Ways to Reinvest Online Residual Earnings

Money/Finances - Personal Finance

By: nomdeplume 09-Jan-2011

Introduction:

So you made payout on your Ehow, Adsense, Listmyfive account. What do you do with the earnings to continue to earn residual income? Well there are many ways to invest the earning in stable solid investments that will continue to offer residual income long after the initial investment.

Solid Dividend Stocks

Investing in stable high yielding stocks is one way of re-investing and continuing to earn residual income from your online earnings. Many solid blue chip stocks yield more than 3% and some even yield higher without much risk regional electricity companies, and tobacco stocks come to mind. Read more about good tobacco stocks in the resources section.

Tax Free Municipal Bonds

If you are in a high income bracket, investing in solid Tax Free municipal bonds can save you money on federal taxes, as well as help local communities make their payments between tax seasons. Make sure to verify the rating of the bond issue before investing. Look for AAA or similar high quality bonds. If you are willing to take more risk, in exchange for higher yields there are some that are near junk or unrated that are worth taking a look at.

Certificates of Deposit

Certicates of deposit are bank products that are easy to get into, have relatively low minimum deposits, and can roll-over continuously at the the then prevailing interest rate. They often have penalties for taking them out before the term ends, so take that into account before investing.

Writing Covered Call Options

Issuing covered call options is a strategy where you sell your interest in a stock for an option price. If the stock meets or exceeds the strike price, the buyer will often call his option and take possession of the underlying stock. Most options expire worthless, and this strategy can be a great way to earn income off your investments. Writing covered call options is not considered overly risky, and it is allowed in IRA retirement accounts. The way you would make this work with your online earnings would be to: purchase stock in a good company, in blocks of 100 shares and then writing the options.

Savings Account

Investing in a savings account is not very exciting, but it is very safe. You will earn some interest if you meet the banks minimum balance requirement, and you will rest at night, knowing that the money is safe. In many cases, inflation will eat away the balance. If you are smart though, you can use high yielding money market accounts to boost yields. Or you can take advantage of promo offers at institutions who are offering great yields to earn your business.

Final Thoughts

My residua earnings have a great deal of variance from month to month so I consider them investment money. I love earning residuals, and use mine to invest in dividend stocks when I get enough saved up to make it worthwhile.

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MiddleSister 4/24/2011
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Mine go right into my 403 b retirement account. Those are accounts available to people in education and the non-profit sector.