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Passive Income – Portfolio Investments

Passive Income – Portfolio Investments

This is the third in my passive income series. If you have missed the first two you can find them at

A portfolio is generally a collection of investment holdings which could include various investments such as bonds, securities (stocks and shares), property and cash.  I covered property in my last post and in this one we will look at cash in the bank, stocks or shares, and managed or mutual funds.
For many years I worked as a Financial Planner. My husband and I together with another partner built a medium size financial planning dealership in Australia. We experienced some interesting times with the various ups and downs of the markets.
Passive Income - Portfolio Investments
I have not worked in that profession since the end of 1999 and of course in that time much has changed with the global economy.
I am Australian and our economy has  not suffered as badly as some.
I am going to discuss the methods that you can earn a passive income here. I do not make any recommendations you should seek your own advice before investing from a professional.
Passive Income – Bank Deposits
Having your money in a bank and earning interest on it is one way of  earning passive income. You are lending your money to the bank. Over the years interest rates have gone up and down depending on the current economy. I remember in the eighties  in Australia you could earn double digits on your deposits. Those days are gone!
I know there are countries in our current economy where the banks are paying zero interest. In Australia it is possible at the time of writing this to earn 5% on a bank deposit.
People often felt safer having their money in the bank than choosing other methods of investment. That feeling of certainty was shattered with the Global Financial Crisis (GFC) and the collapse of some major institutions.
Clearly even in Australia you need a lot of cash to earn a reasonable passive income at 5%.
Passive Income – Stocks and Shares
In Australia we tend to call stocks shares but  for now I will refer to them as “stocks”.
In more stable economic times it has been thought that if you held “blue chip” stocks you could not go wrong. This would be the most passive way you could earn an income from stocks. By holding the investment and receiving your dividends.
There are more active ways people invest in stocks and there are many courses available to teach people various methods.  If you are not a stock investor I recommend you only enter the market once you have done your research and taken professional advice.
Stock markets go up and down and this means so does any money you put into the market.
Passive Income – Mutual or Managed Funds
In Australia we call Mutual Funds “Managed Funds”. I am not sure of the terminology in other countries but basically these are “collective investments”.  There are mutual funds that invest into a specialized area and there are funds that have a spread of investments into various investment types.
These investments are usually accessed through a financial planner. They can provide passive income and of course come with the same risks as the markets they invest into as we witnessed in the GFC.
Passive Income – Portfolio Investments Conclusion
For you to be able to live on a passive income choosing any of these methods  mentioned here you must have capital. For the majority of  people around the world this is not the case.
In the rest of this series we will look at ways you can start to build up a passive income without a large sum of capital.

Please leave me your comments on Passive Income – Portfolio Investments below. Have you invested in these methods in the past?  If you found this post of value please share it with your friends.

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Sue Price
Skype: sueprice

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54 thoughts on “Passive Income – Portfolio Investments

    1. Sue Price Post author

      Hi Oliver

      Money in the bank is about as Passive as you get in my book. Where I live there are some wealthy people who live off their bank account interest and other investments. We have friends who moved most of their money to bank interest after the GFC.
      I have others who still have stocks as well. Sure they look at their investments (and talk about how much they have gone down) but the time they put in is not like me working 🙂

      I know some good stock brokers but who knows what will happen right now.

      Thanks for your comment Oliver

      Sue

  1. Donna Merrill

    Hi Sue,
    Here in the US we have seen so much change in these methods of passive income. Our banks are a joke lol. When it comes to stocks, I never had a good feeling about it. Maybe it is sheer ignorance, or too much to handle, but it never was for me.
    Mutual funds are pretty safe here in the U.S. but it takes too long for a good return.
    A portfolio has to be spread out. I do manage to do that but with all the changes we are undergoing, I’ve seen people suffer from many of these investments.
    My daughter is very into trading. She does pretty well but lives on antacids. lol.
    Thanks for the info.
    Donna
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    1. Sue Price Post author

      Hi Donna

      Yes the US banks certainly do not have the stable reputation they once had.

      Many people are like you and not keen o n stocks. Funny I used to be more comfortable with them than property, mainly as I did study the whole security markets as part of becoming a financial planner. I know some traders who do really well. I would be like your daughter though on antacids!

