There are many investment opportunities and investment strategies out there. Not all of them are suitable for you. But if you have large savings sitting in a GIC or a Savings Account wondering if you can I make more than that, the answer is yes.
That being the case, the next question that follows is "how risky". The simple answer to that is "more". So before you delve into the details of investing, you should first examine your situation and yourself to see if you have what it takes to take on this added risk. Here are some questions to ask yourself:
- Do I have money to invest that I won't use for anything else?
To make a passive income, you have to have money invested the whole time. Call this seed money. Seed money isn't liquid. This means that you cannot just take it out anytime you want. You can take out your income you make off the seed money but the seed money itself should remain invested. The larger your seed money, the larger your potential to reduce your risk.
- Am I temperamental?
Warren Buffet, one of the world's most respected investors, once said "Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing." From experience, I can say that when the economy looks really bad or really good, it's easy to make brash decisions that will bite you in the end. The more you have stomach for this, the less risky you will be to yourself.