From the Handelsblatt archive: In order for the promise of passive income to come true, it is important to avoid common mistakes - and say goodbye to an illusion.
Psychologists know that the brain reacts with feelings of happiness at the very thought of passive income. A regular stream of money without work is initially associated with effort, but is certainly possible. Handelsblatt shows how it works using four investment strategies.
Munich. Passive income: When these two words are mentioned, most people's head starts going crazy. No more appointments, just do what you feel like doing, and all without the anxious question: “Who’s paying for it?” This is probably the appeal and success of many self-proclaimed financial strategists who loudly promote their ideas for passive income on social media.
“From a psychological perspective, the idea of passive income primarily brings together three wishes: security, freedom and relief,” says Valentin Haas. The psychologist and executive coach knows this phenomenon from countless sessions: Especially when someone feels like they are permanently on the hamster wheel, just the thought of salvation gives them a brief sigh of relief.
At this moment, says Haas, our brain reacts with a feeling of happiness: the neurotransmitter dopamine is released because we believe we have found a way out - even though nothing has changed in the situation yet. “Videos, success stories and promises like: ‘Save X amount and you’ll be able to live on it forever’ provide a real dopamine kick,” says the psychologist.
But if you take a closer look at the offers, you will usually find little that is concrete. There are few questions in which concrete numbers play a larger role in the answer. Whether passive income can work depends on several factors: personal current income and expenses, how and according to which rules assets are built up, and finally on how you manage to invest assets in such a way that a steady stream of income flows from them.
In order to distinguish between the different paths to passive income, the editors of the Handelsblatt interviewed a number of experts and presented four investment strategies that can all lead to the goal. So much in advance: The passive income, which actually flows without any action on your part, is only available to heirs. The following applies to all other people: every wealth has to be earned first. On the other hand, with the right financial planning, it is not impossible to live on this wealth.
Passive income for dropouts: According to retirement planner Michael Huber, living exclusively from your own assets is usually only possible for people who have inherited a lot of money, founded a company or made an invention and were able to sell their work at a good price. As an employee, however, it will be difficult. “Anyone who plans to retire at 50 at the age of 25 solely through iron-clad savings and smart investing will have to make an enormous effort,” says the German head of the VZ Vermögenszentrum.
Passive income as a supplement to your pension: It is much more realistic and sensible to plan passive income as a supplement to your statutory pension. High earners in particular who rely solely on the statutory pension are heading for a huge gap in their provision.
How the depot becomes a constant source of money: These calculation examples impressively show that it is worthwhile to continue investing even in the phase in which the money is to be used up. It's about the balancing act of guaranteeing secure payouts on the one hand, while continuing to take risks on the other. Because only on the stock market with its fluctuations are the returns that allow assets to continue to grow possible.
Retirement planner Huber prefers a “pension from his own portfolio” in ten-year increments because: “With an investment period of at least ten years, there have generally been no losses on the stock market, at least in the past.” With this concept, part of the money is made available for payouts every decade, the so-called consumption part. According to Huber, we need to be defensive here. The remaining money can be invested more aggressively because it will not be needed for ten years.
When asked what such a portfolio that guarantees stable payouts could look like, Christian Funke recommends filling the “consumable portion” with bonds or bond ETFs with different maturities. “The terms are coordinated so that a tranche is due every year,” says the founder and head of the Source4Alpha asset management company. Last but not least, this balancing act shows that it is possible to obtain passive income from your own assets, but it always involves a certain amount of effort.
