These days, there is a lot of hype surrounding passive investment, which just means that you set something up and then let the asset work for you. These are the strategies where your money builds without requiring you to pay a lot of attention to it. To put it simply, it is a ‘set it and forget it’ strategy. Rather than you working for money, the money works for you. As per Shay Benhamou, since it is low maintenance, it is considered one of the best ways of building wealth. Plus, it can also generate higher long term returns and is less risky.
But, which passive investments should you choose? Some of the top ones that Shay Benhamou suggests you should explore are mentioned below:
- Stocks
If you are interested in growing your portfolio passively, stocks can be a solid option. But, they can also be tricky, so you need to do your own research or seek some professional guidance. How do you choose? Shay Benhamou recommends that you opt for one that has strong leadership, a history of solid growth and strong sales. Also think about future company growth and how much you are willing to invest. You can begin by investing in a couple of stocks initially and then see how things turn out.
- Dividend stocks
These are considered a favorite where passive investment is concerned. It’s the payouts that have made them so popular. Essentially, you are purchasing a system that has already been established and getting paid. In fact, Shay Benhamou says that you can even find some dividend stocks that will pay you on a monthly basis. However, you need to be wary of high payouts because a lot of companies may not be able to sustain such dividends.
- Crypto
Cryptocurrencies have become the talk of town and it is not just individual investors who are going for them. Institutional traders, along with companies like Tesla, Visa and Starbucks have also invested in them. Even if these digital currencies don’t end up replacing fiat currency, Shay Benhamou believes they have the potential of being a long-term investment. You don’t have to invest in just Bitcoin, as there are plenty of alternatives for you to explore. There are some that can even help you make a substantial amount of money with a small investment.
- Real estate
Initially, this might take a lot of time and money, but the results are worth it. According to Shay Benhamou, there are a number of benefits investors can enjoy from real estate investment, like tax benefits, controlling your net worth, or owning a physical piece of land. You have the option of investing in a piece of land for recreational or commercial use. You can also buy and hold it for capital appreciation, or you can just collect rental income from it.
- Commercial real estate ETFs
ETFs are simply exchange-traded funds, which means that they are a group of companies that are combined into a single stock. As per Shay Benhamou, you shouldn’t confuse it with REIT ETFs, as REIT refers Real Estate Investment Trust. This is a company making investments in real estate and then offering their stock and they pay dividends from the rental income they get. In contrast, some ETFs can also offer you quarterly dividends.
The reason why people often go for REIT ETFs is because they end up paying higher dividends and when you are investing, you obviously want to get a high return. The underlying companies in the ETF have to payout a substantial portion of their income. Plus, Shay Benhamou indicates that if you can find some commercial REIT ETFs, you can earn a solid return on your investment for years.
You can explore any of the aforementioned options highlighted by Shay Benhamou when you are looking to make passive investments that can help you make returns with minimal effort on your part.
