Editorial Invest in Slovakia
There are several ways to build a passive income that is generated without direct investment in hours worked. In today's second article of the series entitled: How to Build a Stable Passive Income, we'll look at generating passive income through capital gains from investing in the financial markets, as well as other, less traditional forms of passive income.
In the first part series we took a look at building passive income through investing in real estate market in the form of investing in buying property, the reality of crowdfunding and REITs funds. It is REITs that represent a natural transition between investing in the real estate market and investing in the financial markets.
REITs are a type of mutual funds that focus on investing in real estate securities. Let's take a look at other types of funds together, as well as investing in individual securities.
Investing on financial market could be considered the most common choice of people eager to building a passive income. You can either invest through professional management companies, or individually. As an individual investor, however, be prepared for time investment in analyzing the market and individual companies, index funds and other financial instruments, which do not make passive income so passive.
Investing in mutual funds is the most accessible tool for building passive income through long-term Collective investing. Investor in this process represented by a management companywhich invests its money in selected mutual funds.
We know different types funds, from money market funds, through bond funds to equity funds, and of course mixed funds. These are suitable for investors who are interested in earning a higher return that cash or bond funds simply cannot provide.
Risk of mixed of funds is based on Risks of individual securities, usually shares in the fund's portfolio. Investing in funds is recommended for investors with minimum investment horizon of 3 years.
If as an investor own shares in a company, either directly or through a fund, you may consider receive dividends, that is, part of the of the profits of the companies they own. The amount of the dividend is decided by the board of directors of the companies in question, they are paid mostly once every 3 months. The amount of the dividend, or passive income, that flows from the ownership of shares companies depends on the number of shares in the investor's portfolio.
Dividends that are paid to the investor fall under Other capital gains. Dividends paid can either be cashed in or directly Reinvested and used to buy more shares, thus increasing the portfolio and with it the wealth at an ever faster rate thanks to compound interest.
In recent years platforms for so-called peer to peer lendingthat link investors and people applying for credit. They get a non-bank loan and the investors of course, a decent passive income. In the same breath, however, we must also add and mention Risk this type of investing, which is often too high.
Another way, to earn some passive income can be, for example writing a blog or creating videos for a YouTube channel. Many influencers working on social networks can make a nice income, and from several sources at once.
Although many of the of these sources of income could be considered active income, such as advertising with Google Adsense on YouTube, over time, it will also become a passive income, as it also comes from videos that have already been long ago published.
When influencing we'll stay. We can not fail to mention in recent years again very dynamically developing type of passive income in recent years, which is Affiliate marketing. It is a type of marketing that is based on paying individuals who place advertisements for the advertiser.
Passive income is however, is paid not for the display of an ad or link, but only for a visit, or sometimes even conversion on a website or e-shop of the advertiser. Therefore, if you have built a large audience on your blog, Instagram or similar, you definitely take a look at this passive income generation option as well.
So, and that would be from this part of a series of articles on passive income. If you're looking for ways to build passive income, our platform Investment Slovakia, provides you with the possibility of starting your passive income without any fees with a minimum investment from as little as 100 euros.
For more information, please contact us at [email protected].
