Low cost index funds provided a 16% return in 2020 and require nearly zero effort.
If you're in your twenties and thirties, it is absolutely worth scrimping and saving to put as much as possible into a retirement account that tracks the S&P 500, or the worldwide stock market, because this is the single surest way for "normal" people to retire rich.
I don't have much of a better idea tbh but I'm always seeking alternative investments.
https://investor.vanguard.com/mutual-funds/profile/VTWAX
If you don't want to dump $3K in one go, there's VT:
Dividends or rent collection qualify as passive income.
This means $100/mo of recurring, passive income would take $40K in the bank to replace.
Even a small passive income is worth huge amounts.
Best for me is EU crowd funding sites for real estate. Typical yield is 12-20%. So called "Hard money". Banks in europe don't touch this after the 80s blow ups.
Nexo - popular in the crypto world takes the funds and puts them there (but keeps 2-3%) as well as payday loans for eastern europeans.
Capital gains are taxed at 20% and can be offset against personal losses, whereas dividend income is typically taxed at 32.5 - 38%, and that's after the company issuing the dividend already paid corporation tax of 19% on their end.
Most people get away with doing this because they use tax sheltered accounts, or the amount would be below their tax-free allowance.
Ref: "Accumulation units – the income tax loophole that never was" - https://monevator.com/income-tax-on-accumulation-unit/
From what you say, dividends seem like a negative thing taxes-wise, so why would any company opt pay them out? I’m sure there’s some intricacy there.
More technical reasons follow.
The risk profile is very different. Rents, dividends, and interest payments all have some notion of a guaranteed payment. Your risk is primarily whether your counter party will be able to honor that agreement. This is why bond investing is often called "fixed income" because you know ahead of time how much money you'll make.
Asset appreciation has immense market risk. You need to find a buyer willing to pay more for what you paid for it. In the case of companies the economic risk are higher too: if the companies cashflows dwindle or debt increases the shares are fundamentally worth less.
This is why there are often tax distinctions between guaranteed income streams and capital investments: in theory, a government wants to encourage investment in risk and discourage printing guaranteed monthly checks. This does create a regulatory arbitrage, however, where companies can buy fixed amounts of their own stocks to guarantee some amount of appreciation in lieu of a dividend.
Still, it is a good option if your finances allow.