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Live Off Dividends

Recap of Investment Products

Updated: Feb 16, 2023

Earning, Spending, saving, protecting, and budgeting are the core personal finance concepts that have been discussed so far. How no personal finance plan is ever complete without them has also been highlighted.

However, you could be familiar with those concepts but still, find execution hard if you are not familiar with their exact tools and steps. For example, if you want to start investing right away, what are those products you can start putting your money into? You need to know.

Therefore, here, we will be discussing investment products. If you effectively harness investing in those products, you can easily achieve your financial goals. The main categories we will be discussing are stocks, bonds, mutual funds, ETFs, and insurance.

Stocks (equities)

Every business needs money. Often, corporations raise money for various purposes including paying off debt and launching new products. They also do so when they want to extend their operations into new markets or regions or expand their facilities. When you buy a company’s stock, you become its shareholder, effectively one of its owners.

Investors in stocks are rewarded in two major ways: capital appreciation when a stock price rises and dividend when the company distributes a part of its earnings. There are different categories of stocks. More about that in the below article:


Another way corporations raise money is via the issuing of bonds. You lend them money for a given amount of time known as the maturity. Then, you receive the principal you invested and the interest it has accrued. It is not only corporations that issue bonds to borrow money, however. Governments issue bonds too to sustainably finance their capital projects such as schools, hospitals, roads, and others.

Bonds are considered the safest category of investments as they are backed by the full faith of the company or government issuing them. As they are predictable, they help to preserve capital. As a result, however, the returns on them tend to be poor.

Mutual Funds and Exchange-Traded Funds (ETFs)

A mutual fund is an investment vehicle that pools funds from many investors to invest in an array of products such as stocks and bonds. The totality of the investment holdings that make up a mutual fund is called a portfolio.

Money invested in mutual funds may enjoy dividend payments, capital gains, and increased net asset value (NAV).

Exchange-Traded Funds (ETFs) are similar except that they can be regularly bought and sold on exchanges like normal stocks.

When you invest in mutual funds, you enjoy benefits that include professional management, diversification, affordability, and liquidity.

Real Estate

Real estate is another viable investment vehicle you can explore. You can buy rental properties upfront, flip houses for short-term gains, or invest in real estate investment trusts (REITs).

Each has its pros and cons. For instance, while rental properties provide a steady cash flow, managing tenants can be tedious. Thus, you should learn as much as possible before choosing the investment route ideal for you.


Finally, insurance. Is there an aspect of your life or work wherein you face a potential of tremendous hazard or risk that you want to guard against? Then taking an insurance policy is highly advised. Whether for your whole life, children, health, home, or your automobile, there are insurance policies out there for you.


These and many other tips are included in my new ebook which is just one click away:

Hope this was useful for you! If so, hit the like button to make me feel good. Please note that the above content is not investment advice and shall be considered only for informative purposes.

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