I was listening to Pat Flynn’s podcast, and I was very happy to listen to episode #174 on how to invest on the episode with Ryan Morgan (listen to the podcast here: http://www.smartpassiveincome.com/how-to-invest-passive-income-from-business) that what he does is essentially the same as my ideas and where I’m going – looking at investing and reinvesting my income yields back into these income investing such that by 20 – 30 years time, the dividends will be massive and provide me good passive income.
Since january 2015, I’ve been researching and looking deep into the area of income investing, where I look for very safe and stable investments that provides ongoing dividends or rental over time – and interestingly, despite me finding evidence that it works – Warren Buffett has this to say about safe investing (he recommends index investing, which is an even more ultra-conservative-and-safe approach to income investing in equity.
My advice to the trustee couldn’t be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S & P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers. From: http://www.marketwatch.com/story/warren-buffett-to-heirs-put-my-estate-in-index-funds-2014-03-13
So what I do is to take whatever budget alloted to me to invest, and to look for good and stable investments that has proven to provide stable and growing returns. These include:
- dividend stocks especially in real estate investment trusts (REITs). Wikipedia defines REITs as:
A real estate investment trust (REIT) is a company that owns, and in most cases, operates income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and even timberlands. See https://en.wikipedia.org/wiki/Real_estate_investment_trust
My REITs and dividend stocks are estimated to nett me about 5 – 8% per annum, which is a much better return than having a physical property, and less work too.
- I also started investing in overseas rental property – started with a single room unit in the city of Melbourne, and after tax, it nets me about 4% per annum rate of return.
Over time, dividends and rental will be reinvested into 2 general groups:
- 50% to other Passive Income Investing
- 50% to build/acquire other Passive Income Internet Businesses
This approach is slightly more aggressive, because my perspective is to create/acquire more and more active/passive recurring income internet businesses that will accelerate my passive income portfolio….BUT I am not THAT aggressive to put 100% returns into passive income internet businesses.
It is more sustainable and scalable for me to put 50% and 50%.
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I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian. Loves good success and freedom.
Learned early in life on importance of making more and entrepreneurship. Started and sold off a business for 7-figures; built another 7-figure one and growing it further, as well as building/investing into other businesses.
I help and consult people how to diversify their income by starting offline or online business to create financial freedom for themselves plus achieve balanced good success in their lives.