invest wisely

Passive Income Strategies: 5 Ways to Invest Wisely

There are a few passive income strategies, which you need to know right now. If you are learning the ropes of solid investment techniques, you would be wise to follow the sage and timeless advice of investment mogul Warren Buffett.  When beginning to invest your money, you want to make sure you are making well-planned and strategic moves.  Here are a few tips to help you invest wisely.

No need to pick and choose

If you are new to investing, choosing stocks individually might not be the best route for you.  You probably will not have the knowledge of the industry or of the companies to predict if the stocks will do well or not.   You would be better off putting your money into an S&P 500 with a 10% cash cushion.  Then just leave it alone and let it do its thing.  This is what Warren Buffett has decided his money will do once he dies.  Obviously right now and throughout his career, he has chosen his own stock options and he’s chosen well.  But, that doesn’t mean he would give that advice to everyone.

“My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I’ve laid out in my will… Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”

Understand the difference between price and value

Many people know that Warren Buffett is a very frugal man.  He is not excessive in his spending habits.  However, he knows that it’s smarter to buy a great stock for a good deal rather than to buy an ok stock for a great deal.  The dividends will win out in the end.  You would be wise to differentiate between price and value.

Warren Buffett has said, “Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

Find diversified options

If you put all your investment in stock in the technology sector, and technology had a crash, all would be lost for you.  However, when you diversify your assets and choose stocks that are varied and located throughout a number of business sectors, you’ll be better off.

passive income strategies

Be in it for the long haul

Stocks are not a game in which you are playing “Minute to Win it.”  In fact, if you can’t look at your stock options with some time attached to them, you might not be ready to be investing.  Warren Buffett said this:

… If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.

Do your research, invest your money and then hold on for awhile because you might be in a for a long ride.

Select a money manager you can trust

This is obviously one of the best passive income strategies when it comes to investing. Your financial manager can’t control what happens to the market and he also can’t control what happens with your individual stocks.  He can control how you portfolio responds in a crisis and he can also help you make decisions that will benefit you well.  When selecting a money manager, be sure to interview in advance to make sure it’s someone you are comfortable with and someone you can trust.

If you are looking for more ways to invest wisely, join our Rebel Investors team.  You’ll receive tips, webinars, and training for investing in the stock market in ways that are truly beneficial. Wade through the various passive income strategies that will help you in the long run.

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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