The new year is almost here, and it’s the perfect time to get ready for your financial fitness journey. While building your wealth may seem difficult and daunting, with the right strategy and tools, you can earn passive income without breaking a sweat (or the bank).
One way to earn a consistent stream of passive income is through fractional real estate investing. And with Groundfloor, your passive income platform, it’s easier than ever to get your share and see high yield returns. We’ll take a deeper look at how you can unlock the door to financial freedom.
Building Your Portfolio
First and foremost, you need to build a diversified portfolio in order to see continuous cash flow coming in. Assess your finances to get an overall picture of where you’re starting. Figure out your goals based on your financial health and how long it will take to reach them.
Then, determine your tolerance for risk. If you’re new to investing, a more conversative approach is good to start out with, but you also don’t want to avoid risk entirely as your returns won’t be as high as they could be. Choose your comfort zone, and start allocating assets to various investments to diversify your portfolio.
Choosing your options
The best way to achieve a successful portfolio is through diversification. There are tons of investing options out there: stocks, mutual funds, bonds, and real estate. While real estate may seem daunting, you can gain high yield returns without needing a very large amount of capital.
Passive real estate through fractional investments allows you to generate rental income without the burden of property management. You’ll get shares of various properties, effortlessly earning a steady stream of passive income. With Groundfloor, your investments are lent to a real estate buyer. Once they repay the loan, you’ll get funds determined by your share percentage.
Our set-it-and-forget-it tech lets you earn passive income without breaking a sweat. All you have to do is make a transfer (or recurring transfers), and we’ll handle the rest for you. Our 10% historic returns means you’re pretty much guaranteed to see success on these investments. Say goodbye to the hassle and enjoy monthly distributions, all without having to lift a finger.
Analyzing Your Portfolio Regularly
Once your portfolio is established and you’ve started seeing returns, it’s good to analyze and rebalance it from time to time. Changes in the market may require adjustments to your investments, so it’s important to determine each one’s value as time goes on.
Your financial situation may also be a factor in rebalancing your portfolio. Perhaps you have new future needs to plan for or are ready to take on higher risks. If your risk tolerance has dropped, it might be good to reduce the number of investments you have.
Rebalancing Your Portfolio
You’ve analyzed your portfolio and figured out where changes need to be made. Before you make any changes, it’s important to consider any tax implications of selling assets in the current market.
For example, let’s say you’ve seen great gains in your investments. If you sell those, you may see a significant increase in your capital gains taxes. In that case, consider keeping those investments but not adding any more funds to them. Instead, use that capital to invest in other assets. Your risk will be lower, you’ll have more shares of the pie, and you’ll avoid higher taxes.
However, if you haven’t seen many gains, or even saw losses, it might be good to sell those assets despite the tax risks. After all, you don’t want to keep pouring into a broken cup.
Overall, when you’re looking to get your investing in shape, it’s important to tailor your strategy to fit your risk tolerance while keeping it diversified for the best chance of success. While most resolutions see drop offs after the first month or so, your financial glow up is fail-proof with Groundfloor. Your future self will thank you.