How to instantly build 4 new streams of passive income.

An average millionaire has around seven sources of income. To achieve wealth having

multiple streams of income is important. Having multiple sources of income is important but

building multiple income streams is not an easy job. That’s because most of your time is spent on maintaining your first stream of income. That’s your job or your business. And it’s even harder when you have to work long hours and get tired when you get home. It’s not an excuse but we’re all human beings. We have our limits and incapacities and we cannot ignore the fact that our time is limited as well. That’s why I decided to make this blog to show you the best and easiest way to grow your wealth safely and effortlessly.

So how can you easily create four streams of passive income? The answer to this question is simple. You just need to invest your money in four different types of paper assets. And if you do everything right those investments will be consistently putting the money back into your pocket. You can increase your income without any extra effort and you can easily make a lot of money while you sleep. So what are those paper assets? Now I’ll dive into four different types of paper assets that I’ve been using to multiply my money and create multiple streams of passive income. You just need to put your money into these types of investments and then let them do all the work for you.

# ETF’s

Now let me dive into each type of investment in turn so you can see exactly how you can use the money to make more money. OK first of all I’ll talk about ETF.

So what exactly is an ETF? ETF stands for exchange-traded fund an ETF is simply an investment portfolio that contains various types of investments such as stocks bonds or some kinds of funds normally are designed to track the overall performance of a particular stock market or sector. A bond market or even a real estate market. So when you buy an ETF. This simply means that you’re investing in a diversified portfolio that includes several different investments. Exchange-Traded Funds are fundamentally Index Funds that are listed and traded on exchanges like stocks. … An ETF maybe a basket of stocks that reflects the composition of an Index, like S&P CNX Nifty or BSE Sensex. The ETFs trading value relies on the web asset value of the underlying stocks that it represents. Exchange-traded funds in India may be broadly segregated into six categories, they’re — Index ETFs, Gold ETFs, Sector ETFs, Bond ETFs, Currency ETFs, and Global Index ETFs. So when you buy this ETF This simply means that you’re investing in those 30 largest businesses. And the cool part is your money will be diversified and invested in many different market sectors. And that’s the reason why investing in ETFs is the best way for you to build your long term wealth. You don’t need to buy a lot of companies by investing in a single ETF you’re investing in different businesses in different market sectors.

# VALUE STOCKS

The second type of investment value stock. I bet you’ve heard a lot about value investing. So what exactly is value investing? Value investing simply means you buy something worth $2 for only one dollar. Well, not exactly but you get my point here. Value Investing means you buy a company when it’s cheap or undervalued and then sell it when it becomes more expensive or overvalued. So how do you know if a stock is undervalued or overvalued to determine whether the stock is cheaper or expensive? You’ll need to estimate its intrinsic value. A company is undervalued when its intrinsic value is greater than its current market value. Intrinsic value is simply a real value or true value of a business and market value is simply the price at which the stock is currently selling. So to put it simply if the true value of something is greater than the price at which it’s selling this means it’s cheaply undervalued we’re underpriced. So when you buy a stock that’s undervalued. There will be a high chance that its value will increase over the long term and you’ll make a profit. That’s all value investing is about buy something that’s now cheap and sell it later for a profit. Similarly, a company is considered overvalued when its intrinsic value is lower than its current market price. The fact is that not every stock is worth investing in even if they’re blue-chip companies. If you frequently perform intrinsic value calculation, you’ll find that 90 percent of companies you’re evaluating is overvalued. There will be a very low chance that you’ll make a profit if you buy these stocks. And of course, there will be a very high chance that you’ll lose your money if you picked the wrong investment. Now I’m not scaring you but just like any other business investing involves some kind of risks. But some of these risks are controllable and can be easily avoided if you equip yourself with enough knowledge. There are thousands of opportunities to make money in the stock market. There are thousands of stocks out there. So the only thing you need is a real strategy to pick the best ones to invest in.

