From little things, big things grow. This golden nugget of truth is lesson number 1 in building passive income from your investments.
Managed Funds and Exchange Traded Funds (ETFs) are both nifty investments and hereare3 reasons why.
1) You don’t need to be rich to get started.
Relatively low-risk and low-cost, they tend to see better long-term returns than money in the bank. You can also start small with as little as $1000.
2) You won’t put your eggs all in one basket.
Instead of buying one share in a company, with a single share purchase in an ETF or Managed Fund you get the benefit of investing in many companies all at once.
Some of these companiesmight be too expensive to buy shares from directly so getting access to their dividends through a a single Managed Fund/ETF is a great perk.
The assets you invest in with an ETF or Managed Fund can be stocks, bonds, real estate, infrastructure, cash, commodities (like gold), or a combination.
Diversifying your portfolio is a smart move as it minimises the risk to your investment.
3) You don’t need to be a financial wiz kid to invest in Managed Funds and ETFs. You just need to take a little bit of time to get your head how they work.
Once you understand the differences between Managed Funds and ETFs you'll feel more confident in getting started.
