Passive income.are earnings derived with little or no effort required to maintain it. It usually comes in two sources: Rental activity and trade or business activities in which no material participation is required. If the paychecks you receive from your employers are your active income, then your passive income are the earnings from your rental property, royalties from books, dividends and interest income from securities, and earnings from internet activities, to name a few. In simple terms, passive income is making your money work hard for you.
Generating income is a continuous learning process, and it is true even for passive earnings. It took me two years of planning and looking around for the best prices before I bought my first investment property. Why did it take me so long? Because I wanted to find an ideal place that I believe will offer best returns when the time comes that I can lease it. I won't be able to generate any earnings from it until 2014 as it is still on a pre-selling stage, but I'm confident that the decision to buy it will pay off.
Generating income is a continuous learning process, and it is true even for passive earnings. It took me two years of planning and looking around for the best prices before I bought my first investment property. Why did it take me so long? Because I wanted to find an ideal place that I believe will offer best returns when the time comes that I can lease it. I won't be able to generate any earnings from it until 2014 as it is still on a pre-selling stage, but I'm confident that the decision to buy it will pay off.
Investors understand the value of patience when they are dealing with passive income. There are no shortcuts, lest you'd be short-cut, that is cut short from the potential earnings you might have had if you only waited out. It is called passive income for a reason - because you don't have a direct control of where your investments will lead you. Unlike in owning a business, you can actually think of something to drive sales up or serve your customers better. Time is your best ally in passive income because you often have to wait before you make significant returns.
Having passive investments doesn't mean you don't have to take active involvement. I make sure I regularly check on my stocks investments at least twice a week. This enables me to make timely decisions should there be significant developments that may affect my portfolio. For example. I was able to sell off the EDC shares I hold right after the news of a another delay on their income-generating plant came out. I'm not saying I have made the correct decision. For all I know EDC may still post good income figures, but in keeping myself updated I can shift my investment to a new stock where I feel more comfortable. I don't have to wait anxiously and worry if the portfolio I hold will generate good results. I can sleep sound at night because of my stress-free investments!
In the next posts I will discuss how I was able to grow my passive income, and how you can have yours too. Have a nice weekend!
You might also like:
Choosing the Right Investments
How to Read Stocks Quotes
How the Stock Market Works
In the next posts I will discuss how I was able to grow my passive income, and how you can have yours too. Have a nice weekend!
You might also like:
Choosing the Right Investments
How to Read Stocks Quotes
How the Stock Market Works