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 main concept of passive investment is avoiding fees and drag on the performance that can potentially occur in frequent trading. Passive investment is not an immediate source of income to build wealth in a fast-paced manner, rather it takes a slow process but steady wealth over time. Passive investment is also referring to buy-and-hold strategy, wherein it involves the process of an investor buying a security with the intention of owning it for many 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 strategies in passive investing? 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. 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 obtain passive income through movable rental properties such as machinery, equipment and vehicles.
Interest income are your earnings obtained from lending or your cash deposit in banks. 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 passive income generating sources can be earned through generating blogs and websites through direct advertising, third-party advertising and affiliate marketing.