It’s Summer (the earnings season), most of us spend all what we get, but that is not the best approach if we want to make a passive income.. So first of all, there is a rule I like 50/30/20:
50% to priorities
30% to needs
20% for saving and investing
And investing percentage should be increased when earnings increase.
Investing has many ways to go:
1. Real state, if the capital is large enough and you have a stable income that can make you get a mortgage at 3% interest for 30 years..you should choose the location carefully, a live one close to universities and malls to be easily rented..
2. Gold : I only recommend having 5-10% of the portfolio in gold as a hedge from inflation
3. Stocks: Undervalued Stocks to be specific and it should be between 25% to 75% of Portfolio, so let’s say 60%
You should buy each month to have an average price. Never sell at bottom, never buy at the top,
P/E ratio less than 5 for 3 years
P/B ratio less than 1
Increasing net income and revenue
You can read the (Intelligent Investor) for more details
4.Bonds/ T-Bills/ Bank certificates:
This should be between 25% and 75% of portfolio, at average 40%
This type of investment can get you 3-5% per year after inflation at normal conditions..Under high inflation you will roughly get 1-0% after inflation..
Yet this investment is truly necessary as it adds stability to the portfolio and hedges for you if you need money so that you don’t sell your stocks at a loss..
5. Start your own business/side Hustle: we have to make sure that you know you will probably lose at first, till you build a custumer base and reach breakeven point and you shouldn’t start a business in something you never worked in. Eventually you will gain both experience and side-income.
6.Invest in your education:
Getting into a good university or taking courses you need will enrich your knowledge, yet I prefer using books or youtube as it only requires time not money