We are all feeling the financial strain of the imposed global lockdowns. Even in countries where lockdown measures are being eased, there remains the hurdle of international trade, affecting all industries. It has never been more crucial to diversify your income.
Options like selling bitcoin instantly or unloading stocks are incredibly appealing, although there are a few other options out there that you could also consider. This is the time to build up assets that garner additional income in the long run.There is a great deal of confusion at the moment as to what constitutes a worthwhile investment, and in this sense, it is time to get strategic.
Smart Investments That Can Double Up As Passive Income
It may seem unwise to invest in rental properties at this point, particularly when it comes to commercial real estate. The reality is that the drop in value has created a great deal of opportunity for investment that stands to garner massive profits in the future. With property prices plummeting, you can purchase rental units, both private and commercial, at a fraction of actual market value. Even if you need to apply for a home loan, you will still be able to profit thanks to all-time low property values.
The trick comes in strategising in such a way that you do not need the immediate returns of occupation, holding onto the assets until the economy reaches an upswing. At this point, you will see significant gains. This idea can be extended to investing in REITs.
Real Estate Investment Trusts
REITs are a method of investing in real estate without directly purchasing individual properties. The process is all but self-explanatory. Like any investment trust, your investment is combined with that of other investors. The trust should be administered by a board of trustees with a primary executor. This board of trustees, under the directive of the executor, finds development or purchasing options for large scale property investment.
Because of the buying power of this sort of trust, large amounts of real estate can be invested in with favorably negotiated pricing. You then receive dividends, with the continued option to sell your shares of the trust. This is one of the more lucrative investment trusts in which one can invest but is certainly not the only path to receiving reasonable dividends.
Hedge Fund Investment
Like the option to invest in real estate trusts, other opportunities exist to invest in group investment projects. These include hedge funds, a method by which a group of full-time investors use the funding provided by you and other investors to greenlight attractive proposals. If this sounds a bit risky, it is because it is. The danger inherent in this form of investment is that should the funded projects fail, your money’s gone with it.
Before you allow this fact to put you off entirely, it is worth noting that a good hedge fund manager can quite literally turn your investment into millions, and often billions of dollars. Chris Hohn, considered to be one of the top managers in the game, saw investment return exceeding 14% for 2019, and he ended the year having made a neat $1.7b. It is safe to say that the risk you run is directly proportional to the success rate of the hedge fund you decide to invest in for long term passive income.