Everyone wants to generate additional revenue from their savings without having to lift a finger, so they can supplement a day job, or gain greater freedom to focus on family, travel or other personal pursuits. There are numerous ways to generate passive returns though some are more lucrative than others and entail varying levels of risk. Common forms of passive investment include the purchase of property which will provide rental income, interest on assets such as stocks and bonds, or trading and other business opportunities that don’t require personal intervention.
Let’s start with an examination of rental activities. On the plus side the real estate market can offer generous returns of around 12% a year. However, the property market is not very liquid and you may have to wait for the market to be ripe to sell for a profit. You need a large amount of capital to enter and then need to find additional funds for taxes, middlemen from mortgage brokers to lawyers, property maintenance and other expenses. Then of course there are the risks associated with renting, such as periods when you can’t find anyone to rent the property, or tenants who cause damage they can’t pay for or don’t pay their rent on time.
Alternatively, stocks can yield around 10% a year in passive income. However, there is always the risk that the company will have a change in fortunes, drastically reducing the value of your investment in a very short time-frame. Also, the difficulty here is in knowing which stocks to purchase and a degree of effort will be involved initially in researching various companies
A better option might be dividend-yielding stocks, which have greater ability to withstand market upheaval. A dividend is a profit distribution sent quarterly or annually to shareholders. Once you’ve made your initial investment, buying the stock, nothing more is required of you and returns can reach a respectable 6-7%. Be aware however, that an economic downturn can lead to dividend distribution being halted.
Another way to go is bonds. They are long term investments that take years to mature and the interest rate rarely exceeds 5% or 6 %. Treasury bonds are backed by the government making them incredibly low risk, whereas corporate bonds are a different story and could lead to the loss of your capital. Of course there are always bond Exchange Traded Funds (ETFs), which offer the option to diversify, minimizing your exposure so a single bond can’t damage your profits.
Obviously, there are traditional financial institutions that offer exceptionally high levels of security, but unfortunately they provide negligible returns, averaging just 1% per year. Then of course there are online banks and DeFi platforms, with interest rates that are 10 times higher. Decentralized Finance (DeFi) applications allow you to perform a wide array of financial activities and offer high yields of around 10%-12% on fiat and cryptocurrencies. Money transfers are rapid and cost effective. However, interest rates can drop if the economy weakens to levels that don’t compete with inflation. Also there is a risk of hacks that exploit holes in the smart contract security and also the risk that a lost private key or mistyped address can lead to the loss of your funds forever. The regulatory status of DeFi applications is also still up in the air as you are dealing with an emerging asset class without definitive tax classification.
Automated Crypto Arbitrage
Another way to generate a new revenue stream without involving any effort is with crypto arbitrage, which is broadly considered to be one of the lowest risk forms of investment in the world, in spite of the fact that it involves the highly volatile crypto markets. In performing a crypto arbitrage trade, you are exploiting instances where for a short time, a coin is available at different prices on multiple exchanges. As an example, let’s look at an industry leader in the field, ArbiSmart.
ArbiSmart is an EU licensed crypto arbitrage platform. It has an advanced AI-based algorithm that automatically scans over 20 exchanges simultaneously to find crypto arbitrage opportunities, buying a coin where it is being offered at the lowest price and then selling it at the highest available price to make a profit on the spread before the temporary price disparity is resolved. So once you have signed up and deposited funds you don’t need to look at a screen after that except to check your balance.
As an EU licensed company, your funds are protected by an array of regulatory requirements that include personnel security checks to prevent scams, KYC/AML procedures to shield against fraud, external auditing to guarantee account integrity, rigorous IT security measures to safeguard against hacks and an insurance fund to cover all operational capital. The company’s risk management protocols include a team that monitors the market 24/7, so that there is an added layer of protection provided by a human team that can intervene in cases of exceptional market upheaval. A degree of security is also offered by the many personal support channels that ensure that there is direct accountability and you are not just dealing with an automated system.
The ideal passive investment channel is not just secure, without requiring personal intervention. It must also offer great returns. At ArbiSmart, you deposit funds and then the system takes over, using them for crypto arbitrage trading. Your funds are converted into RBIS, the company’s native token and you can already withdraw your passive profits within 24 hours, in BTC, ETH, or EUR. The returns are exceptional, starting at 10.8% and reaching as high as 45%, depending on your account type.
Aside from the high yields it offers from crypto arbitrage, another factor that sets ArbiSmart apart from its crypto arbitrage competitors is the rising value of its token, which provides unparalleled capital gains. RBIS has already gone up by 120% since its introduction and if it holds its momentum, and continues its current upward trajectory, it is projected to rise in price by 3,000% by the end of 2021. This is in large part due to the growing popularity of the platform on a global scale, which has led to increased liquidity.
It should be noted that the company also offers a secondary source of passive revenues with its EU licensed interest-bearing wallet. Based on the amount deposited, account currency and the type of savings account chosen, interest rates can reach as high as 45% a year.
As we have seen, there are countless ways in which you can earn a passive income from your capital. The route you choose will depend on the amount you have available to invest, your level of risk tolerance and your profit goals. However in the last year or two, we have seen exciting new developments in the evolution of financial ecosystems and the technology they use, opening the door to secure, automated crypto arbitrage and other lucrative opportunities for all types of investors.
- Exclusive, Limited Time Offer for the Cryptonomist Readers
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