Passive Investments 101: Increasing Awareness and Understanding on Its Benefits in Building Wealth
Passive income such as investing in real estate is one of the many things you can invest on in order to build your wealth. Passive investing is a type of investment strategy aiming to maximize returns on the long run, through keeping the amount of selling and buying to a minimum level. The core concept of passive investing is avoiding fees and dragging on the performance that can potentially happen in frequent trading. Passive investment is not a source of immediate or fast wealth build-up, rather it takes a slow process but steady wealth over time. Passive investment is also referred to as buy-and-hold strategy, wherein it involves the process of buying a security with the intention of owning it for a specific number of years. Investors in passive investments are not after the profit gained through short-term price fluctuations or “time the market”, but rather the positive returns gained in a given enough time.
What are the different passive investment strategies? The types of passive income-generating sources are rental income, real estate, interest income, royalty income, dividend income, membership fees, advertising income, affiliate income, business income, pension income and donation income. Enjoy your vacation locally or abroad but still earn through real estate investments, because these can be leased such as building and office spaces, and you can earn without too much effort. The sooner and the younger you invest on real estate properties, the sooner and the longer you will taste the sweet of this kind of passive income. Rental income can also be obtained through movable properties like vehicles and equipment.
For interest income, you must have enough money in order to gain interest such as your investments in bank deposits and lending to your debtors. Royalty income can be earned through royalty fees by publishing a book, writing a song or being a great singer, from licenses for using software, your photos for being a professional photographer and trademark for franchising. Dividend income is a passive income earned through stocks or shares of a corporation, and it involves a higher risk though. Knowledge, skills and proper attitude will guide an investor to the proper discipline about investing in stocks and other securities. Membership revenues can be earned through golf club, fitness gym, and membership websites that contain useful and unique contents where users or members pay a regular membership fee to be able to access those contents. Your website can earn membership fees in a form of software, applications, podcast, videos, articles and scripts. Advertising and affiliate income can be earned by generating blogs and websites through direct advertising, third-party advertising and affiliate marketing.