Doctors are some of the busiest people on the planet. They often work long hours and have little time for themselves outside of work. This leaves many doctors looking for ways to create passive income.
In this blog post, we will discuss some of the best passive income sources for doctors in 2022. Read on to learn more about the most beneficial passive income investments for doctors!
If you’re a doctor who’s interested in passive income investments, call us at 908-464-0400 today to learn more about how you can grow your wealth!
What is Passive Income?
The Internal Revenue Service (IRS) defines passive income as regular earnings from a source other than an employer or contractor. This can come in two forms: rental property, where one does not actively participate but receives payment because they owned the asset at some point; and business opportunities where you’re paid book royalties or stock dividends.
In both situations there will usually be little additional labour needed on your part to maintain them long term – this is what makes it “passive income.”
Why Should Doctors Invest in Passive Income Sources?
One of the many benefits of establishing passive income streams outside your medical practice is that you can decide how much work you do and in what capacity. Having monthly cash flow from these sources will help offset any decrease in salary when physicians cut back on clinical duties or responsibilities, which gives them more time for themselves!
As your alternative income streams grow, it is empowering to choose how and in what capacity–whichever way that suits your life. Financial independence can be a cure for physician burnout. This is something every doctor should explore because of the importance of fulfilling their own personal wants/needs both at work and in their personal life.
Real estate as Passive Income
One of the best passive income opportunities for doctors comes in rental properties. If we wanted to categorize types of passiveness (the amount of work involved), it would fall somewhere between high-end investments like stocks, which require some work but not too many daily tasks or responsibilities on your end, and low active cash flow providers such as CD laddering systems.
Real estate is an excellent way for physicians to generate passive income. However, it can also be their downfall if they’re not cautious! Many people have heard about these money pit properties that always need repairs and have bad tenants coming in like clockwork. Buyers beware when investing your hard-earned funds into this type of business venture.
Real Estate Crowdfunding
Real estate crowdfunding provides doctors with a passive revenue stream, other than personal rental properties, and takes less capital upfront. When you wish to buy an apartment complex or house, it will generally need a minimum of 25% down (you can’t utilize doctors’ mortgage loans in this instance). Not all physicians have access/enough wealth on their own without tapping into family resources; however, there’s no shortage when investing through real-estate financing programs offered by popular websites.
There are a lot of different ways you can invest in real estate these days. You could go through an online crowdfunding platform, which will let your money work with other investors to purchase property from developers and landlords. In such cases, property developers and landlords are looking for capital that they don’t have access to because it isn’t listed on any credit cards or bank accounts available within their network at the time.
Crowdfunding sites are becoming increasingly popular as a way for people to invest in real estate. The returns can be great, but there is always the risk that you will not get your money back until after the sale or refinance of the property has taken place. Unlike typical rental properties where most investors get their capital returned before they have sold off all their shares. It’s important to do research into these opportunities carefully because some offer free meals while others only provide subpar food options at best!
Dividend stocks
Dividend stocks are a great passive income stream for doctors because they offer regular payouts! For example, if you purchase a dividend stock that pays out $50 per share each quarter, then you will earn $200 per year in passive income!
The downside is that dividend stocks can be volatile and their prices can go up or down. This means that doctors need to do their research before investing in dividend stocks!
P2P Lending
With the rise in internet usage, more people are using peer-to-peer lending websites to pool resources and lend money. The borrowers often have bad credit because they need high rates of interest for their payments; however, this can be an opportunity rather than a problem when you consider how much pressure your bank is putting on current customers who want lower fees or higher returns (which isn’t really possible).
With the borrower’s creditworthiness and income being checked, you can diversify your investment across many loans. The interest rate on these types of debt is higher than most other forms because there is a risk that repayment may not happen which means losing principal and profits made from lending money for short periods at 15%.
Such platforms allow investors to invest in pools of borrowers, rather than lending directly. For example, if $10k is put into the platform along with a number of other people then this money will be allocated across individuals who need loans. However, should only some fail it’s still possible for investors like yourself to remain solvent because where others fail still others might succeed!
