Financial freedom is everyone’s dream. The possibility of seeing your portfolio grow through passive income that increases automatically, while we may be busy with other activities that have little or nothing to do with increasing earnings.
The concept of “automatic returns”, in a nutshell, is just that: generating profits without having to actively strive for them. Of course, the concept of “automatic” has to be considered in a broad sense. While there is no such thing as returns that generate real benefits with no effort at all, we are talking about activities that have virtually zero impact on our daily lives.
What types of automatic returns are there?
By looking around on the web, you will discover that there are different types of automatic returns, all of which are promising – at least at the starting points – and capable of generating different types of profit for the investor.
Stocks and bonds
The quintessential example of a passive return is financial stocks and bonds, instruments with variable yields depending on the nature of the product, which are used to generate profit based on the performance of their prices on the market.
Although many investors have built their fortunes on these instruments, it is important to note that they are not risk-free. On the contrary, the most promising stocks, i.e. those with the highest return margins, are often also the most volatile on the market. This means that they can generate large profits but also heavy losses, resulting in a capital investment that is extremely dynamic but unable to generate income on a regular basis.
Bonds, the “state” version of stocks, work in the opposite way. Since they are debt securities that the state “sells” to those who purchase credit in them, it is virtually certain that at the end of the contracted term there will be a full repayment of the capital invested, plus a little interest generated by the deposit.
The problem with bonds is that they provide returns with a very low margin, often considered irrelevant compared to the volume of capital invested and the total time of the operation. The result, therefore, is capital tied up for a long time in exchange for a negligible economic advantage.
Royalties and copyrights
In the world of copyright, every intellectual work, whether technical, literary or artistic, is appropriately covered by a copyright or related right. In other words, in return for certain filing operations, it is possible to obtain an economic advantage from the exploitation of one’s own work, its commercialisation and its possible mass reproduction and use.
Although in some cases this operation can be profitable and, indeed, automatic, its limitation is that it is directly related to a major work of creation, against the backdrop of a market that is already saturated with similar products and where it is very difficult to stand out and be successful.
How to create profitable automatic returns and the conditions for their development
In the relm of automatic returns, real estate transactions are currently the most promising and capable of generating considerable profits in a short time, provided that you are making targeted and secure investments.
Real estate income can be an important contribution to generational wealth or, if realised in a structured way, represent a substantial source of monthly income.
In fact, the principle is basically to buy a property with the aim of turning it into income through a monthly rent. This way the operation is developed correctly, generating constant profits over time.
In addition to the monthly rent, the investor will in fact benefit from a basic capital (the value of the property) which will tend to increase over time as the property’s price on the market rises, thus laying the foundations for further gains in the event of future resale.
Clearly, these are theoretical aspects that have to be reflected in practice. Creating automatic passive income is not easy in any sector, and least of all in real estate.
It is important to have a competent structure that you can rely on in order to identify the right properties for such an operation, properties that are aligned with the investment budget, that can easily generate profit once they’ve been put to use and, above all, properties that have a concrete potential value that tends to increase over time.
The experts at Remida Properties work with this type of transaction every day, proposing high-yield US properties to their investors, specifically in Florida, one of the most promising areas today in terms of real estate investments and an area that offers concrete opportunities to those who decide to invest in US territory.
Find out about our operations such as real estate flipping, buying property for rent and renovation, and management of large buildings or real estate structures.