5 Income Producing Assets You Should Own
5 Income
Producing Assets You Should Own
Today, people are becoming
increasingly drawn towards wealth-building through systematic investments. The
fear of risks has become controlled, especially among younger populations.
Certain income-generating assets are particularly popular among the masses.
Here, we will learn about them.
In this article, you shall have a list of 5 income-producing assets to own.
1. Stocks,
of course
I had to start with stocks because of course. Stocks are the most popular
income-generating assets today. They have attained reliability over time,
especially in the backdrop of institutionalized regulation and economic growth.
This doesn’t mean they are risk-free. Surely they are prone to market
fluctuations, especially in the short term, but research has decisively
concluded that long-term gains from stock investment have been
consistent. Added to this is the fact that stocks do not require any
maintenance, just wisdom on your part as to which ones to pick and which ones
not to.
2. Rental
Properties
Rental properties have been around since forever but they have
surely jostled their way into the mainstream in the past few decades. Airbnb,
for instance, changed the way we looked at vacation rentals. Investment in real
estate is a common favorite but commercialization of the same has been gaining
traction only lately. People purchase the property, rent it out, use the rent
amount to pay off the mortgage or invest it somewhere else, and relax their
time away. However, rental properties require maintenance from your end so you
should be mindful of these extra costs in your calculations.
3. Real
Estate Investment Trusts (REITs)
Now that we are already talking about real estate investments, let us hold on
to the topic a little longer. I mentioned the maintenance part but many of us
won’t like the idea. Either we just hate it or don’t have the time for it.
Then, alternatives need to be found. One such solution is Real Estate
Investment Trusts (REITs). REITs are basically businesses that invest your
contribution in different real estate properties under their management and
distribute returns generated therefrom. You will have to determine the kind of
REITs that suit your taste. Some REITs are characteristically residential, and
others are purely commercial.
4. Bonds
Bonds are becoming quite popular, especially due to the fact
that governments often roll out bond schemes. Bonds, to put it simply, are
loans that an investor gives to a borrower to be returned over a period of
time. There are bonds that require periodic payments to the lender even before
the principal amount is paid back. You will often hear about bonds when
governments announce their schemes. It is a way the government funds its plans
through investment from the public. Many people invest in government bonds
because of the certainty of pay back associated with the credibility attached
to the government.
5. Agricultural
Assets
Historically speaking, agricultural lands have been a major
source of wealth. Investment in agricultural properties is an aspirational goal
for many, especially in agrarian economies around the world. Multiple reasons
attribute to its likeability's such as low volatility and minimal correlation
with fluctuations in the financial market. In fact, governmental schemes are rolled
out to provide compensation to farm owners in exchange for the acquisition of
land. Even so, one can generate income from rental or agricultural produce.