Passive income refers to any activity that generates economic benefits without the need to allocate time and attention permanently. Although it is necessary to have an initial capital, they do not require frequent outflows of money. Next, we analyze the passive income generated by 5 different sources: renting an apartment, investing in shares, creating a YouTube Channel and investing in real economy business.
Monthly rent, $60,000, initial investment, USD 85,000. How much annual income does it leave on investment?
Buying a 1-room apartment and renting it for $60,000 per month gives an annual return on investment of 2.5%, said value is located in the range of performance that was observed in 2021 for a property in CABA (1.5%-3 ,1%). However, with the evolution of inflation and the increase in costs borne by the owner, this income could be located in average net terms, discounting costs of between 1% and 1.5% per year of the value of the investment made.
To recover the value of the initial investment in the department, it is necessary that 40 years elapse. It is a return of a little more than half the average life of an Argentine in our country. It would seem to be a low return in relation to the invested capital and the risks that this type of investment has today in relation to the new rental law is that the owners do not see it as convenient to rent and that is why they withdraw it from the rental offer.
Which ones had the best performance in 2022? Did any of them beat Inflation of 97% in the accumulated of the year?
If $10,000 had been invested in each of the instruments detailed in the graph, the following annual earnings would be obtained:
– Merval: It groups the shares of Argentine companies that are characterized for being solid and stable, such as YPF, Molinos Río de la Plata, Pampa Energía and Central Puerto. Its annual return was 138.8%, that is, as a result, there would be a profit of 13,800 pesos.
– UVA fixed term: its performance is subject to the value of the Purchasing Value Unit (UVA), which depends on the CER index that reflects the evolution of the prices of goods and services registered by INDEC. In 2022 it had a yield of 91.7%, generating profits of 9,170 pesos.
-Cedears: When considering the average of 3 of the most important companies, Johnson & Johnson, Coca Cola and Petrobras, in 2022 the average price increased by 84.5%, obtaining a profit of $8,450 after an investment of 10,000 pesos.
– Traditional fixed term: It is a fixed income investment instrument, that is, a certain amount of money is deposited in a bank for a minimum period of 30 days and a pre-established interest is obtained. The profit after depositing $10,000 would be 7,500 pesos.
In order to know the real performance of the aforementioned investments, it is necessary to consider inflation, which on average in 2022 was 97% and only instruments such as the UVA Fixed Term and the Merval Index could match it, generating positive real gains. It should be noted that Bitcoin is not on the chart because it had a 64% drop during 2022. Bitcoin is one of the most volatile instruments when it comes to investing.
The premise when investing is to diversify, every investment involves risk and it is not possible to know with certainty its future performance. If only one instrument had been chosen during 2022, it would not have been enough to cover the loss due to inflation.
Observing the performance of the shares of Argentine companies in particular, YPF was the one that had the greatest increase in its price (284.6%), followed by the company Central Puerto with 220.2%.
What is the metric by which once a video was uploaded it would have yielded more monetization than annual inflation?
When uploading a video to YouTube, it can be evaluated through different metrics: views, number of clicks, viewing time, average duration of views, subscribers, revenue per mile (RPM), among others. The RPM metric refers to the monitoring of income that is obtained every 1,000 views, for this it is necessary in the first instance that the YouTube channel is monetized. In Argentina, by 2023 revenue will be $0.77 per 1,000 visits, of which 45% are platform commissions, plus taxes must be deducted.
The characteristic of the income included in the RPM is that it is net, that is, it is the income obtained after applying the YouTube commission percentage and considering only the monetized views. The main sources of income for a content creator are:
– Memberships.
– Youtube premium.
– Super chat.
– Super stickers
By multiplying the number of views of the video per month by $0.77 and dividing it by 1,000, you would have an estimate of the gross monthly income earned. The monthly earnings among youtubers are disparate, depending on factors such as the number of views or popularity of their videos. Net income is measured by the RPM, which depending on the number of views may be above the annual inflation rate, generating positive real income.
Investment case of USD 85,000 in an apartment vs. Gastronomic investment with return on investment in 50 months. How much would you be giving us on a monthly basis vs department? We took a case that did not go so well with the business and it is equities with risk vs real estate.
With an initial capital of USD 85,000, it is possible to invest it in an apartment whose monthly rental value is $60,000 or in a gastronomic establishment, generating monthly benefits of $578,000.
In the second case, the profit is much higher than that obtained from renting a property after investing the same initial capital. It should be considered that the investment in a gastronomic venue is of the variable income type with risk, the higher the risk, the higher the level of profits, with which, ultimately, the decision of whether to invest in a property or in a commercial premises will be given by the investor profile and risk attitude (risky, moderate or conservative).
Monthly return on investment in real estate vs gastronomic investment. Same starting capital
dave ramsey, North American adviser on personal finance, assured that “financial peace is not buying things, it is living with less than what you earn so that you can give back and invest. You can’t win until you do this.”
Without this step it is difficult to achieve passive income. The second step is to select the sector to invest very well to convert our savings into an investment with constant income and yield over time.
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