      It certainly is more difficult for people to know what to do these days. More than ever we need to do our homework.

      Thanks for your comment Donna.

      Sue

  2. Viola Tam

    Hi Sue,

    Great investment options! I am not at all educated in any of these options. Thank you for sharing your expertise.

    As I was reading, my mind was on exactly the same point that you bring up at the concluding paragraph – most people simply do not have the capital. Culturally speaking, Chinese people tend to favour saving a lump sum to get started. We joke about ‘getting the first bucket of gold’. However, how many ordinary Aussie are on that path? What about people from other cultural backgrounds?

    Great analysis. I look forward to reading your next post, Sue.

    Viola Tam (Sydney)
    Viola Tam recently posted..MLM Success Tips – Building a Great TeamMy Profile

    1. Sue Price Post author

      Hi Viola

      My daughter in law is Chinese and I also have had Chinese friends and clients over the years so I am pretty familiar with your cultural choices. It is good observation that you make because your cultural backgrounds do influence how we operate around money.

      During my days working with the organisation that promoted Robert Kiyosaki and other teachers it was being taught that you could get started in property with no or very little money. There were many Aussies that loved that advice. So many Aussies cannot save money. But I am sure you know that 🙂

      Thanks for your comment here Viola. I appreciate it.

      Sue

  3. Adrienne

    Thank goodness you use to be a financial planner Sue because you definitely know this area.

    I admit being somewhat ignorant when it comes to investment. I leave all that up to my Mom because she’s the financial whiz of the family. She has invested well and watches every single penny. We do have a lot of stock spread out and although they have gone up and down throughout the years we still have done really well with them.

    We have a few managed funds along with property, oil wells and phone towers so it’s so smart to never have your money tied up into just one area.

    Great share here Sue and I’ll look forward to your next post.

    ~Adrienne
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    1. Sue Price Post author

      Hi Adrienne

      I am glad I had the experience to be a financial planner but I am sure as heck glad I am not one now in these times.
      Good on your Mom for being a financial whiz. Wow that was so unusual for her generation. I had a lot of clients who were in your Mom’s age range and most of the women were very ignorant about investments.

      Yes it is smart to not have your money tied up in one area. So many people do that though.

      Thanks for sharing your family experience with us Adrienne.

      Hope your week is going well.

      Sue

  4. Carol Lynn

    Ok, I admit this type of thing freaks me out completely. I have no faith in any financial system!! I think you would surely need a good investment adviser unless you really have some know-how. I know people who are pretty savvy and they hop online and buy and sell stocks and call it a day. I would probably pass out before I typed in the url, lol. If you have a little bit of money to experiment with, it would be worth it to try even if you lose, just to learn about it and get better at it. You’re a step ahead because of your experience as a financial adviser which definitely comes in handy! I think I’ll stick to the bonds… you just have to buy those and wait 🙂
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    1. Sue Price Post author

      Hi Carol

      You are not alone with having a lack of faith in the financial system. You know I used to trust it completely. That was my education of course. When I was working with Robert Kiyosaki and he started talking about the holes and predicting what happened (and is still to happen) I thought he was wrong. How wrong was I?

      I think even in more stable times people should either really educate themselves or have a good adviser before they invest in these areas.

      You should only do what you feel comfortable with I believe.

      Thanks for sharing here Carol.

      Sue

      1. Adrian

        Hi Sue, I understood that the passive income is indeed necessary,because it helps me to make a backend for financial Growth. By the way , I have just read Rich Dad and Poor Dad and I am amazed to see that you have worked with Robert Kiyosaki !

        1. Sue Price Post author

          Hi Adrian

          Good on you for reading Rich Dad Poor Dad. Yes I worked with Robert. I have known him for over 20 years well before he wrote Rich Dad Poor Dad. My favorite of his books is The Cashflow Quadrant. I recommend you read that one too.

          Great to hear you understand the importance of Passive income.

          Thanks for your comment

          Sue

  5. Gen

    I have always look at the portfolio route of investing as being too much out of my control. My cousin did rather well of them before the bust, but I never did understand what he was doing. So I have searched other ways to have my money work for me. This is a great post, Sue. =D
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    1. Sue Price Post author

      Hi Gen

      Like most things it is all about education and I am sure your cousin was educated. Having said that no matter how educated we are no one can predict the exact timing of ups and downs.

