Money Management

Passive income is a big buzz term right now, but is there more to it? Here’s why younger adults are so interested in passive income streams. 

In what may be a sign of the times, younger adults are showing a remarkable interest in investing. Online brokerages and investing apps have put the stock market into everyone’s pocket, and people are taking advantage.

But long-term retirement funds and traditional investing aren’t at the top of their minds. According to an MIT AgeLab and Transamerica study, more younger adults report being interested in information about passive income streams (29.4%) than in saving for retirement (23.7%).

As to why this is the case, well, it seems like that’s fairly easy to understand once you know how passive income works.

Passive income 101

Basically, passive income streams are sources of income that earn money without requiring a ton of active involvement from you. Here are a few examples of passive income streams:

High-yield savings accountsSmall business investmentsDividend stocksRental propertyRoyaltiesAffiliate sales

This isn’t to say there’s no effort involved. Most passive income streams require some — alright, sometimes a lot of — upfront effort to establish. But, once they’re earning, they have the potential to earn indefinitely.

Low-effort money and diversification

So, in summary, passive income streams make you money without much effort once established. This alone is enough to make me interested in passive income, but there’s also another aspect to consider: diversification.

Every expert who talks about how to invest and how to build wealth will throw around the word “diversification” quite a bit. That’s because it’s important. A diversified portfolio is one that can weather bumps in the road better than a portfolio that’s too heavily invested in a single asset or security.

Passive income streams add extra diversification to your income, offering additional ways to make money in times of both feast and famine. Taking advantage of multiple passive income streams is even better, giving you a broader safety net than a single salary could provide.

Sign me up! (aka how to get started)

Alright, you’re in. How should you get started? That depends entirely on your existing assets and skills.

Making money from your money

If you have some short-term savings sitting around, make sure it’s in a high-yield savings account. The best accounts are earning 5% or more right now, which is a pretty great return.

Pro tip: If we’re talking about your emergency fund, consider a high-yield money market account for the extra accessibility.

Savings you have beyond your emergency fund can be used to make money in other ways, too. Bonds or CDs can offer decent returns. And investing in stocks that pay dividends can generate quarterly income as businesses pay out to investors.

Making money from your time and skills

If you have some on-demand skills and the ability to teach others, then you could create digital content. Informational courses, videos, and books can all be sold to interested customers through a variety of different marketplaces.

Similarly, you could set up a blog or YouTube channel and earn that sweet affiliate income. Your art can even make you money. Upload photos or videos to sites for sale, or add your designs to print-on-demand outlets.

Keep in mind that these types of income sources do best when you spend a bit of time on marketing. That said, you can still manage a bit of marketing without dedicating too much time to it.

A world of (passive) opportunities

There are a ton of ways to set up passive income sources if you have the money, time, or skills. And that upfront effort can potentially pay off for the rest of your life. So perhaps we should all join that almost 30% of younger adults and start learning more about passive income.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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In 30 years, one report predicts that about a quarter of U.S. homes will face a climate-related home insurance crisis. Find out how you can handle skyrocketing costs. 

This year has seen more serious climate-related disasters than any year on record, and it’s not over yet. Not only do these disasters cause untold damage to people’s lives, homes, and businesses, they also come with a hefty price tag. According to the National Oceanic and Atmospheric Administration, the cost of this year’s high-profile disasters has already passed the $57 billion mark.

A quarter of U.S. properties are at risk from climate disasters

Unfortunately, research from the First Street Foundation that analyzed the risk of wildfire, wind damage, and flooding over the next 30 years says this is just the beginning. It says some properties could become “uninsurable,” while some homeowners will need to pay much higher premiums. On top of that, researchers warn of a “climate bubble” that could reduce the value of your home.

The First Street Foundation says almost 7 million properties have already been impacted by higher rates or canceled policies. By 2053, it predicts that figure will rise to over 39 million properties — around a quarter of American homes. Let’s take a look at the states where home insurance premiums have already skyrocketed and find out what you can do to reduce your risk.

Homeowners insurance has ballooned in these five states

If you search for average homeowners insurance premiums online, you’ll find many different figures. One reason is that rates are changing so quickly — the Insurance Information Institute (Triple I) predicts Florida insurance rates would increase by 40% in 2023.

We’ve used average annual premiums from Insurify’s latest report and predictions for 2023 home insurance below.

1. Florida: $7,788

According to Insurify, average home insurance in hurricane-prone Florida is $7,788 — more than four times the national average of $1,784. The state has been battered by storms in the past couple of decades. On top of which, Triple I says the state’s insurance industry has been beset with fraud and abuse. “Six insurers became insolvent in 2022, while more than a dozen others either left the state or placed moratoriums on writing new business,” it said in a policy brief.

Read more: The Best Cheap Florida Homeowners Insurance

2. Oklahoma: $6,853

Oklahoma consistently ranks as one of the most expensive states for home insurance. Located in Tornado Alley, Oklahoma homes are also at risk from earthquake, hail, and storm damage. Interestingly, the First Street research puts fewer properties in its “insurance bubble” — at risk of higher rates or canceled policies — than many other parts of the country.

Read more: The Best Cheap Oklahoma Homeowners Insurance

3. Louisiana: $5,353

Homeowners in Louisiana are grappling with high premiums for both home and flood insurance. Not only is there a high hurricane risk, low-lying areas are particularly prone to flooding. According to First Street, Citizens Property Insurance Corporation, which is the

insurer of last resort for wind and storm insurance, recently increased rates in Louisiana by an average of 63% across the state year over year.

