Reality of investments on practice

[tsaroz]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

Once they manage doing this first step, then passive income investments start looking more attractive.

Stock and real estate are stagnant at the moment and people have even less options for passive income. An active side hustle would be great but is  not possible for most.
When you have a low paying full time job, you would not be able to get involved in any active venture to earn from your investment. There always are some people that are dealing on job and working extra hours to get things going but for a normal employee that is dedicated to his job, its impossible.
Compounding small savings might seem small in short term, but it would end up being a huge one if you have the patience. Debentures, bonds, Fixed Deposits are not only less risky options, their strategic use means you would have money when you need it.

[_BlackStar]

-snip-

Should we say that a lot of persons do not understand that there are negative business dynamics? because when you see some persons ideas on business is always a certainty of success in a short term without even understanding about profit dynamics and things that could make someone not to make a profit on the things they bought because of management challenges, actually no matter how small the business could be there is a need of inventory so that the business owner will no all the things they have in the shop to be able to no how they are selling and product that's giving profit and most especially to track the sales if another person is managing the business to avoid lost.

Of course - some people don't understand it or may not have reached that stage. Beginners in business are fighters - I mean they are trying to build their future and arrange it well, but when the business management is not good then the success of the business they build may not be achieved according to target or may even go bankrupt. Many new businesses have to close after the first 1 to 3 years - some survive until the first 5 years, but if they are able to manage it well and have the right marketing and management strategies, then development can be expected.

[Raflesia]

Of course - some people don't understand it or may not have reached that stage. Beginners in business are fighters - I mean they are trying to build their future and arrange it well, but when the business management is not good then the success of the business they build may not be achieved according to target or may even go bankrupt. Many new businesses have to close after the first 1 to 3 years - some survive until the first 5 years, but if they are able to manage it well and have the right marketing and management strategies, then development can be expected.

Some things happen that cannot be forced but we must take our hats off to them, especially beginners who continue to struggle and want to try to do their business because they realize that this can be one of the basic things to change the quality of life in terms of finances for the better.
They realize that in the end staying silent without taking action will not have any impact on them.

Regardless of the results, whether they will ultimately fail, it is a possibility that is certainly thought about, but in the end, something like this will not interfere too much with the enthusiasm of the young people because they must realize that it is a form of risk that must be understood.
But on the other hand, this can certainly be minimized by observation and of course learning more about business theory which must be realized from the start because this is an important part of the planning that must be thought about from the start by them because of course it must be understood that before going to war, they must first prepare armor as a form of protection.

[X-ray]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

This is exactly the reason why speculative market such as futures and derivative are huge. It's to multiply profit although also increases the risk.

Most of the time even 10% APR is already good enough, but if you just got like $10k in your bank account you'd become old before becoming financial independent.

Aside from that the most plausible path to take is through compounding, so you increase your income as well as compounding your salary into an investments.

Otherwise if you're tight on budget, the speculative market is the way.

[slapper]

Of course - some people don't understand it or may not have reached that stage. Beginners in business are fighters - I mean they are trying to build their future and arrange it well, but when the business management is not good then the success of the business they build may not be achieved according to target or may even go bankrupt. Many new businesses have to close after the first 1 to 3 years - some survive until the first 5 years, but if they are able to manage it well and have the right marketing and management strategies, then development can be expected.

Some things happen that cannot be forced but we must take our hats off to them, especially beginners who continue to struggle and want to try to do their business because they realize that this can be one of the basic things to change the quality of life in terms of finances for the better.
They realize that in the end staying silent without taking action will not have any impact on them.

Regardless of the results, whether they will ultimately fail, it is a possibility that is certainly thought about, but in the end, something like this will not interfere too much with the enthusiasm of the young people because they must realize that it is a form of risk that must be understood.
But on the other hand, this can certainly be minimized by observation and of course learning more about business theory which must be realized from the start because this is an important part of the planning that must be thought about from the start by them because of course it must be understood that before going to war, they must first prepare armor as a form of protection.

Totally with you that respect is owed to beginners. Most do not have a trust fund or a family safety net, and the fact is that not all people have equal risks. I think the real conversation should be about how we have romanticized entrepreneurship as a personality trait, when it is just a brutal, often inefficient mechanism for wealth redistribution in a society that does not want to talk about safety nets or basic income. When you really want to increase the entrepreneurial survival, you do not teach marketing or management. You create a structural supportthat a bad quarter does not erase three years of work

What is seldom said: studying business theory does not protect you against black swans. Preparation only works if the rules are stable, but the ground shifts: AI arrives, regulations shift, market shifts overnight. You may read as many case studies as you like, but the landscape will always be ahead of the syllabus. Everybody says, "take the risk", but the real challenge is to create a society where risk is not disastrous

It is nice that new people are willing to experiment. It is better if we ask ourselves why we created a system where one has to survive an obstacle course while pretending that "failure" is a rite of passage. Progress appears as the ability to lose a business without losing your future. If we actually cared about growth, we’d optimize for that, not just empty slogans about “fighting”

[aylabadia05]

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

For those who do not have a large monthly income on average, they should not focus on such investments. Simply look for other alternatives that can save the money for the future.
If in one month you can only save hundreds of dollars, in my opinion it is enough to do other appropriate things such as leaving it first until it can be rotated later if it is sufficient to be used as capital.

