The Wealth Dragon Way by John Lee & Vincent Wong

Author:John Lee & Vincent Wong
Language: eng
Format: epub
ISBN: 9781119077848
Publisher: Wiley
Published: 2015-03-31T00:00:00+00:00

Passive Income Generation

The most obvious source of passive income when you are building a property portfolio is your rental income. That is half the purpose (after the capital gains from appreciation) of owning investment property.

But there are more ways to create passive income. You could start a business. If you are not ready for that step yet, you could look at trading the money markets.

In Goals to Gold: Trading the Football Pitch for the Financial Markets, ex-footballer Lee Sandford shows us how he created a healthy passive income when his football career ended by learning to trade the financial markets. We love to criticize the huge salaries of footballers, but we forget that their careers are fleeting. They retire before most people have sent all of their kids though primary school. It is imperative that they invest their money wisely and work out a good financial plan to support them in the future. Sadly, many of them don't do this and end up in trouble—sometimes even bankrupt.

As Sandford points out in his book, the Forex (foreign currency exchange) market is by far the most straightforward market to trade in. Most people have a good grasp on exchanging one currency for another, and, unlike stocks and shares, there's little chance of losing all your money (because it's highly unlikely that a major currency would be devalued to zero against another major country's currency—the last time that happened was before World War II when the German mark was devalued to a level where it was almost worthless) so the risk is limited.

Financial wizards and economists all have their opinions on investing, along with various strategies, but we feel that trading the Forex market is best for newcomers to trading because it is the easiest to grasp.

However, trading is a skill that requires some investment in terms of education. Invest some time learning how to do it before you give it a go.

Trading the Forex market, like any kind of investing, still carries a certain amount of risk, and it would be unwise to go ahead and start trading without learning the ropes first, but once you feel you know what you are doing you should go for it. Too many people steer clear of any risk at all and stagnate as a result. We have to take a certain amount of risk if we want to move forward.

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