Read more: The Best Cheap Louisiana Homeowners Insurance

4. Alabama: $5,102

The Council on Foreign Relations highlights Alabama’s weak disaster codes in the face of “growing threats from worsening storms and sea-level rise.” What that means is that building standards in the state don’t offer adequate protection against the type of climate disasters that could hit its properties. Alabama is at risk of flooding, rising sea levels, tropical storms, and hurricanes.

Read more: The Best Cheap Alabama Homeowners Insurance for 2023

5. Kansas: $5,005

Located in Tornado Alley, Kansans also face a high risk of hail, wind, and flooding. The Environmental Protection Agency says there are about 100 tornadoes every year in the state. It predicts summer droughts as well as potential flooding. “Rainstorms are becoming more intense, and floods are becoming more severe,” said an EPA report.

How to reduce your homeowners insurance

Climate change isn’t the only factor pushing up insurance premiums. Inflation and rising costs of repairs and rebuilding homes also play a part. Insurify predicts that homeowners insurance nationwide will rise by 9% in 2023, on top of a 7% rise in 2022. Whatever part of the country you live in, taking steps to reduce your premiums could make a big difference to your bank balance.

Here are a few to consider:

Shop around: Rate shopping can be a great way to score big discounts on your home insurance. Prices can vary dramatically. For example, there’s a difference of around $685 between two of the lowest cost Kansas home insurers on our list. Unfortunately, shopping around may not be an option if you live in a state like Florida or Louisiana where top home insurers are pulling back their coverage.Bundle your insurance deals: Savings vary by insurer, but bundling your home and auto insurance can be a good way to cut costs. For example, Allstate says on its website that you could save up to 25% by buying both home and car insurance from the insurer. If you’re paying almost $8,000 in premiums, that could come to almost $2,000 in annual savings.Consider upgrades to protect against extreme weather: Home renovations can be costly, especially if we’re talking about your roof. But if you live in a high-risk area, see whether a new roof, storm-resistant windows, or storm shutters could either reduce your premium or make you more eligible for insurance.

Even if you don’t live in one of the five states above, your home could be at risk as the weather patterns change throughout the country. Wherever you live, now would be a good time to research climate risks and understand how vulnerable your home may be. That way you might be able to prepare both your home and your budget for potential climate-related disasters.

Our picks for best homeowners insurance companies

There are many homeowners insurance companies to choose from. We’ve researched dozens of options and short-listed our favorites here. Looking for a green build discount or easy bundle policies? Want an easy-to-use interface? Read our free expert review and get a quote today.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Hate the idea of food waste? Read on to see how you can be part of the solution. 

Most of us are familiar with the concept of wasted food. We go a little overboard buying produce at Costco and end up dumping a portion of our haul. Or, we have high hopes for our Crockpot creations only to end up tossing some leftovers at the end of the week.

Food waste happens to the best of us, and you don’t necessarily have to beat yourself up every time you throw a small amount of uneaten or expired food in the trash. But on a national level, food waste is a big problem.

Americans waste an astounding 2.8 billion tons of food annually, while 828 million people go hungry every day. Meanwhile, food waste is costing the U.S. economy $1.2 trillion per year.

It’s for this reason that it’s best to do what you can to eliminate food waste. And one app is making it easier for consumers and restaurants alike to put an end to that practice.

When unused food finds a home

It’s common for restaurants to end up with excess food at the end of a given day. It’s also common for consumers to steer clear of restaurants when money is tight and stick to lower-cost groceries instead. Now, an app called Too Good to Go is working to solve the problem of food waste by connecting consumers to local eateries with excess product on their hands.

The way it works is simple. You download the app and then get to browse by ZIP code to see which restaurants in your area participate in the program. Those restaurants will then list their deals daily based on the amount of product they anticipate having left over.

For example, you might see your local pizzeria advertise a large cheese pizza for 50% off its usual price of $15.99 at some point during the day. You may not be able to swing $15.99 for a pizza, even if that’s the going rate. But paying around $8 may be doable. So in this case, you’d simply sign up for that offer and pick up your discounted pizza at the end of the day.

Should you use Too Good To Go?

There are few nuances you should keep in mind before you get too excited about Too Good To Go. First, the whole point of the app is to allow businesses to unload excess food. As such, you’ll generally be looking at picking up your order around the time a given restaurant is closing. So in the case of our pizzeria offering 50% off, your pizza may not be available to you until 9:00 p.m. or 9:30 p.m., which may be well past when you’d normally serve dinner.

Similarly, in some cases, you won’t know exactly what leftover food you’re getting. A bagel store or bakery that closes at 3:00 p.m. daily might offer what it calls its “leftover assortment” for a 2:45 p.m. pickup. You’ll be told what the price is and, generally, how many items you’re getting. But you might end up with 12 blueberry bagels for 50% off, rather than an assortment of flavors that are more your speed.

Plus, there may be some days when your go-to eateries on the app don’t have leftover inventory to sell. So it’s not necessarily a great idea to count on the app for lunch or dinner. Rather, you need to be flexible.

But if you’re willing to take a chance on what you’re getting and pick up your food at odd hours, you might end up scoring major discounts on restaurant eats. And that way, you can not only save yourself time in the kitchen, but also become part of the solution to the problem of food waste.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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