10 Smart Income Generating Assets You Need To Build Wealth

Last Updated June 16, 2024 by Davina Kelly

Looking for ways to build wealth with income generating assets? Whether you want to create financial freedom or generate extra income these assets can elevate your life. 

Investing in assets can make you passive income so you can earn more money without trading your time.

Deciding which asset to invest in can be daunting, especially as a beginner. I felt the same way before I learned how to invest my money. 

From traditional investments like stocks and real estate to creative options like digital products, I’ll give you many different ideas to choose from.

In this post, you’re going to learn the best income-generating assets along with the best assets to build wealth. 

After reading this post, you’ll know which passive income-generating assets are best for you to create freedom and live life on your terms. 

This post is all about income generating assets.

This post may contain affiliate links, which means we will receive a commission if you purchase through our links, at no extra cost to you. Please read full disclosure for more information.

What Are Income Generating Assets?

Before we get into some examples of income-generating assets, let’s first define exactly what they are.

Income-generating assets are investments that produce a revenue stream. Some examples include property, stocks and even personal skills. (I will share over 10 different types in more detail below).

The great thing about income-generating assets is they provide ongoing income which makes them a great addition to your investment portfolio. 

There are many other benefits of income-generating assets such as:

Passive Income

You can earn money without having to trade your time. This can lead to financial freedom and allow you to focus on other areas of your life. You can also make money while you sleep or while lying on a beach. 

Achieve Financial Independence

If you want to achieve financial independence it is crucial to invest in income-generating assets because they’ll help you get there quicker. 

To achieve financial independence you need the income from your assets to exceed your expenses. Once you’ve achieved this you have the independence and freedom to live life on your own terms. 

Increase Net Worth

By investing in assets that produce a steady cash flow and appreciate over time you’ll increase your net worth. This will strengthen your financial security and provide opportunities for further investments. 

Build Wealth

Investing in assets that not only generate income but also increase in value will help you build wealth over time. 

Now that you know what income-generating assets are and their benefits, let’s get into the different types of assets. 

10 Best Income Generating Assets:

1. Property

Property is one of the most popular and traditional forms of income-generating assets. A property is an asset that tends to appreciate over time and it can provide multiple streams of income.   

Here are a few ways you can generate income from property:

Residential Rentals/Buy-To-Lets 

You can purchase a residential property to rent it out and make a steady monthly income. This includes single-family homes and apartments to rent to a family, couple etc

House of Multiple Occupancy (HMO)

This involves renting your property to multiple people who each have their own room. 

Rent To Rent Strategy

With this strategy, you can work with the property owner and make money without owning the property. 

One of the biggest benefits of investing in property is the power of leverage. As a property investor, you can use mortgages to purchase properties which allows you to make greater investments with less capital. 

Let me explain this further with a residential rental investment example. 

Property Price: £180,000 

Your Deposit:  £45,000 ( 25% of the property price)

Mortgage: £135,000 (75% of the property price)

Monthly Rental Income: £450 (after costs)

Return On Investment (ROI): 12% (£450×12/£45,000)

These numbers are for illustration purposes only. I have based it on a property outside of London and used UK property requirements.

By investing £45,000 in this property you’ll achieve a 12% ROI and this is possible because the bank loaned you £135,000. This is the power of leverage.

The earlier you start the more wealth you can accumulate so property is one of the best assets to buy in your 20s. 

Pros: Investing in property allows you to make passive income and build wealth through asset appreciation. 

Cons: There are a lot of costs to consider when making this investment such as taxes, maintenance, insurance, legal fees and stamp duty. If you do your research and mitigate your risks this investment will pay off. 

2. Index Funds & Exchange Traded Funds (ETFs)

Index funds and ETFs are smart investment strategies that involve investing in the stock market. 

These funds track specific market indexes such as the S&P 500 and provide you with broad market exposure. 

So instead of choosing one stock, you’ll invest in a wide range of stocks or other asset classes. With this strategy, you’ll benefit from diversification and minimise risks. 

