Earning income without having to do any work, it sounds too good to be true right? However it’s completely possible, and if you invest your money into the right places you can grow your income just by giving it time. This means you’re free to get on with doing whatever else you want and your cash is steadily growing. Passive investments have gained acceptance as a type of valid investment choice across a range of asset classes, primarily amongst equities and bonds in developed markets.
However there are lots of ways you can go about this. The only snag is that you do need money up front to be able to benefit, and as with any type of investment there are risks involved. But if you research carefully and go about things in the right way, you can turn a sum of money into a lot more with no hassle or hard work involved. Here are a few ideas!
When it comes to growing your income, property is always a smart move. Because it appreciates in value each year, it’s a safe place to invest your cash as you can rent to get capital in the here and now and you have the choice of selling for a profit later down the line. There’s always a demand for houses, people will always want and need them and so whether you want to rent or sell you won’t have an issue. You could look into buying and selling or renting either at home or abroad, you only need to look at things like the hdb resale price to know that there’s the potential to earn a lot of profit. Plus you can hire an estate agent to run everything for you, so there’s no work whatsoever involved for you. They will charge a fee for this, but will sort everything from referencing tenants to chasing up rent, dealing with tenants questions and queries and much more so you don’t need to be involved at all.
There are a couple of ways to make money with business, so if you’re business savvy and have set up companies before, here’s a chance to utilise your knowledge. First would be to establish a new company, since you can hire people for each role and also hire a manager to run everything for you, there’ no work for you. If you have a solid business idea for products or services that people want and can go about things in the right way (such as doing your market research and being aware of any pitfalls) your company will make a profit which all goes to you. There’s no work that needs to be done by you, and as long as you hire the right people things will run smoothly, and your business will earn you money. Another option would be to invest in a smaller firm who shows great potential. You would give them a cash injection to get their business off the ground in return for a share in the company. When they go on to become a success, you get a share of all of the profits they earn. There are lots of great companies out there who simply need some money to get started so you have your pick of who you would like to work with. You can be as involved as you like, you could act simply as an investor or you could mentor them too if you wanted.
High-Interest Savings Accounts
Interest rates have been, and in fact still are being maintained at low levels, this was done in an attempt to stabilise the financial markets after the crashes and recession of previous years. However respectable interest rates can still be found if you shop around, where you can make a decent amount of interest- even in today’s near-zero interest rate climate. High interest savings accounts are considered to be one of the least risky ways to earn passive income, as they offer a far lower chance of losing money when compared to other methods. A time deposit is an interest-bearing bank deposit account. These have a fixed term in which the money must be held, and are a great way to keep your money safe over a number of years. Perhaps you want a pension nest egg, or you want to save money for your child to access when they’re twenty-one. Shopping around, learning how different accounts and interest rates work and fully understanding the benefits of this type of investment will help you to grow passive income. Your money will keep generating interest and by the end will have accumulated a nice sum just for being sat in the bank.
Peer to Peer Lending
Peer to peer lending companies can be considered as industrial-scale online matchmakers for finances. They work by matching individual borrowers or companies with savers, the benefits are that they can cut out the banking middleman so that borrowers can get lower rates, and savers are able to profit. In peer to peer lending, borrowers are carefully selected, and credit checked meaning the risk to you as a lender is reduced. The way your money is split up also makes a difference. Instead of the whole amount you stake being sent to one lender, it’s actually split up and lent to many. This means that if one person stops paying their loan, you only lose out on a small amount instead of the entire thing. The industry became regulated by the Financial Conduct Authority in April a number of years ago, meaning anyone using these service are better protected. The lending website does all of the chasings on your behalf, so there’s no hassle to you and it can be useful if you want to invest over a longer term,
You might be wondering if the benefits of passive investments are transferable to commodities. And due to low fees, simplicity and liquidity, the answer is yes, however, there are some things to bear in mind. Only seven commodities account for a huge sixty-one percent of the index; these are crude oil, natural gas, gold, copper, aluminium, corn and soybeans. This means that investors are essentially ‘locked in’ to the returns of these major commodities which can be an issue, when you consider things like sugar (which has been one of the best-performing commodities this year) has only a three percent weight in the index. However, companies are working on gaining exposure to other commodities (such as energy, metals and agriculture) meaning there will be more opportunity to boost rewards with lower risk.
The good thing about commodities is unlike equity and bond markets; each item has relatively low correlations with one another. So if one type begins to fall, there’s no reason it should affect another which isn’t true for many other types of investment. Unlike the stock market which can be very unpredictable, investing in commodities is much more stable and is a good choice for less experienced investors. There are also various ways to go about it. Take gold as an example; it’s value has doubled in almost ten years meaning it’s an excellent place to invest. You could store the physical metal or use a gold exchange-traded funds. Had you invested twenty thousand a decade ago, you could now sell for forty thousand without the need to have done any work whatsoever for it.
Currency and Crypto
Investing in real life currency (known as Forex) is an exciting place to put your money, but notably cryptocurrencies such as Bitcoin, Cardano and Litecoin are becoming exciting opportunities for investors. It’s now possible to hold various cryptocurrencies and earn a relatively regular return by doing so, however, some can be incredibly volatile which does increase your risk. But this also means it increases your chances of reward too which just one of the reasons it’s so exciting. Mining for your own currency at this stage generally isn’t worth it; this is where you use specialised computer software to crack various codes and access your own coins. It can cost many thousands in equipment as it’s in such high demand, plus electricity prices and the time spent doing it means it’s neither cheap, easy or passive income.
However proof-of-stake currencies can be a good way to go about things, this is where you hold cryptocurrency coins in a staking wallet and earn steady rewards, in exchange for being a node on the network- both supporting the currency economically by buying and holding it. You can sell your stake at any time, however, in many cases, you need to invest many thousands to make it worthwhile. Another option is to hold tokens in a compatible wallet; much like traditional types of stock investments, many cryptocurrencies offer some form of a dividend. If you keep your coins on an exchange, the exchange will probably get the rewards instead of you so ensure you’re using the right type of wallet. Cryptocurrencies can be somewhat complicated to understand at first, and so make sure you’re doing your research and know exactly what you’re putting your money into. What the rewards are likely to be, and what the risks are.
As with any investment, there are always going to be risks involved. This means you have to go about things in the right way and make smart decisions. Done correctly, passive investments offer great opportunities to boost your money in a safe way, and boost your earnings.