Make Money With An Investment Portfolio

RichardBy Richard
| 2 minutes read

I really didn’t want to have to put this in as it’s oh so freaking unoriginal and boring, but hey it works sooooooo well.

In fact, if you look at your average millionaire, the majority of their income often comes from the dividends and capital gains their investment portfolios spit out reliably every month.

So IF you already have money, this is arguably the number one passive income opportunity on Earth…it’s so simple and the risk-return ratio is pretty good for everyone over 40 years old (for those under 40, you want a bit more risk appetite, or at least a heavy percentage investment in shares).

Since we’re all about passive income though there are some limits on what type of portfolio we should be building.

For shares you should be looking at building up a stake in the index over time, eg through Vanguard index funds, since you don’t need to do anything other than setup a small automatic monthly investment (PS this frequent drip investment method combined with low percentage management fees is essential for eliminating as much risk as possible and ending up with a high after-fees return, respectively).

Two important points…

If you are after yearly distributions you want to get into high yield stocks (corresponding lower capital gains) and you really need to check if your country’s tax system is favorable towards dividend and capital appreciation wealth – eg no double taxing of dividends etc.

Wait till you’re 60 before you even bother looking at it again, but do be sure to reinvest the distributions you get every year (ie dividends).

The alternative to shares, is to simply go for CDs, bonds, term deposits and what not, and enjoy the interest flowing in monthly (which you should once again, always reinvest…automatically).

Best of all, up your contributions into your superannuation since you can specify they invest for you in similarly safe & passive investments and you usually get better tax advantages (obviously differs from country to country).

End advice is mix it up and diversify your sheeeeet and only take on as much risk as your comfortable with and your time horizon allows.

PS as with everything on this site, this advice is purely for information purposes only – you should consult a financial professional who understands your circumstances, risk appetite etc etc before doing anything!