If you invested $1,000 in Amazon stock 10 years ago, you would have approximately $10,000 today. However, despite returns of over 850%, investing does not provide passive income. That's because Amazon is not a dividend stock.
Check it out: 10 valuable stocks that could become the next Apple or Amazon
For you: 6 genius things every rich person does with their money
Although you can't earn passive income with Amazon stock, you can earn money by investing in dividend-paying companies that benefit from Amazon's success. The real estate investment trust that is the landlord is one such company.
sponsor: Protect your wealth with a Gold IRA. Take advantage of gold's timeless appeal with a Gold IRA recommended by Sean Hannity.
What is a REIT?
A REIT is a company that owns, operates, or finances income-producing real estate. REITs are attractive securities for investors who want to invest in large real estate portfolios without directly owning the properties. Investing in REITs allows you to earn dividends from real estate without the hassle of property management or the need for large amounts of capital.
Stag Industrial: Amazon Connection
Stag Industrial (STAG) is a REIT specializing in industrial real estate, with Amazon as a tenant. You could argue that an investment in Amazon is an investment in Stag Industrial, but to benefit from the association you must invest directly in Stag.
STAG is a $9.8 billion fund that owns 570 buildings in 41 states. Also, its status as a REIT requires it to pay out 90% of its taxable net income to shareholders.
Priced at $35.22 as of May 3, the stock pays an annual dividend of $1.48 per month, representing a yield of 4.23%. These distributions provide a steady source of passive income not available to Amazon's direct shareholders.
How to start a REIT
For those looking to earn passive income from their Amazon investment, investing in a REIT like Stag Industrial can be a viable option. Because REITs are publicly traded, you can buy shares from almost any brokerage firm, often commission-free.
Details of GOBankingRates
This article originally appeared on GOBankingRates.com: How to earn passive income with Amazon stocks
