Editor’s note: This article was first published in February 2018. Its statements about the property market (until very recently, today speculation is no longer possible in most countries), investment firms currently being set up to spot internet businesses, and websites costing from 10 euros a year reflect early 2018.
We’ll define a profitable asset as anything that gives us a steady, regular income, or anything that, once bought, is guaranteed to sell for more than we paid within a certain period of time. And we’ll define passive income as anything that puts money in our pocket at regular intervals without needing constant involvement on our part. Let’s explain this in more detail.
First of all, we need to know how to tell liquid assets from non-liquid assets. We explained the difference at length in that earlier article.
Until very recently, property was considered the best asset, because of how easy it was to speculate with it in the short term. Today, speculation of that kind is not possible in the property market of most countries, but that doesn’t mean it’s a bad investment.
Even so, investing in property always has been, and always will be, a way of earning passive income by buying properties to rent out.
The most profitable assets today
Shares
Especially if they pay good dividends, although, as we’ve mentioned before, living off dividends means investing a great deal of money, which we may not have. Even so, choosing a good stock or a good investment vehicle can give us that regular income we’re after, or let us sell later at a profit.
Patents
Registering a patent can be a business worth millions, because if we get the chance to register an innovative patent, we’ll receive an income every time it’s used. The hard part is coming up with the patent. Still, there are plenty of people today who live off their patents. And not just make a living: in some cases we’re talking about real fortunes.
Books
Writing a book can be a very profitable asset, and right now, thanks to the internet, we have the chance to earn income for life every time our book is bought or downloaded. In fact, these days you can self-publish your own book, both in print and as an e-book. Whenever we suggest ideas for making money, this is almost always one of them.
Websites or blogs
One of the most profitable assets of recent times: from 10 euros a year (which is next to nothing) you can generate very striking income, and in some cases income in the millions, with the added possibility of selling the website to an agency that buys or optimises websites. We’ll talk about this at greater length in future articles.
A YouTube channel
You should be clear that both a blog and a channel usually need updating and some dedication on your part, but the return usually more than makes up for it, as long as you do a good job and have something new to say, of course.
Businesses
Buying an undervalued business, or one whose owner hasn’t managed to make it work, can be one of the best acquisitions of profitable assets. Lately, people tend to speculate with companies as easily as they speculate directly with shares. The other way to create an asset is to start your own business. Without a doubt, that’s the most profitable investment.
Property
It isn’t the business it used to be, but property is still a great asset. Buying an old house, renovating it and renting it out is an asset as long as the rent we receive is higher than the mortgage payment we make each month. The difference between those two amounts is our regular income. Another option is buying large properties and turning them into rental properties. Here we gave you the 8 ways to invest in property today.
See also: Corporate bond ETFs: a lower-risk profitable investment in the eurozone
Your own business
There’s no better or more profitable asset than your own business or company, because this asset is your creation, your masterpiece. It’s worth as much as you want or are able to value it, and the income you receive will depend on the business model you’ve built and on your skills at running a company, of course.
Taking part in projects as an investor
Investing in an entrepreneur’s project is another way of earning passive income. Investment firms specialised in spotting promising businesses, especially online, are being set up right now. If you help fund a web project, you can either become a partner in it and receive income based on its profits, or set a good exit strategy for that investment within the agreed time frame. It’s similar to investing on the stock market, although probably riskier.
I’m sure there are many more kinds of profitable assets.
Featured image: The National Archives, Public domain, via Wikimedia Commons.