Maybe in this case I agree that for those who are just starting out, don't focus on non-passive investments first.
If it's a regular dollar per month that can be a savings because it's cold money, I personally will put it in Bitcoin.

[I_Anime]

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

For those who do not have a large monthly income on average, they should not focus on such investments. Simply look for other alternatives that can save the money for the future.
If in one month you can only save hundreds of dollars, in my opinion it is enough to do other appropriate things such as leaving it first until it can be rotated later if it is sufficient to be used as capital.

Maybe in this case I agree that for those who are just starting out, don't focus on non-passive investments first.
If it's a regular dollar per month that can be a savings because it's cold money, I personally will put it in Bitcoin.

To earn some good money in passive investments one have to have enough of cashflow and some average folks can’t afford the amount funds that will give them good return in their investment. That’s why most prefer investing in bitcoin though the risk is higher , but most time is easier to invest in bitcoin compare to others, though you can easily make good return in bitcoin Aslong the cashflow is okay one can definitely get good return is not certain though due to its high volatility and stuff , but we believe as time goes bitcoin will continue to increase value but with some up and down movement though.

But one with enough cashflow that’s into bitcoin investment too, can can diversify their funds in other passive investment like stocks ,  real estate e.t.c.

[aylabadia05]

<snip>

<snip>

But one with enough cashflow that’s into bitcoin investment too, can can diversify their funds in other passive investment like stocks ,  real estate e.t.c.

Because the context is long-term savings made regularly from cold (hundreds of dollars) money. That's why my mind is on Bitcoin only.
If putting the focus on stocks with that amount of money can maximize someone, it's also not a problem, because what I know is that only $100 or $200 dollars every month is not enough to buy property for rent, unless the person buys it on credit or installments.

[Ishicryptic]

Any form of passive investment no matter how small the return is always better than leaving your money under your bed or in the bank to depreciate. We cannot rely on passive investment and income to survive, funds that are channelled into such investments are some percentages of incomes that are gotten from our active jobs  and profits from our active business and investments. It is only a few investments like Bitcoin that I can say will give you reasonable profits on the long term. Relying only on passive income to survive is not a good financial plan because you need to invest a lot of money to be getting reasonable returns to take care of your needs .

[Trout Mask]

Any form of passive investment no matter how small the return is always better than leaving your money under your bed or in the bank to depreciate.

This is why I've always been for (and suggested) dividend investing.

[Salahmu]

Should we say that a lot of persons do not understand that there are negative business dynamics? because when you see some persons ideas on business is always a certainty of success in a short term without even understanding about profit dynamics and things that could make someone not to make a profit on the things they bought because of management challenges, actually no matter how small the business could be there is a need of inventory so that the business owner will no all the things they have in the shop to be able to no how they are selling and product that's giving profit and most especially to track the sales if another person is managing the business to avoid lost.

Of course - some people don't understand it or may not have reached that stage. Beginners in business are fighters - I mean they are trying to build their future and arrange it well, but when the business management is not good then the success of the business they build may not be achieved according to target or may even go bankrupt. Many new businesses have to close after the first 1 to 3 years - some survive until the first 5 years, but if they are able to manage it well and have the right marketing and management strategies, then development can be expected.

You have a thinking of a business specialist and what you have explained is very important and a fact either a business person or newly started person on the process should adhere because business is very important and as we also no it to be a self employed but inappropriate management will be the thing that will not longer make it a successful self employed business, with a good orientation of management the person will understand the kind of planning they will draw for the business. Of course 5 years is a standard range to determine a person capacity and if after then there is no results then the person should no that they have no idea on the business.

[_BlackStar]

-snip-

Some things happen that cannot be forced but we must take our hats off to them, especially beginners who continue to struggle and want to try to do their business because they realize that this can be one of the basic things to change the quality of life in terms of finances for the better.
They realize that in the end staying silent without taking action will not have any impact on them.

Regardless of the results, whether they will ultimately fail, it is a possibility that is certainly thought about, but in the end, something like this will not interfere too much with the enthusiasm of the young people because they must realize that it is a form of risk that must be understood.
But on the other hand, this can certainly be minimized by observation and of course learning more about business theory which must be realized from the start because this is an important part of the planning that must be thought about from the start by them because of course it must be understood that before going to war, they must first prepare armor as a form of protection.

