Passive incomes

In the previous post we talked about passive incomes, but what are they and how are they obtained?

Online is full of fake gurus who try to sell you courses to teach you how to make a living by opening an e-commerce, buying the right crypto or something else …

I love them and I follow them, but just to have a laugh, if you could get rich with 20 € of course we would all be, right?

Completely Passive incomes

Well, the actual mechanics are different for each asset class. Passive incomes-generating assets for FI seekers fall broadly into three categories of Assets:

  • Rental Properties – Income: Rent.
  • Stocks/Bonds/Funds – Income: Appreciation, Dividends.
  • Royalties: royalty payment

If you have done your homework right before investing then for 20-30 years you should receive your income without any particular problems.

What do I mean by homework?
Let’s say you want to buy a house / garage / premises / shed or what else to rent it.
You should analyze the area, the unemployment rate, the expected economic growth in that region and the depreciation of the property.
Hard? yes
Rental Properties are difficult to value in my opinion and require a lot more capital to diversify and more permits. On the other hand, with an ETF World, diversification is practically immediate. (However, being a globalized world, a problem in China, see Covid, or in Ukraine (see war) has put the world system in crisis).

What is an ETF?
We see it further in any case if you are curious see

If you love music and have a considerable amount of money you can buy music royalties on various sites, such as RoyaltiesExchange or ANoteMusic.

Remember to do homework also before investing in royalties. 😒

Semi-passive Incomes

In this case the concept is that your income is detached from your time, but your commitment is still needed periodically.

  • business activities
  • entrepreneurship (you launch a successful startup, then you sell it and and go on vacation to the bahamas), 
  • sharing economy exploiting (Airbnb, Uber), 
  • blogging/writing/crafting

Even in this case, homework is needed and unfortunately they must be done continuously. If you rent on airbnb every day, week, month, you will need to find new renters. If you start a blog you will have to keep it active and so on …

in any case if your job is not strenuous and you have enough free time, good ideas, passion for something or other that distinguishes you then it can be an excellent alternative or addition to a passive only model.
If you invest € 100 in a blog, (Instagram page or whatever) and all your energy* and after 5 years you are recognized, called to speak and earn enough to quit your current job, then it is a better return than all the actions that you could have bought.

Being an influencer for me falls into this category, because it is more like having a business than being an employee. Also, once you have your hard core of loyal audience it’s usually hard to lose it in no time. And these are safe entries.

What have I decided?

First of all I decided to focus on my main job and earn more than average from it.
Consequently putting all my energy there I have a hard time focusing on anything else (apart from this blog).

Secondly, I studied economics at university and in the next posts I will explain how to create a portfolio that can give you a good return in the long run based on your risk profile. But remember it takes discipline.

So I decided to take the quieter route, with good diversification and that can give you returns even starting with a small amount.
Yes, I’m talking about ETFs, but let’s see them again in future, ok?
In any case, online you will find thousands of guides even better than the one I will create.

Next time we will talk about understanding how much you need to accumulate and how to manage the accumulated assets. To start you must also know the end of the journey.

*Remember, also for big projects in big companies, there are 3 characteristics from which you have to pick 2:

  • Time (Energy)
  • Money
  • Quality

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