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Showing posts with the label passive income

Why REITS deserve a place in your portfolio

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Real Estate Investment Trusts or REITs in short were established as an asset class in the US in the 1960s to provide investors a platform to invest in income producing real estate without directly owning the real estate. The asset class was introduced in Singapore in 2002 with the listing of CapitaLand Mall Trust. Since then, many more REITs were listed both in Singapore and the region and the asset class is widely accepted as a staple for investors looking for income. REITs offer income investors a few benefits to other income producing assets. REITs are generally  granted tax benefits where the distribution is tax exempt if the REIT pays out the bulk of their income, typically 90%, to unitholders. REITs also offer more liquidity to directly buying into real estate, where you can easily liquidate your holdings in the capital markets. In this article, I highlight 3 reasons why REITs deserve a place in your financial portfolio. Photo by Swapnil Bapat on Unsplash     "With the reop

How to create passive income to fund essential to luxury expenses

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Passive income is a key path to financial freedom. While active income allows you to trade time for money, passive income allows your money to work for you. When your passive income outgrows your expenses at some point, technically you are financially free. Sounds simple enough? Source: https://unsplash.com/photos/D3_u5E6E2Hg The challenge for most people is they tend to see passive income as a single source of income. For example, some may invest in dividend stocks and the income from the dividends become a source of passive income. Others may decide to invest in real estate and treat the rental income as a source of passive income. The above is fine, but by concentrating your income stream from a single source, you bear the full downside risk of the asset class.  The recent stock market correction is a good reminder, where a substantial correction in the markets can cause investors to panic. I speak to clients on managing their wealth on a daily basis, most tend to overestimate their

5 Instruments to Build Passive Income

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Dividend or income investing has been gaining traction in recent years, particularly with the FIRE (i.e. Financial Independence, Retire Early) movement amongst the younger crowd to build up a passive income stream towards financial freedom. In this article, I highlight some of the main financial instruments you can deploy to build up a passive income stream for yourself. Photo by Jonathan K├Ârner on Unsplash DIVIDEND STOCKS Dividend yielding stocks are a common tool for building passive income. In particular, companies in more stable or defensive industries tend to give out part of their operating profits in the form of dividends to reward shareholders. Dividend stocks tend to be less volatile than growth counters due to the dividend payout providing support for stock prices. As with all stock investing, a good knowledge of stock analysis will give you a better chance of picking out good dividend counters. REAL ESTATE INVESTMENT TRUSTS (REITS) REITs have been gaining popularity in rece