The great thing about these funds is they have low expenses because they are not actively managed and they generate passive income. 

You can make money from dividends, compound interest and capital gains when the fund price increases. 

This is a great strategy if you want to build wealth and make money without trading your time. 

I started investing in index funds a few years ago and it is one of the best things I’ve done. It has allowed my money to work for me and build wealth. 

Related: How To Invest In Index Funds: A Complete Beginners Guide

Pros: These funds are low risk, help you build wealth and make passive income. 

Cons: As with any investment in the stock market your capital is at risk so ensure you do your research beforehand.  

3. Businesses

Buying or investing in a business can be a lucrative way to generate income. This is because businesses can produce revenue through the sale of goods or services and you can get a share of the profits. 

You can buy or invest in your everyday business whether it’s a coffee shop, dry cleaner, local restaurant or franchise. Or it could be online businesses such as digital marketing agencies and subscription-based services.

It’s the same principle as investing in companies listed on the stock market, but this time you’re doing it directly with the owner. 

By owning a business you have control over operations and strategies for growth. And you can scale operations to increase revenue. 

Another option is to start your own business. This option does require a lot of time and effort but if it is successful it can be a great wealth-building vehicle. 

Pros: You’ll be a business owner and make money from dividends. 

Cons: If you start your own business from scratch it can take a while to become profitable. So if you want to make money fast investing in a business is a better option.  

4. Your Home

Your home can also be an income-generating asset. You can leverage your home and generate additional income via short-term rentals. The most common way to do this is by renting out a room or a portion of your property. 

If you live in a good area close to local transport you can make a lot of money. You can earn extra money passively through rental income. It’s a low-risk strategy and it will turn your home into an asset. 

You can utilise platforms like Airbnb to list your property and attract guests. 

Pros: This is a great way to use your existing space to make passive income.

Cons: You may incur additional maintenance costs but you’ll still be profitable.  

5. Real Estate Investment Trusts (REITs)

REITs are companies you can invest in that own, operate or manage real estate assets. By investing in REITs you can invest in income-generating property without having to own the property. 

These companies are traded on the stock exchange so you can buy them just like you would Index funds and ETFs. The great thing about REITs is they’re required to distribute 90% of their profits to shareholders so you can make a lot of money from dividends. 

There are many different types of REITs you can invest in such as commercial office space, retail store properties, and industrial. 

If you want to invest in property but don’t want to deal with the hassle of getting a mortgage or managing tenants, this is a great option for you. This passive investment approach requires no additional effort on your part. 

Pros: It’s a hands-off approach and you make money from dividends. 

Cons: As with any investment in the stock market your capital is at risk so ensure you do your research beforehand.  

6. Websites and Blogs

Starting a blog can be a lucrative way to generate income. With a blog, you can make money through various strategies like advertising, affiliate marketing and sponsored posts. You can also sell products or services through your blog. 

Blogs have the potential to reach a global audience which means there is plenty of growth potential. With low operating costs running a blog can be highly profitable making it a smart income-generating asset. 

Once your blog is established you can make passive income with little effort, but it does require a lot of work before you get to that point. You’ll need to set your blog up correctly, write posts and get consistent traffic. 

If you want to start a blog and generate income I highly recommend this affordable eBook The Treasure Map To Blogging Sucess In 30 Days. It provides a profitable road map to help you set up your blog the right way and make money. 

If you don’t want to start you’re own blog another option is to buy a blog or website. You can do this via websites like Flippa. 

Pros: It doesn’t cost a lot to start a blog, you can make a lot of money and it is scalable. 

Cons: It will require a lot of time and effort before you can make money so you’ll need to be patient. 

7. Dividend Paying Stocks

Dividend-paying stocks are companies that distribute a portion of their earnings to shareholders. This can be done monthly, quarterly or annually and is a reward to say thank you for investing in the company.

For example, if you invest $10,000 in a company that pays 5% dividends your dividend income would be $500 a year. The more money you invest the higher your dividend income will be.

