to make a monthly income from this, especially if it would be sitting empty otherwise.
About the author
Anna is the founder of LogicalDollar and a personal finance expert, having been featured on Forbes, HuffPost, Reader’s Digest, MSN Money, Yahoo! Finance, CreditCards.com and many more. She’s committed to helping others get on the path to financial freedom using the experience gained from turning $60,000 in debt into a six-figure investment portfolio. Find out more.