When we talk about the importance of the correct valuation of assets, we imagine that this is a mission for companies. However, it must also be part of a long-term personal project: to generate extra passive income.
Making money generate money protects purchasing power, ensures financial security and quality of life in the future, and sustains dreams!
A stock investment, for example, is a source of passive income; you have worked hard to accumulate capital – active income – and now it’s time for that capital to work!
There are many ways to generate passive income, but can tokenization be an ally for this?
In this article, BLOCKBR will cover the different forms of income and how you can make money sweat for you!
PASSIVE INCOME AND ACTIVE INCOME: WHAT IS THE DIFFERENCE?
It is the one known to all of us: the income obtained through work as an employee, freelancer, self-employed or entrepreneur. This is where the sources of income come in, where the person invests effort to earn income.
For the vast majority of people, active income is the starting point for accumulating capital and investing in assets that generate passive income.
It is the income earned by investing capital in physical assets and financial products that generate income regularly and at a contracted periodicity. One of the best known examples is real estate that generates passive rental income.
Real estate is a curious example of a passive income generating asset that, for the vast majority of people, is born out of a passive income of a few years until one can acquire the asset.
A basic premise of passive income is that it is not budget sustaining. In this way, it will be possible to make the big plans counting on future income.
IS IT POSSIBLE TO LIVE OFF PASSIVE INCOME?
It certainly does!
The desire of people is, over time, to depend less and less on active income and more on passive income – a natural process when we think about retirement, which is nothing more than a passive income derived from your investment in the pension contribution.
However, to live on passive income, you need to make a constant and realistic study:
- From the personal budget, balancing needs, plans, and deadlines;
- The ability to invest without compromising the budget;
- The quality of the investments;
- The ease of changing the investment profile.
Knowing the ways to generate passive income and being aware of the best ones at all times is an efficient way to get the best passive income every time. Let’s talk about the most well-known ones.
WHAT ARE THE BEST KNOWN SOURCES OF PASSIVE INCOME?
Passive income from owned real estate is an excellent option, whether in seasonal rental, which is constantly growing, or in long-term residential or commercial leases .
The real estate rental market is usually heated, because financing lines in Brazil are expensive. On the other hand, renting carries with it the risk of default and the condition of the property at the end of each contract – which can generate repair costs.
Stocks are one of the best known ways to generate passive income, although not the most popular due to complexity, volatility, and limited access to investors with a lot of capital.
You can earn from the appreciation of the shares in the market and from the dividends, which are the portion of profits distributed to the owners of the shares.
The tokenization of stocks is making this investment more democratic, helping small investors to earn passive income.
Real estate funds are an excellent opportunity to generate income from real estate without the risks inherent in owning the assets. All you have to do is buy shares of a fund from a brokerage company with CVM accreditation.
Tokenizing real estate funds is yielding great results for investors with democratized access, greater agility, and lower transaction costs.
OTHER EXTRA PASSIVE INCOME ASSETS
The universe of possibilities to earn passive income is large, we highlight some important assets.
- Copyrights, patents and licenses;
- Info-products (e-books, online training);
- Fixed income investments.
WHY HAVE EXTRA PASSIVE INCOME WITH TOKENIZATION?
The tokenization of assets has increased the attractiveness and the audience interested in generating passive income with important advantages for both the investor and the offerer!
It is a process where an asset, right, or credit can be offered to the market in the form of a token – an encrypted digital asset – on a blockchain – the digital ecosystem where cryptocurrencies are produced.
We can say that absolutely all kinds of assets can be tokenized, from real estate to works of art, to shares in a company, receivables, precious metals, and even crop credits!
As we can see, there are numerous possibilities for investing and earning passive income.
But why generate passive income with tokenized assets instead of traditional ones? Here are some important advantages.
THE DEMOCRATIZATION OF ACCESS TO INVEST
A striking feature of the tokenized asset is that it is offered to the market in fractions of tokens, so that the shares are worth much less than the value of the asset.
A good example is a property worth 1 million reais offered in tokens of 10 thousand reais each. A much larger number of people can invest and obtain passive income from rent and from appreciation on the sale of the property.
MORE SECURITY AND EFFICIENCY
When you decide to invest in tokenized stocks, for example, you can be sure of one thing: there is no human interference in the operation, and you will like that very much!
Everything is electronically generated, from the offer to the purchase and especially the credit control of the expected revenues, thanks to two central entities:
- The blockchain: a network with the highest security protocols;
- The smart contract: a digital protocol with all the operations that must be executed by the blockchain – rights and duties, release of tokens, distribution of passive income according to predefined rules.
Besides greater security, the whole process is faster and error-free.
THE INVESTMENT COST IS LOWER
The operations are made directly between asset holders and investors, through their devices (computers, cell phones), which eliminates the intermediation of agents and brokers, as the case may be.
TOKENIZING ALSO BENEFITS THOSE WHO OFFER INVESTMENT!
You can generate passive income by tokenizing and offering personal or business assets, with the same (and other) perceived advantages for investors.
Virtually anything can be offered in tokens, including works of art, copyrights, and even future rights, such as precatory bonds. In this way it is possible to raise funds that can be applied to other investments!
Learn more about the benefits of tokenizing your assets!
BLOCKBR Digital Assets is a fintech that combines technological innovation and digital knowledge to transform physical assets into digital ones, in the asset tokenization process.
The offer of tokenized physical and financial assets, both current and new, is democratic and decentralized, which makes investing safer, simpler and more efficient.
We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.
Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?