Passive Income

Two of my favorite words are “passive income.” That loosely means money you make without having to work for it. Almost everyone understands the concept of interest bearing savings accounts.That’s a good example of passive income, although in today’s world you aren’t going to make much money on bank accounts The next baby step to earn interest on your money is to buy a CD, which has lots of rules about how long you have to keep it, penalties if you cash in early, etc. Most people understand that, too, and it’s a great introduction to investments.

So if you understand those basics and come into a windfall of cash, you are suddenly faced with a lot of other investment options. That’s when you need to find a good investment counselor and have a professional go over your whole financial picture with you and plan out a future based on risk levels, comfort levels, time you have to oversee your investments, how quickly you can get it if you need it, and market conditions.

A relatively new investment tool for real estate, called Tenants In Common, or TIC. This is similar to a Real Estate Investment Trust (REIT) that become quite the fad about 10 years ago. REITS are formed when a group of investors pool their money together to buy commercial properties as investments. The money they put in becomes shares of stock and as their property makes money the investors get paid dividends on their shares. A lot of community shopping centers are owned by REITS.

A TIC is also a way to pool your money together with other people, but you don’t get shares of stock, you own a share of the deed on the real property that you buy. Of course there are rules about buying and selling TIC property, and you have tax benefits and financial risks, just like other investments, but this might be an attractive investment option for you. If you are interested in learning more about TIC, check out this website by Cardea Commercial and talk it over with your financial planner.

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