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Passive Income, Stocks ETF, and Retirement

Passive Income, Stocks, ETF’s, Mutual Funds, and retirement solution review. One must always take professional advice. This information is for reference purposes only. Always use your discretion, because every situation is different. It’s information for beginners.

When it comes to making money and saving for the future, all of us think of ways and means to make money. Investing in real estate, stocks, mutual funds or ETF’s are the few options.  Whether it’s for the immediate future needs or retirement, one needs to take steps in this direction from the very beginning.

It’s simply the time value of money. In other way it’s the Basics of compounding. When compounding and cumulative factors are taken consideration, the final result is  surprisingly big . To make best use of it, think this way, how much you will invest initially and at what rate of interest. One can always work out backwards and plan accordingly.

One must be know, rule of 72!

What’s the Rule of 72?

The Rule of 72 is to estimate how long before an investment doubles. Simply divide the interest rate by 72 to determine the number of years it will take to double.

When it comes to investing, the safety of the hard-earned money must be given first priority. This can only come from knowledge. Having a good financial advisor on your side is a wonderful idea unless you are fully knowledgeable and confident to take the next step.

Having a sound understanding of the financial basics and stock market moves is a must. Investing simply by a suggestion of your dear friend or a relative can be dangerous and one can lose the capital. Since your main aim is to make money, it can only come by selecting the right type of investment product.

When it comes to stocks, investing in stocks, one can make money. But it’s all speculative! It’s simply a guesswork. Can you put your money like that!!

It’s a bit of plain luck. If the stock goes up, you can consider yourself lucky!!! Take an example of GameStop, in pandemic it touched above the 300 marks! But after few days, the trend was different. Would you still like to take risks and invest like that! Some experts call it not investing but speculating!

If you are thinking of investing in stocks, you must carry out a detailed financial analysis of the company you want to invest in. If a company has a track record of giving dividends, investors will have confidence in investing in that company.

When it comes to the Canadian context, to name a few, companies like Fortis, Enbridge, Bell Canada, Bank of Montreal are a few of the companies that have been giving dividends.

The idea of investing for passive income is to invest in dividend-paying stocks or ETF’s. Investing wisely, keeping our principle intact, and looking for growth over a period of time. In our case, it could be 25 and more when we talk about compounding and investing in the early years.  Since stocks can still be risky, so what is the best alternative is to invest in an ETF.

It’s a kind of hybrid solution. ETF is traded like a stock but has all the features of mutual funds. The main attraction of investing in ETF is, that the MER is very low, as compared to mutual funds. In the longer run, it saves money.

ZDV and ZWC are a few of the BMO’s best dividend-paying ETFs.
Vanguard and Black rock are the other two major players who invest heavily in dividend-paying stocks.

In the Canadian market, there are many dividend-paying ETF’s companies with a consistent past record of paying dividends. In this article, our aim is to look for those types of ETFs.

More info on these can be taken by talking to your financial planner or by visiting the respective websites.