Financial counselors will tell you that building wealth could be more readily achieved through investments that generate passive income. Simply put, this means that we have to employ means by which the money we have on hand doesn’t stay idle. With the right amount of money, we can put our cash to work and generate income from it. Thereby, growing it and making it work for you over time.
Here are four ideas that could potentially deliver passive income.
Rental Property Investment
In our local setting, there are many modes of generating passive income, but typically the top of mind is buying real estate in the Philippines. Such popularity could be traced to a wide diversity of properties available for investing in various parts of our country.
Avida Land, for instance, offers neighborhoods located not only in Metro Manila, but also in Bulacan, Pampanga, Laguna, Tagaytay, Iloilo, and Cagayan de Oro. Moreover, select Avida properties are in strategic sites within estates of Ayala Land, the country’s largest property developer.
These developments present a wide selection of properties suited as rentals, particularly the condos. Notably, prospective tenants could easily be drawn to developments like Ayala Land Estates, because of the superior quality of life and economic opportunities in and around these projects.
Banks’ Financial Products
Aside from real estate developments, banks and financial institutions offer plenty of windows where passive income could be drawn. Money market fund placements are often favored as these are low-risk, near-cash instruments with shorter holding periods. These choices are better picks than bank savings deposits for those who want to park their money temporarily. Their interest yields of up to about 5 percent compared to the 1.25 percent in some optimum savings accounts.
Investing in mutual funds is another viable mode of generating income with relatively less risk to an investor. This financial product which many local commercial banks offer, pools individual investors’ money for purchase of stocks, money market instruments, and bonds. A fund manager ensures that investors’ returns come out higher than traditional savings banks deposits.
Less risks and regular flow of passive income could likewise be derived from investing in government securities, such as retail treasury bonds. It is available to small investors who can shell out from PhP5,000 up to integral multiples of the same amount. These instruments’ yield is pegged at 6.25 percent interest subject to a withholding tax of 20 percent.
Investing in shares of companies listed in the Philippine Stock Exchange is another potential source of passive income. With the right choice of stocks to invest in, the return on investment could be greater than those of bonds and banks’ financial instruments. The stock market though could be volatile, and losses are a possibility when stock prices go on a downward spiral.
For this reason, the smart investors seeking guaranteed returns opt for a mix in their portfolio largely supported with real estate properties in the mold of those that Avida offers. This developer provides not only masterful home renditions suitable as rental investments, but it also brings to the market properties with a rich potential for future value appreciation that would grow your wealth.
If you’re ready to invest in real estate properties, visit avidaland.com and get to know the different neighborhoods and communities emerging in various parts of the country.