      Thanks for your comment Gen

      Sue

  6. Louise Steiner

    Hi Sue
    I really enjoyed this post. It explains the various types of portfolio investments very clearly. As you know I was a portfolio manager for many years, so I guess I am biased towards portfolio investing 🙂

    I often hear people say that share portfolio investments are too risky, and yet they are prepared to plough all their spare cash into one investment property, putting all their eggs in one basket. In my opinion this is a far higher risk approach to investment than portfolio investments.

    An investment portfolio allows you to achieve a far wider spread of investments, spanning different asset classes, countries, sectors and companies, which will in turn reduce the level of risk. Property can be part of an investment portfolio and will be far easier to buy and sell in the form of shares than a physical property, allowing you to respond to changes in market conditions. You also save yourself the headache of managing the property. However, having a professionally managed porfolio is crucial to success and so often people dabble with a few shares, lose money and say the stock market is too risky.

    I’d also like to dispel some of the myth about needing large amounts of capital to get involved in the stock market. You mentioned Mutual/Managed Funds (which by the way are known as Unit Trusts in the UK) and these are an excellent entry point into the stock market for a novice investor (with advice). Most of these funds allow relatively small investments of just a few hundred dollars, and in the UK many Unit Trusts have savings schemes, allowing you to invest very small sums every month. I don’t know what the situation is in other countries though.

    Oops, sorry Sue, bit of a long comment. You got me on my hobby horse 🙂 Thanks for sharing though and I’m looking forward to your next post in the series.
    Louise
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    1. Sue Price Post author

      Hi Louise

      Yes you are very qualified to speak on this subject.

      I agree with you and also find it interesting that people feel property is so much “safer” as an investment than shares. I know a lot of people who are in property and hurting at the moment. That old belief that property will never go down in value is simply not true.

      Thanks for elaborating on the spread a portfolio can cover. As an Australian I always liked the fact we could access other global markets. I think you have hit the nail on the head that many people dabble without getting professional advice and then blame the shares or investment they chose.

      There are similar investments here in Australia like those you have explained in the UK with a savings plan attached. They are an excellent way for people to get started.

      Thanks for your great comment and for sharing your knowledge Louise.

      Sue

  7. Sylviane Nuccio

    Hi Sue,

    Sorry for being so late in the game here. This is an excellent series and especially for someone like me who is not educated in the savings department.

    Unfortunately I didn’t grow up in an evironment that knew much about investement so, it’s not in my “DNA” so to speak, and I had to get informed and educated to know the little bit that I do know, and go from there. That’s why this post and probably the next one as well are very helpful to me 🙂

    Thanks for this expert info, Sue!
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    1. Sue Price Post author

      Hi Sylviane

      You are not alone in the way you grew up regarding education about money and how to invest it. The vast majority of people are the same. I grew up with parents pretty much spending what they earned after they paid the mortgage. It was really by default that I ended up studying to be a financial planner.
      Even as an accountant there was much I did not understand.

      I am glad you are enjoying the series Sylviane. Thanks for commenting.

      Sue

  8. Patricia Gozlan

    Hi Sue,
    I was attracted to your articles because I love passive income from smart portfolio investments.
    Although the times are tough now for financial planners, I believe that it takes many things to be successful in our investments such as knowledge, right information, a great financial adviser, good general economic conditions and lots of work on our beliefs around money and wealth.
    I have helped clients on the last resource helping them to energetically increase their benefits becoming profit magnets in a moment of crisis.
    I did it for myself too and it worked wonders.
    Thanks for sharing with us these great tips and good luck with everything;)

    1. Sue Price Post author

      Hi Patricia

      It is so good to hear your perspective as too many people are fearful right now. It is tough for financial planners right now for sure but to some extent that is part of the profession. There have always been ups and downs.

      What an important role you are fulfilling at present helping people get their beliefs aligned with success. That as I am sure you know is just as important as the knowledge of where to invest. Maybe even more important.

      Thanks for dropping by here and for sharing your insights Patricia.

