Almost all of us have full-time salaried jobs where we work hard. We offer our knowledge and/or time to work for any given company. In return, we get compensation and recognition, and many of us eke out an excellent career from it. This is an active form of generating income. When we look at any company, how many times have we asked what are different types of products or market segments it sells into? It is good to have a company that has multiple products for continued profitability. Similarly, wouldn’t it be nice to have multiple streams of income? A multiple streams of income will provide us a safety net against our jobs!
There is a very popular notion of “passive income” that floats around the blog-o-sphere. The essence of passive income is; it is the money earned with or without our involvement. Once it is setup, the recurring income will flow in continuously. In my vocabulary, there is no such thing as passive income. Just because we do not see the effort does not mean it is passive. Instead, I like the term “alternative stream of income”. I am always curious to understand how individuals can create alternative streams of income and how they execute it. Following are few alternatives that I have thought about and tinkered with in recent past.
We all investors try and maintain a diversified asset allocation in our investments. In my discussions with many folks, I have seen that many use different ways of executing this diversification. Many use combination of real estate, equities, gold, etc. In case of equities, quite a few enterprising ones long term portfolio in combination with trading portfolio. Many of us, including me, are aware of different types of asset class and investment vehicles. Unfortunately, for most of us individual investors, we fail to understand how to execute effectively. We really do not know how to engineer our portfolio such that it has optimum asset allocation for our risk profile. We think we allocate little bit of capital to all assets and we should be good to go without any worries.
Sriram Vadlamani at Trak.in wrote a post on 
Five Good Stocks for Long Term Investor
I am a believer that our environment, surroundings, and our education shape our thought process. Knowingly or unknowingly our thinking will demonstrate what we have been through in past. It is applicable to every living being including us humans and present Indian population. Still there are very few who think and visualize beyond their surroundings. And it is these few who evolve and succeed over long term.
Our present 20s and 30s generation, of which I am part of, is very vibrant, inquisitive, and very progressive and has a desire to succeed in one way or the other. As they say, life is very fast in today’s India! The IT generation is very impatient which reflects the IT domain’s continuous changes in short one year. What is new today is considered to be obsolete in 2 years. Unfortunately, we fail to understand it is not same in investing. Here are few interesting tidbits:
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