Many people are reluctant to step out of their comfort zone and consider the greater risks involved in building a business. The reasons for each person are different, but generally they seem to be afraid of failure and the difficulty of achieving success in the business they are going to build. So it makes sense if you find a new businessman and are trying hard to build it as well as possible - they deserve respect.

Not all businessmen are those who understand everything when they first start their business. They need to learn and develop themselves, their strategies and various other things until their business runs smoothly. If the trust in the business that is built already exists - then the next step is to develop it to be more advanced.

-snip-

You have a thinking of a business specialist and what you have explained is very important and a fact either a business person or newly started person on the process should adhere because business is very important and as we also no it to be a self employed but inappropriate management will be the thing that will not longer make it a successful self employed business, with a good orientation of management the person will understand the kind of planning they will draw for the business. Of course 5 years is a standard range to determine a person capacity and if after then there is no results then the person should no that they have no idea on the business.

I'm bad - I'm not the business expert you think I am.
It's like building a house - you need to have an idea and a plan and a budget to implement it. Skills, abilities, networking, and mentality can be honed over time as you run your business. The basic foundation is a must when you start - but the determination is on how you develop in improving your marketing skills, expanding your network, and your resilience to various problems or market dynamics. You know that competitors are always there - this is where your mentality is really tested because customers may be interested in new ideas and they will try them.

[HONDACD125]

What makes you think that the profit percentage stays stable? Both of the markets you've mentioned, stocks and real estate, are growing markets, and one wouldn't be getting only 0.6% each month for their investments, considering they know what they are doing and have their money invested in the best places or assets possible. In stocks, you can invest in companies that you know have had a good run in the past, and should be able to get you some returns each month, and when it comes to real estate, depending on the location of your properties, you can have an increase in the income per annum if it's rental, or it will grow in value if you buy and sell.

That being said, both options that you mentioned, stocks and real estate, are usually for those who have enough wealth that they can invest in these so that they at least keep getting something in return instead of having their wealth idle. These investments options are not for anyone in general, especially real estate, because you need a good enough capital to get started with that.

[Japinat]

Any form of passive investment no matter how small the return is always better than leaving your money under your bed or in the bank to depreciate. We cannot rely on passive investment and income to survive, funds that are channelled into such investments are some percentages of incomes that are gotten from our active jobs  and profits from our active business and investments. It is only a few investments like Bitcoin that I can say will give you reasonable profits on the long term. Relying only on passive income to survive is not a good financial plan because you need to invest a lot of money to be getting reasonable returns to take care of your needs .

It’s never wrong to create a passive source of income, but prioritize first your active source of income  because that will define the rate of your life’s survival. And when you think you have saved enough, and has a good amount of spare money, then you can start thinking on how to make your planned passive investment will be.

The best feeling happens when you already have both, and have been enjoying the profits from your different sources of income. That creates a feeling of financial security and independence.

[Raflesia]

Some things happen that cannot be forced but we must take our hats off to them, especially beginners who continue to struggle and want to try to do their business because they realize that this can be one of the basic things to change the quality of life in terms of finances for the better.
They realize that in the end staying silent without taking action will not have any impact on them.

Regardless of the results, whether they will ultimately fail, it is a possibility that is certainly thought about, but in the end, something like this will not interfere too much with the enthusiasm of the young people because they must realize that it is a form of risk that must be understood.
But on the other hand, this can certainly be minimized by observation and of course learning more about business theory which must be realized from the start because this is an important part of the planning that must be thought about from the start by them because of course it must be understood that before going to war, they must first prepare armor as a form of protection.

Many people are reluctant to step out of their comfort zone and consider the greater risks involved in building a business. The reasons for each person are different, but generally they seem to be afraid of failure and the difficulty of achieving success in the business they are going to build. So it makes sense if you find a new businessman and are trying hard to build it as well as possible - they deserve respect.

Not all businessmen are those who understand everything when they first start their business. They need to learn and develop themselves, their strategies and various other things until their business runs smoothly. If the trust in the business that is built already exists - then the next step is to develop it to be more advanced.

Yep, it is undeniable that in the end there is a fear or rather a concern when they try to get out of their comfort zone, the fear of failure is very large but if you don't dare to try then the opportunity could be lost.

Indeed, everything has its own reasons but if they really want to change themselves for the better then they should realize that in the end they have to try to get out of the zone because if they stay in the zone they will only walk in place and will not get anything in the end.
The last part you said is also true where not all businessmen do things right in one moment because in the end it is clearly gradual but that can be used as reinforcement because in the end we must realize that with that they can evaluate themselves because if they succeed immediately and never feel mistakes even though it is good instead it can bring a bigger storm when they find mistakes in one moment because mental preparation must obviously be done in this case.

[l3pox]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

If on average I'm going to get $600 per month out of the $100,000 I have to invest, then that's not low, but it's high for me and I would certainly be willing to do it especially since this type of investment is clear and doesn't lead to fraud.

