How we are building a new side income for 2023

Young female business analyst looking at graph charts while working from home

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I’ve been investing in stocks and stocks since 1986-87, when I was a freshman in college. Starting with almost nothing, my goal was to turn a small income into a large amount of capital. So over the past 35 years or so, my wife and I have accumulated stock holdings. But now is the time to think about turning this extra capital into a second income.

4 forms of secondary income

As a freelancer, the easiest way for me to make extra income is to get more clients. But the problem with this working income is that when I stop working, I have no income. Therefore, I prefer passive income — income that comes without extra work or effort.

Alternatively, you can deposit a lump sum and collect the savings interest from this pot. But even top-tier savings accounts pay only 3.5% annually on deposits. And I know very few people who have become rich with cash.

A third option is to buy government and corporate bonds. These bonds pay a fixed interest rate and return my capital when they mature. For example, a 6-month US Treasury bond pays a fixed interest rate of 5.13% per annum (one of the safest investments).

However, buying bonds as an individual investor can be cumbersome and complicated. However, if I were a safety-first investor looking for a low-risk product, quality bonds would definitely be on my radar today.

A fourth option is to purchase an investment property by depositing a deposit and obtaining a buy-to-rent mortgage. We were then able to rent this house out to tenants and profit from the net income after deducting expenses. But I really don’t like being a landlord, especially after hearing horrible stories from friends in this field.

My top choice for lifetime passive income

My favorite way to earn income from capital is to buy stocks that pay dividends.but the company dividend These cash payments can be reduced or canceled at any time as they are not guaranteed. To reduce risk, I spread my pot across different companies and sectors.

In my view, the British elite FTSE100 The index is full of quality companies with undervalued stocks and decent dividends. As such, my wife and I have invested heavily in these cheap stocks. In addition to dividend income, we aim for long-term capital gains by selling shares and gaining profits.

A look at Footsie today reveals a wide range of bargain purchases in areas such as wealth management and insurance, banking, oil and gas, mining, and telecommunications. In some cases, these stocks have dividend yields of over 7% a year, with at least 20 of his Footsie shares paying 5% or more a year in cash.

But is it realistic to generate substantial side income simply by relying on UK blue chip stocks? And I think that’s right. oh!

In summary, based on current progress, this new passive income is expected to go live in the second half of this year. So take a look at this space.

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