Monthly Archives: December 2016
The Advantage of Passive Investing
Many people choose passive investing since they want a hands-off approach to daily management of their business or their portfolio. Passive investing simply means that you entrust someone else or a professional with the daily management of your portfolio. There are many ways in which you can become successful in the world of investments – take note of effective investment strategies. If you want to live an easy life and wanted to reap many financial benefits, then passive investing is the best choice. Many experts agree that the best time to start passive investing is when you are young – doing this will allow you to retire wealthy. It is critical that you start passive investment today if you are over 40 but not over 50 years old. It is very important that you stay positive all the time and that you don’t discourage yourself. Passive investment strategy is the solution for those people who don’t want to become an emotional and financial wreck in the future. It is very important that you think about some few things first before you begin passive investments. It is also necessary that you take the time to study what passive investment is all about before you begin. Reading blogs or online articles that provide tips on how to do successful passive investing is also beneficial.
It is also important for you to know that passive investments can be risky and are exposed to market risk. There are a lot of useful information you can find on the Internet today that will give you ideas on how to reduce market risks in passive investments. Asking for useful pieces of advice from individuals who have experienced passive investing is also very beneficial. It is very important that you are not in a hurry when doing passive investments -take your time.
There are many professionals out there who can help you with your passive investment journey. Before you trust the professional, it is very important that you check his or her credentials first. It is very important that you choose an expert or a professional that is knowledgeable in not only in passive investment but also in triple net properties. Check whether or not that particular professional has received proper training. It’s no secret, if you do passive investing correctly, you and your family will surely become wealthier in the future. Keep in mind to stay positive.
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Great Passive Investing Ideas You Will be Able to Go for
If you are interested about getting an additional income, there are other ways that you can definitely get extra cash aside from going for that part-time job. But, what if you lack energy or time to spend extra hours for such job? Because of this, you need those passive income ideas. There are surely ways that you can make money with little investment of effort and time on your part. An excellent benefit to this is that if you are trying to pay off debt fast, such is really a big help to that. Here are a few passive investing ideas that you can get.
An excellent option is that you invest in the lending club. Probably, there is actually no passive income which is greater as compared to getting interest on the safe investments like treasury securities as well as the bank certificates of deposit. These instruments do pay paltry returns that is less than one percent. It can be passive income to the finest but you will never be able to relax on returns which are that low.
This is why it is really a great time that you go for the lending club. You must know that there is peer-to-peer web-based lending platform wherein the individuals are going to get loans and the investors would provide funds for these loans. Definitely, the lending club offers an opportunity to earn the interest rates in the excess of 10 percent a year and such is around 10 times of what you would earn on the conventional interest-bearing investments.
Opting for index funds is also a great idea that you can have for passive investing. You should know that the index funds are a type of mutual fund which provides you a way to invest in the stock market that is passive. For example, when you would invest money in the index fund, based on the S&P 500 index, this means that you would go to be invested in the general market and you don’t need to be connected with choosing investments and rebalancing the portfolio and know when you purchase or sell individual companies.
When you have such passion for photography, you can put the photography to work on the web. When you like this, you may convert this into passive income source. You should know that photography sites provide you with the platforms in which you may sell the photos. They can provide you with percentage fee or flat fee on each photo sold to the client. This means that a single photo may represent a passive income opportunity as this can be sold again and again.
These are some of the passive investing opportunities which you can opt for. With these options, you can make money.
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Misconceptions In Passive Investment
There’s a huge amount of false information that has been circulating regarding active and passive investment. That’s to be expected for a debate that’s been raging for quite a long time. Aside from that, there is also much on the line from salaries of fund managers to retiree’s savings. What’s unfortunate for the investors is that, it isn’t possible to try other investment opportunities. Instead, it is requiring a great deal of great deal of analysis and research to choose a strategy. Regardless if you are rooting for active or passive, it is extremely important that you make yourself aware of the facts from fiction in order to come up with a well informed decision to how you can invest your hard earned money in the best way possible.
To help you refine the debate between these two subjects, here are some facts that can clear up your doubts in passive investment.