      Sue

  9. nilesh

    Hey sue, thanks for this beautiful sharing about passive income. you are just superb with your explanation. I like it very much and is waiting for your next advicable post.

    1. Sue Price Post author

      Hi Nilesh

      Thank you so much for your kind feedback. I really appreciate that and look forward to seeing you back here.

      Sue

  10. Romy Singh

    Hello Sue,

    Great Post..

    I’ve very good experiences with passive income – bank deposit. I’ve certain figure deposited in my bank account and I’m getting 9% interest which is cool.. But as far as stock and mutual funds are consider I don’t have any experience with them but soon planning to get started with stock and currently I’m gaining ground information about stock to understand it better.

    BTW, Thanks for great ideas. 🙂
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    1. Sue Price Post author

      Hi Romy

      Wow I did not think there was anywhere in the world where you could currently get 9%! That is excellent and well done.

      Great you are also learning about stocks. If you educate yourself that is the most important thing.

      Thanks for dropping by again and for sharing your experience.

      Sue

    1. Sue Price Post author

      Hi Farouk

      Yes passive income is amazing and can give us real freedom.

      Thanks for your comment and have a nice weekend.

      Sue

    1. Sue Price Post author

      Hi Elaine

      I agree there are very few people that have a large lump sum to invest. Fortunately there are other ways we can build a passive income.

      Thanks for dropping by here Elaine and have nice weekend.

      Sue

  11. Praveen Rajarao

    Sue – When I was back in India, I used to invest my money on stocks and mutual funds, but since the time I moved to the US, it hasnt been a smooth ride for such investments. It is just that I need a financial advisor who can really vouch for a company and it’s future, although I read into the various stats and figures published, I am never certain about it.

    Nice article.
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    1. Sue Price Post author

      Hi Praveen

      Thanks for sharing your experience. Did you do well when you invested in the stocks and mutual funds in India?

      It has not been a smooth ride for investments in most places in recent times. A good financial advisor is really important but I do wonder how much anyone can predict the certainty of a company. A lot of due diligence needs to be done.

      Have a great day Praveen

      Sue

        1. Sue Price Post author

          Hi Praveen

          As long as you finish in front that is the main thing. Well done!

          Thanks for sharing.

          Sue

  12. Leslie Denning

    Hi Sue. I did pretty well in the stock market until the bubble popped. I had solid companies, but after that, I sold most of my stocks because I just don’t have the nerve for the stock market. I do still have some in my IRA account, and they are doing ok – nothing to dance a jig about, but they’re holding steady and paying dividends. I WISH I hadn’t sold my Dollar General stocks, because they have really taken off and I got them for really cheap. I probably wouldn’t be happy without a crystal ball, though. Thanks for this informative post.

    All the best,
    Leslie
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    1. Sue Price Post author

      Hi Leslie

      You certainly are not alone in losing your nerve for the stock market. Many people have lost their trust in it.
      Hindsight is amazing isn’t it? I have a few property stories like that of properties we sold too early or too late. Oh yes a crystal ball 🙂

      Thanks for your comment Leslie and have a lovely weekend.

      Sue

  13. Leo

    These are excellent choice for passive income. My favorite is the stock market, because it’s really the only way to keep up with inflation. (Though you do have to bone up on it before starting.) Leaving money in the bank may be far safer, but interest rates rarely keep up with inflation rates there, which means the actual value of your money goes down.
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    1. Sue Price Post author

      Hi Leo

      It is interesting you favor the stock market as so many people are feeling nervous about it. Over time certainly the stock market keeps pace with inflation. I guess there are many places in the world right now where inflation does not exist. In Australia we have very low inflation at the moment and I know some countries are going the other way.

      You are spot on with your comment on leaving money in the bank.

      Thanks for your comment Leo

      Sue

    1. Sue Price Post author

      Hi Lesly

      Many people do not know the options they have available to them to make money and this is just one category. Thanks for your comment.

      Sue

  14. Mark Hunt

    Hi Sue,

    I am not coming from a rich or investor’s family, and my whole life I was working hard for money. Maybe it is only me but I have this feeling that with all of the global economy changes this method of earning money is simply out of business.

