October 4, 2023
  • After I was told I was getting a tax refund this year, I decided to see if I could double it by investing.
  • One big thing I want to focus on is creating more products that earn me passive income.
  • I also want to invest more in small businesses, including my friend’s business, and real estate.
  • Read more from Personal Finance Insider.

This year, when my accountant told me the news that I was going to get a tax refund check, I didn’t find myself eager to use that money on a vacation or new pair of running shoes.

Instead, I wondered how I could take some of that money and double it, or put it into different businesses that produce passive income throughout the year.

For the past few years, I’ve become obsessed with figuring out ways to make money so I can eventually become a millionaire, at least by the time I retire. In order to make that happen, I’ve realized that I need to have multiple streams of income.

That’s why I’ve been putting aside money to invest in 2022, and I plan to use 50% of my tax refund to contribute to that effort. Here are the ways I’m making that happen.  

1. Creating products that generate passive income

Over the past few years, the best sources of passive income for my business have been generated by selling online courses. Since 2017, I’ve launched more than 10 courses that bring in a few thousand dollars a month. However, there’s a new course I want to launch in 2022 around the topic of NFTs. 

While online courses can produce passive income once they are created, there’s an initial investment a creator needs to make to get that course up and running as well as marketed to potential students. I decided to put 10% of my tax refund into the development of this course, which will cover the costs of getting the videos and content edited by a professional.

2. Investing in small businesses 

I’ve always wanted to expand my financial portfolio and streams of income by becoming an investor in small businesses. Since I don’t have the capital to invest thousands of dollars into businesses right now, I want to use 10% of my tax refund to invest in three different small businesses. I plan to do this on platforms like Wefunder and Nextseed where you can make smaller contributions as an investor in businesses and get a varying return on your investment. 

3. Investing in real estate 

One of the most common ways to make passive income is to have a money-generating property that you own. Since I can’t currently afford an investment property of my own, I’m still eager to find ways to invest in real estate to earn extra income as a side hustle.

I’ve recently started to invest in REITs, which are companies that own or finance income-producing real estate across a range of property sectors, and want to expand my real estate investments to include individual properties. I plan to invest 10% of my refund into properties using platforms like Fundrise (where you can invest as little as $10). 

4. Using it to invest in a friend’s profitable business

I’ve been an entrepreneur for the past seven years and I’ve been able to connect with so many other people who have launched interesting businesses and side hustles. A friend of mine, who I met at an entrepreneur conference five years ago, has a business that’s been so profitable she’s looking to expand her offerings and is looking for investors. 

While I can’t commit to investing thousands of dollars, I am going to put 10% of my refund into her business for a small amount of equity in the company. Because I believe in the business and have seen the profitability increase year over year, this will likely generate a small payment when she sells the business in a few years for more than it’s currently worth.