This might be worth looking into for doctors looking for a more adjustable and stable passive income source than real estate crowdfunding.
Stocks and Bonds Dividends
Stocks and bonds are great ways of generating passive income. They come with more risk than bank accounts or CDs, but in return, you can potentially earn higher rates of return on your investments. This is due to their stability compared to other types of financial assets like a savings account that may lose value to inflation! For example: If I invest $10K into a company paying out 2% dividends per year–I’ll get 200 dollars at the end of the year. However, depending on the year, this may not beat inflation.
Bonds pay out coupon payments rather than dividends, but it’s essentially the same thing–interest received for holding the security. The big difference between bonds and stocks is that with the former you’re guaranteed to receive your expected interest expenses no matter what, while with the latter there could be major changes that would affect how much money comes through at any given time (for better or worse).
Mutual funds can also pay you dividends since they invest in equities and bonds.
If you have a $1 million portfolio, the $10,000 example isn’t as fascinating. If the payment is 2%, you will now get $20,000 in dividends. If you increase that to $5 million, you might earn $100,000 or more each year from dividends and coupon payments alone, without touching the principle. That may be enough to sustain your retirement lifestyle for some physicians out there.
CDs (Certificate of Deposits)
CDs are a great way to build up your passive income without taking on too much risk. You can secure yourself against fluctuations in interest rates by locking away money for set periods of time, and you won’t lose any accumulated principal because the interest will always get paid!
This is the boring but proven way to earn a low-interest rate: put it in the account, don’t touch it. CD’s often offer higher rates of interest than high-interest savings accounts– so if you’re looking for something safe with slow growth then this might be an option worth considering! Keep in mind this will not keep up with inflation.
High Yield Savings Accounts
High-interest savings accounts can be a good way to generate passive income for doctors looking to save money with little effort. There’s no reason not to have a high-interest rate bank account. You may need to go visit a different institution than your current one if they don’t offer them online!
Remember that these types of banks typically provide a better return-on-investment than a regular savings account, so make sure it takes place within an FDI-insured institution. This rate of return may not keep up with inflation.
Sell Your Expertise
As a doctor, you can earn passive income by sharing your expertise with those who want to improve their medical knowledge. One of the best ways to create passive income is by creating a course that will help people learn and profit from it. With sites like Udemy or Skillshare, you can upload your content for them to make money while they enjoy what’s taught within the audio/video lesson itself!
Writing a book is another way to sell your expertise and earn passive income for doctors. Although both of these strategies are not quite passive as many hours will be required to first create the content.
Writing an ebook can be a smart way to take advantage of low-cost publication and even use Amazon’s global distribution to bring your book to multitudes of prospective consumers. Because they rely on your own skills, e-books may be quite short (about 30-50 pages) and inexpensive to produce.
You may swiftly develop the book on an online platform as a medical expert, and then test-market multiple titles and pricing points.
Conclusion
There are a number of ways you can begin gradually replacing your income if working as an MD is not what makes enough money for the family. Passive income streams, such as those mentioned here will allow physicians to spend more time with their loved ones while still fulfilling their jobs and making some extra cash!
So there you have it! Some of the best passive income sources for doctors in 2022. These passive income streams offer a variety of benefits, such as regular payouts, passive cash flow, and little work required! So what are you waiting for? Contact us and get started on your passive income journey today!
FAQ
What is the highest paying passive income?
Commercial real estate is the best way to increase your revenue stream, especially if you have a mortgage. Tenants will pay off that debt while the property appreciates in value. You can also justify hiring a managing firm for day-to-day operations because of how much money it makes!
One of the initial advantages of becoming a property owner is the opportunity to deduct your mortgage interest payments.
Not only can passive income assist you in achieving economic security, but it is also taxed at a reduced rate, up to 20% of your income, compared to regular income, which is taxed at up to 37%!
How can a doctor invest money?
Doctors are allowed to invest in the stock market. There’s no rule against it, and there has been a number who have made their wealth through multiple types of investments including real estate or business as well as investing wisely in stocks.
Any doctor can take advantage by getting advice from experts on what type of passive income investment is the best fit for them.
