In this article I talked about the importance of buying and investing in two dimensional assets. If you want to build long-term passive income streams, the reason why I recommend that you buy assets that have capital growth elements or characteristics and income characteristics is because you want your passive income to grow year after year.
You want it to keep up with the cost of living, with inflation or just general increasing in quality of living expenses. And ideally, you want to be earning more passive income than what you spend so that you continuously grow your investment base and continue on earning more money and being even more financially free. Anyway, you guys loved the article and you loved the example that I use, where I compared a term deposit with a diversified share portfolio of industrial stocks and which actually also has a little bit nervous that publishing this, because it was quite a complicated article.
But you guys got your head around it and I was really relieved and really proud of the questions you guys asked and a lot of the questions were about okay. Well great. I we obviously want to build up a share portfolio of industrial shares, but how do we know what stocks to pick? How do we know what industries to look at? How do we know when to buy these stocks? How do we know what to look like? He things look within a company within the reports within the share price, and I want to put all those worries at bay, because people who do this for a little bit being about analyst stockbrokers and professional traders.
Now my blog is designed for everyday people, no matter where you are in the world and from all from levels of experience of financial education. So the good news is you: don’t actually have to do that? If you don’t want to, you, don’t have to pick your own stocks and to be honest for most people. One may simply do not have time to be analyzing different company reports and looking at the share market – and you know talking to people – and you know, rummaging through five different newspapers a day.
There are plenty, as in hundreds of thousands, of different investment options and products available to everyone that they can use to help, build and buy long-term passive income streams that have this two dimensional element of long-term capital, growth opportunities and long-term passive income versus passive income opportunities. Ideally through dividends, and so this is what this article is all about.
So before I launch straight into this, I want to remind you guys: building wealth is not a full-time job. I want you to be every day working or every week working on a little bit of your financial plan, but I want you to be enjoying life. I want you to be spending time with people that you love. I want you to be focusing on building your health and fitness and your you know emotional, mental and spiritual allottee.
I want you to be. You know, spending time progressing on your own career, so building up wealth is not a full-time job. It’s not something you have to completely and utterly like dedicate yourself every single spare minute or hour of the day doing this is something where a slow and steady wins. The race, making wise informed, educated decisions is the way to go. So I’m going to share with you three different investment products that are available to you that match this requirement for long term income and capital growth net assets so option number one is a management, so typically most manage funds are like a retail products.
You buy them directly from a fund manager and their job is to pull everyone’s money together and go out and work out what investments they want in the portfolio, what the goals are of the portfolio. And what is you know, the mix of assets, and it is a great way of build a diversified investment base, particularly with a small amount of money. If you’re starting off some Finnish funds will accept as little as $ 5,000 as as a starting amount and a lot of funders actually allow you to make regular investment plans, for example, you can then in this invest an initial amount of say five thousand rolls, and Then contribute say $ 100 or $ 500 per month on a direct debit plan which is automatic, and that is a great way of taking.
You know your hard-earned precious money and making sure that you spread that risk so that you’re not having to buy only one stock or five different stocks with a thousand dollars each that also. It takes a lot of stress and pressure off your shoulders, because that fund manager is deciding where that money goes, and they have to outline the strategy and the goals behind that they have to disclose where that is that.
That money is actually invested and they also have to report to you and let you know what your unit holding within the managed fund is worth and they also pay dividends to you on a regular basis. Now there are lots of different types of managed funds and different objectives and design for different people with different risk profiles. So you really need to do your research. I will put in the description box below the link that I referred to previously, that helps you work out your risk profile, which can then help you work out, which managed funds you want to buy or which fund manager you want to invest with, but make sure You understand what your risk profile is and that it matches your long-term goals.
The second option for wanting to build up an investment portfolio, that’s well diversified that you don’t need to do your own. Detailed analysis is exchange-traded funds. Now I’ve previously made a article explaining in a bit more detail of what an ETF is, and I will again put that link at the description box below but essentially in each is traded on the market and that ETF is very similar to a managed fund.
But it tends to be a lot more cost-effective, but because it’s traded on the market like a stock, you cannot do a regular investment plan like you can do with a managed fund. But again, an ETF is a great way of accessing. You know with one unit a whole range of different shares that you may not be able to get access to, or a gaming client can’t quite hit that level up with the diversification again just like manage funds.
There are so many different types of ETFs, and every day there are more and more ETFs appearing on the market. You can get the fixed interest based ETF. You can get bonds, you can get Australian share based ETF’s. You can get commodity based ETFs. It really is it like a huge smorgasbord of ETFs that have in Australia, building and already established overseas. So there really is a wide portfolio selection for you to choose from so make sure you do your research and then the third option for building a diversified investment portfolio where you can outsource all those complicated or overwhelming stressful investment decisions is a listed investment company.
Now that is quite similar to an ETF and a managed fund in that elicited, investment company again is traded on the market. On the example, the ASX and you invest in that company. That company then manages the money and picks and runs the portfolio on your behalf. If you want to buy a listed investment into a listed investment, trust oil, implicit investment company, you must buy stocks in them on the stock exchange and predominately most listed investment companies invest purely in shares.
However, some have diversified into other asset classes. So if you’re looking to build up an investment portfolio, that’s just not purely shares there are these options available. So again, always do your research now another quick update on the thousand dollar project. You will see that I have been investing in individual stocks for the thousand dollar project portfolio. I think I’ve probably got between sort of 15 to 17 different companies within the portfolio and for me personally, I really enjoy I’m a bit of a nerd.
I enjoy researching different companies, reading reports and looking for good value in the market. However, my strategy is starting to change. Whilst I’ve got all these stocks that I have picked and choose, and I’ve chosen to add to the portfolio, I am personally starting to add more listed investment companies into the sugar mama thousand dollar project portfolio and that I’m actually going to focus on all new money.
Going forward for the time being, to really fatten up my exposure, because I want more professionals helping manage and run this investment portfolio for me. So this is essentially like a core strategy, so my listed investment stocks will be probably between thirty to forty percent of the overall portfolio. I will then continuously as I choose and as I wish pick the individual stocks and companies that I want to invest in when I see fit or when.
I think this is a great opportunity to buy or what you know, depending on the overall diversification of the portfolio, but I’m really going to focus on incorporating experts and professional fund managers with large amounts of knowledge and experience and training to really help make the sugar Mama thousand dollar project portfolio grow as much as it can and continuously build that passive income, because I’m a big believer in leading by example, showing you guys, because I show you guys successfully you’re more likely to get on board.
And, of course, as you guys know, the passive income from the thousand dollar project goes to a different charity every single year. As long as I can continuously afford to do this, I hope this article helps reassure you that you do not need to become some professional day trader or nerd that immerses themselves and crunches all these numbers all day. It simply does not need to be that complicated.
Definitely look at including in a professional fund manager or an ETF, whether index, tile, ATF or not, or simply a listed investment company to help you run your money and show you how to get your money working as hard as possible for you now. That’s it this article, it’s probably a little bit longer than I actually thought, but, as I said, I will be going and doing more articles breaking down those three different investment options in more detail.
But I just wanted to reassure you that you do not need to be doing this yourself. It really doesn’t have to be complicated and you’re more than capable of creating financial freedom for yourself I bet around, but I will see you later in the week for a lifestyle of and if you haven’t already of course, please subscribe and feel free to share any Of these articles, with your family and friends ciao for now
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