    It is pretty obvious that the money is not disappearing and just goes to someone else’s hands. I hope that with your series of article I would be able to educate myself bit more and find a way to change my life.

    We are not getting younger.

    Wish you a great rest of the week,
    Mark
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    1. Sue Price Post author

      Hi Mark

      Most of us do not come from rich families which is why we have to learn different thinking. I grew up with working class parents. I did get to university and studied business majoring in accounting. But it is from personal development I learned most about money.

      Yes most of us grew up thinking we must work hard for money. But that will not make us wealthy. I agree with you that with the global economy now we must learn to do things differently.

      I hope I can give you some ideas Mark. Have your read Robert Kiyosaki’s books. I especially recommend Rich Dad Poor Dad and The Cashflow Quadrant.

      You have a great rest of your week too Mark and thanks for finding my blog and commenting.

      Sue

    1. Sue Price Post author

      Hi Jessica

      Thanks for your feedback. That is the key to success with shares for sure good companies with good dividends. Well done.

      Sue

  15. Elaine Salt

    This post is a great resource for people who are planning to invest their money to various forms of investments in order for them to generate a passive income.

  16. Make It Mine

    I have learned so much by reading your blog. It always amazes me how much there is to learn. It is also mind boggling how fast things change. For a newbie like me having a resource like your post.

    1. Sue Price Post author

      Hi there

      I do not know your name so cannot address you. I am guessing by the address of your website you too live in Australia. I am so happy to hear my blog is helping you. Being new online can be so overwhelming.

      Thanks for your comment.

      Sue

  17. Nina Corales

    Having a limited knowledge about passive income attracts me to read more from your future posts. Having cited many ways on how to go for this thing will surely inspire investors. I am looking forward for your succeeding informative blogs.Thank you.

    1. Sue Price Post author

      Hi Nina

      Thanks for your feedback and I am glad to know you are finding these posts worthwhile. I often come across people who do not understand passive income which is why I am writing the series.

      Sue

  18. LifeInsuranceVancouver

    I am in my early 20’s, I am working very hard to save funds that I can use for building a passive income. Until now I cannot decide on how will I invest my money once I have raised a sufficient fund for my future. Stocks and shares seems exciting but I am still considering the risks involve in this type of investment.
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    1. Sue Price Post author

      My advice to you is to get professional advice before you start investing. Also read all you can and educate yourself.

      Thanks for leaving a comment here.

      Sue

  19. Michael Lamerson

    Hey Sue…
    I have found a way to play a totally different game and move my wealth completely off the grid. Let me explain… the game right now being played is all about paper. Everything from stocks to bonds to mutual funds even dollars are being affected by the moves of Wall Street and banksters. The way to play a different game is to move out of paper and into physical assets. With cash it is an easy thing to do but if you are like me most of your money is tied up in retirement accounts. I have found a loop hole that allows you to move your existing retirement account into physical gold and silver.

    Let me explain…

    I am happy to tell you and your following that after hours and hours of research I have found the most reputable company who specializes in this kind of transaction and I urge everyone to get in contact with them. This company was recently featured in the Forbes 2013 Investment Guide and made the 2013 Inc. 500 list as one of the fastest growing companies in the US. For a very limited time this company is offering a completely free investment kit that can be mailed right to your front door step and shows you exactly how to move your existing retirement account into physical gold and silver. To take advantage of this offer and right now you can request a FREE Gold investment kit by going to my website: http://www.buyagoldira.com

    To your success,
    -M. Lamerson Westland, MI

    P.S. Listen I don’t want to put any pressure on anyone but these free investment kits go out on a first come, first serve basis. So please don’t wait. Your future depends on it.

    Also Sue…like other before me here, it’s very refreshing to read your take on these subjects. This is a great website and I’m one for sure book marking these site.

    1. Sue Price Post author

      Hi Michael

      I totally agree with your strategy. This particular blog post you found was one on a series of how to build a passive income. I did not include gold or silver in this series as clearly it is does not produce an income and that is what I was talking about. 🙂

      I understand the value of gold and silver. I am an Australian and our laws are a little different here with our retirement funds but I totally understand where you are coming from.

      Maybe others who live in the USA will see your comment and they can take advantage of your suggestion.

      Thanks for your feedback Michael.

      Sue