Easy Money: Many Ways of Passive Investment Guarantee a Steady Source of Income with Little Care

The photography editor at Lider, Ratko Mavar, has been selling some of his photographs on specialized digital platforms designed for purchasing such works for several years now. He started modestly, with a few specific photographs he took quite by accident, as he says, 'for his own enjoyment', and today he already has his portfolio on those platforms. It was not easy to become a member of such a platform, or to get onto it. He had to, he says, go through a proper written test, and once he satisfied that, his photographs had to pass a quality test. But once all that was done and Ratko became a full-fledged member of the community, his photographs, which he would have taken anyway, sparked the interest of buyers and began to bring him income, and that is passive income.

– The price of photographs on those platforms ranges from thirty cents to five dollars, so in a few months, a sum that is not negligible accumulates. It is not income that would allow me to live solely off of it, not by a long shot, but it is not an amount that can be dismissed, especially since I did not exert myself too much to earn it – emphasized Ratko.

A Studio Apartment is Better than a Bank

Since the management of one’s own capital and the desire to acquire wealth by enhancing that capital are highly developed in the world, various methods of investing have also been developed – active and passive. Active investment is one where we must invest both knowledge and time, really put in the effort, such as investing in specific stocks or a share in a company where we are actively engaged in the business. But there is also a simpler way of investing, at least at first glance – passive. It brings income without us having to work ourselves to the bone. Like the passive income that Ratko earns. It may seem strange and foreign, but you might be a passive investor yourself without even knowing it.

My friend Robert thought I was somewhat mocking him, despite our years of acquaintance, when I asked him what it feels like to be a passive investor. He is a perfect example of a passive investor because he bought two apartments for long-term rental.

Such passive investments in real estate will not go out of fashion anytime soon, especially while negative interest rates persist, believes Boro Vujović, director and founder of the real estate agency Opereta. Neither in the world nor here, where investments are traditionally made in apartments, houses, weekend homes, and vacation rentals.

– People most often invest in studio apartments, smaller one-bedroom, or at most two-bedroom apartments in Zagreb for rent. We notice that institutional players from abroad are now also investing in apartments in the capital. Such investment is much more profitable for them than keeping money in the bank and paying fees for that service – stated Vujović.

A Little Effort is Necessary

That is precisely what passive investing is: a one-time investment that guarantees a steady source of income, not requiring you to meddle excessively with that asset or service, whatever it may be, or to worry about it. However, passive does not mean that money comes in without you lifting a finger. Such a thing does not exist. Not yet. Passive investment still requires some kind of effort, at least at the start. If nothing else, at the beginning, you need to 'cash in' something or create some service or product alongside it. Additionally, it takes some time for a passive investment to start generating money. It does not happen overnight. And not all passive investments are the same: some offer quick and regular income, while others require a larger capital investment at the beginning that only later yields a greater dividend or income. Part of such investments depends on market whims, but the most important thing is for everyone to find the right balance between risk and reward for themselves.

What other ways of passive investment exist can be read in the printed or digital edition of the business weekly Lider.

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