# DIVIDEND STOCKS

Now I’ll talk about the third source of income dividend-paying stocks investing in dividend stocks is the easiest way for you to profit from the stock market. Dividend Stocks are simply companies that pay good dividends to their shareholders and investors like yourself a stock dividend is an amount paid out by a company usually in the form of cash to investors who hold shares of their stock. So investing in this type of investment is very easy but profitable because you just need to find a good company put your money into it and wait for it to put the money back into your pocket. Most companies pay dividends quarterly. So you can collect the money four times a year just invest in a stock that pays good dividends. And three months later collect the money without really putting in any effort. That’s exactly what dividend investing is about. The most interesting thing about dividend stocks is that they’re a hybrid investment. This means you invest once but you can profit twice.

EXAMPLE: TCS

Suppose a person bought shares of TCS in the year Mar’09. Details are as below:

· March’2009

o Share Price (2009): Rs.132/share.

o No of shares bought: 10 nos.

o The cost paid to buy TCS: Rs. 1,320.

o Dividend paid in 2009: Rs.14/share.

o Total dividend income in 2009: Rs.140.

o The dividend yield in 2009: 10.6%.

Suppose this person held on to his shares till the year 2018. What will be his dividend yield as on Mar’18? [Note: Bonus shares 1:1 was also issued to all shareholders between Mar’09 & Mar’18]

· March’2018:

o The cost paid to buy TCS: Rs. 1,320.

o No. of shares held in 2018: 20 nos. (1:1 bonus share)

o Dividend paid in 2018: Rs.50/share.

o Total dividend income in 2018: Rs. 1,000

o The dividend yield in 2018: 75.7%.

# REIT’s

The last type of investment that we’re going to talk about is right. REIT stands for a Real estate investment trust. Reit is a company that owns multiple rental properties such as office and apartment, buildings, hospitals, shopping malls, hotels resorts, and so on. A real estate investment trust (REIT) is a closed-end investment company that owns assets related to real estate such as buildings, land, and real estate securities. REITs sell on the major stock market exchanges just like common stock. Reit is more like an investment portfolio that includes many income-producing real estates. So when you buy or read this simply means that you’re buying a small part of the portfolio and the cool part is you don’t need to have millions of dollars to become a landlord by buying a single reit. So investing in REITs will bring you a stable stream of passive income and the more interesting thing is that your money is now diversified into the real estate market. Just like investing in dividend stocks investing in Reit’s is very simple. You just need to find a good company. Put your money into it and wait for it to put the money back into your pocket.

· How can I invest in REIT in India?

A new REIT comes out with an initial public offer (IPO) open to investors. You can apply for the IPO, and if your application is accepted you will be allotted units in the REIT. According to the Securities & Exchange Board of India (SEBI) regulations, you will have to invest a minimum of Rs 2 lakh in the REIT

REITs are a great alternative to owning real estate directly. They do have some drawbacks compared to owning real estate directly. But REITs are a natural (passive) way to gain exposure to real estate with very little money. REITs can add solidity and mixture to your overall investment portfolio.

# So how can you start investing your money now?

The first thing you’ll need to do is to make an investment budget. You should save 10 to 30 percent of your current income to invest. You do not require a lot of money to start investing. You may start with small investments of just a few hundred bucks every month and frequently add more money into your portfolio. The more money you save to invest the more wealth you can achieve. To build your investment portfolio, you may allocate your money as follows. Put 40 percent of your money into ETF. Invest 25 percent in value stocks and the remaining 25 percent in some income-producing assets like dividend stocks and Reit’s. Investing in ETF is very important because they’ll bring you a stable long term profit. Make sure that you’ll invest at least 40 percent of your money in this type of investment. Investing in value stocks will help you grow your portfolio faster as well as maximize your profit. If you can master the techniques of value investing you can easily double or even triple your money in just a few months. However, investing in value stocks is much riskier than investing in other types of investments. So if you’re just starting you should not invest more than 25 percent of your money in this type of investment investing in income stocks like dividend stocks and Reit’s. This can bring you a good stream of passive income. This is the easiest way to profit from the stock market. You just need to find some good companies. Put your money into them and collect dividends. You can easily make a few thousand dollars extra every year.

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Author - Mayank Choudhary