A guy once asked me: “how can I accumulate my fortune?”

I answered: “You do it by investment.“

“How and what should I invest in?”

“You can choose stocks, funds etc. You can save a fixed amount of money every month to do that.”

“But I am not able to save money every month, what else should I do?”

I was speechless.

Relax, it is just an illustration. Ask yourself: in real life, have you ever met someone similar?

Some people are born with silver spoon in mouth; some people strike lottery and become overnight millionaires.

But how many of us have such luck? Very few, and this is purely decided by fate.

So what can ordinary people – like you and me –do to change our lives?

We work hard and work smart, so that we can build a good career/business in the future with our own effort. Or, we can use investment as a means to accumulate fortune.

But how do you invest if you do not have capital?

One of the most convenient sources is our savings. We use it as capital and grow it in stock markets. If you do not even have any capital (in other words, you do not have fixed savings for investment purpose), no point for you to talk about growing money and building fortune.

In conclusion, the first step to become a millionaire: save money.

Source: http://www.leinvest.com/en/save-your-investment-capital.html#.Um3gTPlmiSo

Original article from Scg8866t Stockinvesting

The first thing that comes to people’s mind has to be, dividend stocks. But I don’t consider dividend stock investment a form of passive income. Why? Because there is a fundamental assumption that the dividend you receive from the stock you invested is something extra, which is actually not the case. A company giving their shareholder dividend, would be trading without a significant portion of its cash, which means theoretically, the company stock should depreciate at the same amount of its dividend payout.

The dividend income that you receive from your stock, should theoretically be deducted from your stock capital. There is no net gain. Dividend investors treat the dividend they receive as a passive income on the assumption that the company will return to its pre ex dividend date price. That is a very big assumption and much work has to be done to source out for such counters.

I treat dividend stock investment as a portfolio income. You need active participation in your portfolio. Dividend stock investment is not ‘safe’, in this day and age, any low beta stock that gives a stable yield is prone to be affected by interest rates and market irrationality.

My definition of passive income is one that is relatively safe and actually gives you a net gain without the need for much assumptions. Passive is a relative term, you can’t make money without any effort, but passive income should not have a big impact on your day job.

If there is a room in your house that you do not use, renting it out to tenants can make you money, and you don’t even have to be involved in the process. Of course you have to sacrifice some privacy for this, but there is little to no financial risk there.

Create an online blog and express your thoughts with words. Try to find a niche crowd and drive in traffic to earn ad fees. In the mean time, learn something new from this experience.

If you like photography or art in general, you can start a stock website which you can upload your photos or art to sell and earn royalties. Of course you would need to do research on the genre that is in demand on line. Do realize that copyright is a big issue online, so professional bloggers and online news agencies have to pay royalties to use photos or artwork for their articles.

If you are a good sales man, you can tap into affiliate marketing which is another method of earning commission from selling or promoting other company products which you like(eg amazon). Alternatively, you can find something that is in demand and scalable and sell it on ebay.

Investment grade Bonds, fixed income funds with maturity dates(exit strategy) and savings accounts to me are also counted as forms of passive income. As they entail lesser assumptions. If the company/bank is sound, it will return you your capital within a stipulated time at par price. Which means the interest you receive should be counted as net gain.

These are a few passive income sources that I can think of at the moment. Feel free to share and discuss.

http://www.leinvest.com/en/my-take-on-passive-income.html#.Umk4SvlmiSo

Before you invest, you have to do your own research and analysis. After all, there is no such thing called “free lunch” in the world. I have read an online article about the 10 questions to ask before buying stocks. Here I would like to share my own version:

1. What kind of business is the company doing?

2. Will the company still exist after 10 years? In other words, can you imagine if it will close down in the near future?

3. Is the company making profit now? If not, what is the reason behind?

4. Does the company have potential for future development? What is the plan?

5. As consumer(s), do I or others like to use products or services provided by the company?

6. Is the company competitive enough to have a place now in the industry?

7. Are the P/E ratio, Earnings Per Share (EPS), Net Tangible Assets (NTA), and market value relatively reasonable?

8. Is the company having serious debt problem? How is the cash flow?

9. Do you agree with the company’s vision and management style?

10. What is the company history of paying dividend? What is the dividend policy?

After you answered these questions, you already have a basic idea about what you are going to invest in. Even there are many other recommended choices, but you have to do research to see if it the company is really worth your money. Do not ever blindly follow the “market tips”; use your judgment when reading analysis reports. There are tons of them out there. Remember, you are fully responsible for the gain/loss you make in the market.

Translated by Mr Wai © LeInvest.com

Source: http://www.leinvest.com/en/10-questions-to-ask-before-buying-stocks.html#.Umk14vlmiSo