Ways of Passive Investing.
It has been known for business to mean buying and selling of goods and services. Services are things which cannot be felt by use of hands. Goods, on the other hand, are tangible things. The the main purpose of business is making a profit. Profit can only be gotten by selling goods at a higher price than the original price. It is most likely to for some factors to make us not to make a profit in a business. For instance, we have prevailing market price, damages, and improper management as factors that may hinder profit making. Sometimes the price of some commodities tend to fall drastically. This makes little or no profit after selling the commodities. Profit in a given business can also fail as a result of damages. It is normal for some goods such as foods to expire and turn into wastage. It is also normal for delicate goods to get damaged in the process of their transportation. This also go into waste.
Improper management can also lower profit. This can be seen where there are theft cases in a business. All these factors can make a business to close down. There are four categories of business activities. Comsumers, retailers, wholesalers, and manufacturers are the four kinds of business activities. Each and every category is meant to serve a different role. It is most likely to mention of passive investment the time we talk about business.
This is a market investing strategy that looks on a market-weighted portfolio. This kind of investment as the name suggests is unlimited to any item. It is obvious for investment to be done with a purpose. The main purpose is to make a return. Profit may be in form of money or in form of goods. Let we get a hint on investment for money gain. There are kinds of passive investment. Capital investment is one of the methods.
Expect this kind of investment to be safe. You are required to invest a certain amount of finance in a bank to earn an interest. A given time is meant to give a certain interest. You may agree with the bank on the duration of your invested money. Expect an interest gotten to be the intended profit. Another way of a passive investment is buying and renting of properties. This is evident through buying rental houses and start renting them Expect to earn a profit in such an investment after a certain period of time.
This kind of profit will be a permanent continuous made profit. You can also buy and sell investment objects. Buying and selling a machine at a much higher price than the original price can be another way of passive investment. Developing small businesses is another way of passive investment.
Reference: his explanation