I had my first experience with the stock market about a year after finishing my university education.(*) I had some money in the bank that was not being productive nor would I need it the first few years. So I started investing by purchasing shares. Though, I didn’t know a lot about the stock market, I still managed to select a few solid companies with a decent dividend payout. (**) The feeling of owning a small share of a company is great. Receiving a small return (=dividend) for it, is even better.
I have the impression that a significant percentage of FI bloggers invest in one specific area. They create a solid stock portfolio, invest in low cost index funds or throw themselves on the real estate market. Of course there are exceptions to this rule.
A solid and valuable advice is to diversify ones stock portfolio so different markets and sectors are covered, hence, reducing the risk. However, why not do the same with your passive income streams. It’s always nice to have a decent income from second and third source in case the stock markets plummets. Therefore, I want to see money coming in from all different angles.
When I initially started to be serious about pursuing financial independence, I had the idea to invest solely in ETF’s. I have the feeling this is the most common/easy approach. This idea quickly expanded because of multiple reasons. First of all, I love the stock market, the analyses and the speculations. It feels great when I’m able to source a company that is underperforming. Second, it has always been a dream to own different rental properties…And I mean, I would be in for the whole deal. Buying, renovating and renting out.
Thus, without further do, these are the different approaches I’m going to attend/attending:
- Dividend investing. Currently, I’m in the process of developing a stock portfolio consisting of valuable and reliable companies which pay out a dividend either quarterly, semi annually or annually.
- Index investing. For my own piece of mind, I’m also investing in a few low cost funds to make sure my asset allocation is spread widely, thus, lowering the risk. At some point I will probably add bonds as well, however, I’m still young and like to take some risks.
- Real estate investing. Ideally, I would like to own at least 2 properties in decent area’s that provide a monthly passive income. I’m currently looking into this area.
- Starting a small company: I can’t explain my thoughts about this topic in a few sentences so I’ll come back to it later.
- And in case the above doesn’t work :
* Technically it was my second investment. I had a first experience with a penny stock. But more on that later.
** For those interested; I purchased 100 shares of Ageas, 150 shares of SBM Offshore and 1000 shares of a penny stock. Different than the above but I’m not able to disclose details about this. What I can say is that I still own it for already 3 years and the future looks bright. I sold SBM Offshore in 2015 with a nice profit after a long period of high volatility and an ongoing corruption case in Brazil.