If your goal for your long-term investment portfolio is to eventually generate passive income, this is for you.
Passive income can come from bond coupon (interest), real estate rental income, unit trust royalties, stock dividends, annuity payments and intellectual property licensing income.
When building a passive income stream, make sure that it has these 3 characteristics:
1. Safety
Before looking at the potential dividends you will receive, always make sure that the stock you invest in is safe.
Do your due diligence. Find out the financial health of the company. Find out how the company sustains their dividend payout.
The last thing you want to happen is to have the company you invested in fold.
2. Ability to Grow
A good investment should ideally become more valuable over time because the business is doing well and the management knows what they are doing...
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