Understanding the Benefits of Passive Investments
Passive income such as real estate investment is one of the key factors that an individual can gain 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 main concept of passive investment is avoiding fees and drag on the performance that can potentially occur in frequent trading. Passive investment is not for quick returns, 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. Passive investment investors are not after the profit gained through short-term price fluctuations, also known as “time the market”, but rather the positive returns gained in a given enough time.
What are the strategies in passive investing? The various sources of passive income are rental income, real estate, interest income, royalty income, dividend income, membership fees, advertising income, affiliate income, business income, pension income and donation income. Real estate properties can be leased such as building and office spaces, so you can earn without too much effort. In order for you to achieve this kind of passive income, you have to acquire properties, so you need to invest in real estate properties as soon as possible. You can also earn passive income through movable rental properties such as vehicles and other equipment.
For interest income, you have to work harder and frugal to have enough money in order to gain a considerable high interest such as your investments in bank deposits and lending to your debtors. Royalty income can be obtained though royalty fees by publishing a book, being a songwriter 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. In dividend income, an investor must be guided by the right knowledge, skills and attitude to the proper discipline about investing in stocks and other securities. Membership fees can be a source of revenue such as in 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. The contents of 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.
Source: http://www.moneysoldiers.com/want-to-make-your-property-investment-a-bit-safer-heres-how/