Number 1. There is no action – if just passive investing is that simple to the point that you just need to place money in index fund and wait for all money to roll in. The truth is, passive investors can work as performers of portfolio observation, discipline and construction.
The action starts by allocating money strategically among the varieties of asset classes that help in attaining long term financial goal when developing a portfolio together with passive investments such as index funds. If those allocations change, more action is to be found with the passive investor particularly to those who rebalance their portfolio diligently by making trades return to assets back in their original level.
Number 2. Passive investing attains returns that are below market averages – yes this is true mainly because of the cost but, average returns are in eye of investors. The index funds seek to replicate market index so by that, even if they do so accurately, it’ll be below average for net of fees. On the other hand, index funds normally have lower costs compared to active funds meaning, they have better probabilities of getting near market averages for a long period of time.
In addition to that, active funds charge higher fees for personnel to carry out research and trades which eats away at returns as well as contribute to abysmal historical record to match or beat market averages.
Number 3. Passive investing is deemed as cookie-cutter strategy – due to the reason that passive investment is not managed tactfully to change with market swings or to take advantage of future events, many detractors of it believe that it can’t beat active investment. Actually, there is a benefit from uniformity of passive investing because the same strategy may be applied from one investor to the other.
Investing in a Passive Way
Passive investment is considered by some as the laziest investment plan, a couch potatoes plan and other negative description about this investment. These investors have overlooked the fact that passive investment can also gain good rewards after time as long as being managed carefully. It is a fact that passive investments do not have the glamorous stock picking methods as the active investments, but its rewards could surprise investors who are seasoned in this field.
The one tool that is said to save an investor from going into a financial and emotional turmoil when the stock market crashes is passive investment. In order to get extra money, investors would usually look and buy the best investment opportunity out there. But investors also fail to see the other side of purchasing several investments, keep them on a longer period and thus help maintain their stocks position on the right direction.
When dealing with passive investments, it does not imply that you buy and forget about it all together. Re-balancing your portfolio and keep companies performing better under control are some of the things you can do when you have passive investments. Your financial portfolio will be enhanced if you still get professional help to decide your investment goal, even if you seem to be an expert in your passive investment. Determining your investment goal, knowing how much you would like to earn from such investments, and deciding how much you are willing to invest to reach your goal, are some of the things you have to do.
As in any other investments, passive investments are also exposed to market risks. Understand though that passive investment does not make your portfolio a fail proof investment and the future does not hold the same outcome. What one should think about before investing in some investments are that if these are available at lower rates, if it gives better tax benefits, and if these have the styles that can help you earn more over a longer period of time.
Before you make the decision on the type of investment you want to go into, it is advisable that you talk to an advisor to help you decide the best investment plan for your needs.
Generating income through passive investment can be obtained in some ways. Ways and opportunities in consideration to safety, profitability and liquidity have to be weighed in too.
Both investment and income are considered in the meaning of safety. What could affect your investment are changes in market condition, economic slowdown and social unrest. Whatever is the circumstance, the income from your passive investment should always be there so that your investment is safe.
Another significant factor when you choose an investment is the liquidity of the investment.
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Passive Investing 101: Understanding the Advantages 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 basic concept of passive investing is avoiding fees and dragging on the performance that can potentially happen from frequent traditional trading. Passive investment is not for quick returns, rather it takes a slow process but steady wealth over time. Passive investment is also called buy-and-hold strategy, wherein an investor buys 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 different types of passive income are real estate or rental income, 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. The younger you invest on real estate income, the sooner and the longer you will taste the sweet of this kind of passive income. You can also earn passive income through movable rental properties such as vehicles and other equipment.
Interest income are your earnings obtained from lending or your cash deposit in banks. Royalty income can be earned through royalty fees paid by those who are interested with your talent such as by publishing a book for being a popular writer, writing a song or being a great singer to earn music royalty fee, from licenses for using software, your photos for being a professional photographer and trademark for franchising. Dividend income if managed properly can minimize the risks involved in dividend income earned though stocks and shares of an ownership of a corporation. 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. Your website can earn membership fees in a form of software, applications, podcast, videos, articles and scripts. Advertising and affiliate sources of passive income can be earned by generating blogs and websites through direct advertising, third-party advertising and affiliate marketing.