Typically when you invest in stocks it’s mainly for the capital or income from interest. However, this strategy is focused on providing income from dividends which can provide a steady stream of income.

Most dividends are cash dividends but some companies choose to pay stock dividends. This is where the shareholder will get more shares instead of cash. If you reinvest your dividends you can significantly increase your return on investment and build wealth.  

To find the best dividend stocks to invest in you check out websites like Morningstar or you can simply do a Google search to find a list of companies. 

Pros: This is a passive strategy with the potential to generate a high cash flow and build wealth.

Cons: It can take a while before you make substantial income. 

8. High Yield Savings Accounts

High-yield savings accounts are bank accounts that offer higher interest rates. They’re low-risk and a great way to grow your savings. 

If you’re risk averse and have some cash sitting around you can utilise these savings accounts to earn money from interest. 

Banks are typically known for having really low interest rates but these days you can find savings accounts with 4 – 5% interest rates. 

Online banks tend to offer higher interest rates than high-street banks. You can use price comparison sites to help you find the account that works best for your needs. 

Pros: This is an easy way to earn interest on your savings. All you need to do is put your savings in the account and watch it grow. 

Cons: Your returns will be low, but you can make income from interest consistently.

9. You

Investing in yourself is one of the most valuable ways to generate income and enhance your overall quality of life. As Warren Buffet famously said, “The greatest investment you can make is in yourself.” 

I couldn’t agree more because knowledge is power, and by treating your mind as a valuable asset you can unlock unlimited earning potential.   

When you invest money and time into your personal development you’re setting your future self up for success. This can lead to improved well-being, personal fulfilment and increased earning opportunities. 

You can invest in yourself through education or by learning new skills. You don’t necessarily need to spend a fortune or go back to school to see these benefits. 

If you’re looking for an affordable way to learn new skills I highly recommend checking out Skillshare.

Skillshare is an online learning platform that offers a wide range of classes on everything from coding and writing to productivity. You can try it FREE for 30 days by signing up here. 

You’ll have access to unlimited classes that can help you enhance your skills and boost your earning potential. 

Pros: By investing in yourself you’ll have unlimited return on investment.

Cons: It will take some time and effort but will pay off tenfold.

10. Digital Products

Digital products such as online courses, eBooks, digital art, templates and printables are intangible goods that can be sold online. This option is good for people who want to make money but don’t have a lot of spare time. 

All you need to do is create the product once and you can continuously sell it and generate passive income. So these are great digital income-generating assets.  

It doesn’t cost a lot of money to create digital products and they are scalable. You can sell your products to a global audience without stressing about inventory. 

To get started you need to identify a need in the market, choose which digital product you want to make, and then develop your product. 

For example, if you love baking and people keep asking you for your recipes you can create an eBook to show them how to bake your amazing cakes. 

Once you have created your product you can sell it on platforms like Etsy to help you reach a broader audience. Utilise social media to market your products and attract customers. 

Pros: It doesn’t cost a lot to get started and you can consistently generate passive income. 

Cons: There aren’t any cons.

Frequently Asked Questions About Income Generating Assets

Below are answers to some of the most commonly asked questions about income-generating assets. 

What Are The Easiest Assets To Buy?

The easiest assets to buy are typically those that require minimal capital upfront and can be acquired through a straightforward process. 

These include assets such as high-yield savings accounts, index funds, ETFs and dividend-paying stocks.

Websites and digital products are also good options but you’ll need to put in some time and effort before they can generate an income. 

These assets offer low barriers to entry and the potential for passive income making them a great option for new investors. 

Final Thoughts 

Income-generating assets are essential for building wealth and achieving financial stability. 

Whether through property, stocks, business or digital products these assets can provide consistent income streams and long-term growth. 

Diversifying your investments across different asset classes can reduce risk and increase potential returns. This will allow you to create a robust financial strategy to build wealth and enhance your quality of life. 

I hope you have found this post helpful and now have many income-generating asset ideas. Which asset will you invest in? Let me know in the comments below.

This post was all about income generating assets.

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