One of my favorite strategies is real estate. Now, I won’t lie real estate is the hardest path to passive income, but it can also be the most rewarding. Take a $180,000 house in Michigan. That property could bring in $1,900 a month in rent, or about $22,800 a year. After accounting for roughly 50% in expenses, you’d still walk away with around $11,400 a year in profit. That’s not chump change. You can also scale up with multi-unit properties. A $600,000 four-unit building could allow you to live in one unit and rent out the others. Instead of paying thousands a month on your mortgage, you might only be out-of-pocket about $1,000. And if you buy a primary residence, live in it for a year, then rent it out, you can secure better mortgage rates while slowly building a portfolio.

If real estate feels too heavy, let’s talk about stocks specifically dividend-paying stocks. Companies like Verizon pay 6.2%, Chevron pays 4.3%, and Merck pays 3.8%. That’s cash in your pocket just for owning shares. The risk, of course, is that stock prices move up and down. Verizon’s price, for example, fell 25% over the past five years. That’s why I like ETFs as an alternative. NOBL pays about 2%, VYM pays 2.6%, and MORT offers a massive 12% though it comes with higher risk since it’s tied to mortgages. If you want to look internationally, ETFs like BYMI (4% dividend) and LVHI (3.6%) can diversify your portfolio, but you’ll face extra risks like currency swings and unstable governments.

The third option is lending money to the U.S. government through treasuries. It’s not exciting, but it’s one of the safest income streams out there. You’re basically collecting interest for letting the government borrow your money. Plus, that interest is usually exempt from state and local taxes. You can buy directly through Treasury Direct or use ETFs like SGOV, which currently pay around 4% annually and even provide monthly interest payments. Just remember: they’re not FDIC-insured.

Whatever route you choose, the key is consistency. I call it ABB: Always Be Buying. Keep investing, keep reinvesting your dividends and interest, and let compounding do the heavy lifting. If you commit to what I call a “decade of sacrifice” 10 years of aggressively saving and investing you can completely transform your financial future.

Now, I’d be lying if I didn’t mention what’s happening in the economy. Banks are tightening lending standards in 2025. Historically, that’s a red flag—it often signals an economic slowdown. It’s something to watch, especially if you’re considering leveraging debt for real estate or other investments.

But here’s the bottom line: passive income isn’t about luck. It’s about discipline, patience, and strategy. Whether it’s real estate, dividend stocks, or treasuries, the sooner you start, the sooner you give yourself a chance at financial freedom.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

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