This means that with an investment capital that is less than the amount you mentioned, I can still get a very decent return for me if I add it up every month until it reaches 1 year. Usually 4 years of investment, I can estimate how much I will get.

0.6% monthly is actually high and annually that would be 7.2%. Traditional banks usually offer less than 0.5%. A monthly passive profit like that is already good.

A 600$ monthly income indeed is low but if you don't touch it and let it accumulate over time or buy an asset that increases value like gold or bitcoin then your profit will become bigger. It's a win-win situation and you secured your future since you both have a savings and an investment.

it depends on the country, though
in Brazil with the second biggest real interest after nominal inflation they're paying 15% per year (1.25% per month) but of course this comes with a price which is the strong devaluation of the currency
if you have dollars you probably don't want to convert it for reais just for this interest, there are better carry trades around

[summonerrk]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

Once they manage doing this first step, then passive income investments start looking more attractive.

I think this approach is not bad, it all depends on what income is in your country. Firstly, in the country where I live, banks cannot provide such interest rates when investing in dollars. 0.6*12 is 7.2 per year, and this is taking into account that this investment is not in some country with a weak economy, where inflation is 30 percent per year. The main question is where to get 100,000 dollars, because this is even problematic for the CIS countries, not to mention African ones.

[l3pox]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

Once they manage doing this first step, then passive income investments start looking more attractive.

I think this approach is not bad, it all depends on what income is in your country. Firstly, in the country where I live, banks cannot provide such interest rates when investing in dollars. 0.6*12 is 7.2 per year, and this is taking into account that this investment is not in some country with a weak economy, where inflation is 30 percent per year. The main question is where to get 100,000 dollars, because this is even problematic for the CIS countries, not to mention African ones.

I know 7.2% per year in usd is quite high for traditional banks but you can find even better rates than that using defi
15% apy is common and sometimes even higher like 30% if you go the stablecoin pools route

of course this comes with a risk but maybe with these new bank apps we will see slightly better options being offered for non technical costumers.

[justinlamode]

I think this approach is not bad, it all depends on what income is in your country. Firstly, in the country where I live, banks cannot provide such interest rates when investing in dollars. 0.6*12 is 7.2 per year, and this is taking into account that this investment is not in some country with a weak economy, where inflation is 30 percent per year. The main question is where to get 100,000 dollars, because this is even problematic for the CIS countries, not to mention African ones.

I know 7.2% per year in usd is quite high for traditional banks but you can find even better rates than that using defi
15% apy is common and sometimes even higher like 30% if you go the stablecoin pools route

of course this comes with a risk but maybe with these new bank apps we will see slightly better options being offered for non technical costumers.

You seem to have forgotten the risk involved in centralised platforms where those investments with huge Apy are done, if you consider the risk, you will rather go with traditional investment. Remember that no platform have been able to create crypto insurance so putting money in these platform is more or less exposing 100% of your money to risk. This is not the case with banks that are backed my insurance.

[TopT3ns]

I think this approach is not bad, it all depends on what income is in your country. Firstly, in the country where I live, banks cannot provide such interest rates when investing in dollars. 0.6*12 is 7.2 per year, and this is taking into account that this investment is not in some country with a weak economy, where inflation is 30 percent per year. The main question is where to get 100,000 dollars, because this is even problematic for the CIS countries, not to mention African ones.

I know 7.2% per year in usd is quite high for traditional banks but you can find even better rates than that using defi
15% apy is common and sometimes even higher like 30% if you go the stablecoin pools route

of course this comes with a risk but maybe with these new bank apps we will see slightly better options being offered for non technical costumers.

You seem to have forgotten the risk involved in centralised platforms where those investments with huge Apy are done, if you consider the risk, you will rather go with traditional investment. Remember that no platform have been able to create crypto insurance so putting money in these platform is more or less exposing 100% of your money to risk. This is not the case with banks that are backed my insurance.

I know why you are worried about the security of centralized investment platforms, particularly, when the prospect of great returns is overestimated. I do believe though that we must make the difference between legitimate fear and super defensive. It is never risk free, whether in the crypto or traditional banking. Is it really worth not taking any action at all because we do not have crypto insurance? Then we will never be able to move forward. What matters, I think, is not avoiding the risk but, to the extent that we can measure and control. Not all but certain quantity of portfolio in this sector can be utilized.

It is not recklessness that compels us to do this, but we know that the world is changing. Banks can deliver security, yet most of them are associated with almost immobile asset growth. We tend to reject any types of innovation due to the fact that this is not a sure bet and we may end up trapped in this sense of comfort zone. And I believe that a comfort zone is not always a safe one in a long term perspective. Unless we put all our eggs in the same basket, then many things are nonetheless there to be explored and we committedly remain in control.