Passive Income – The Yieldstreet Perspective

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A quick Google search of “passive income” will leave you with a litany of tips, tricks, hacks, lists, guides and “weird ways” to generate passive income while working, on vacation, awake or even asleep.

The proliferation of “side-hustles” has moved into the mainstream as many Americans struggle with stagnant wages and crippling student debt. As a result, many have sought to generate a second income stream, which has complicated the true meaning of passive income. 

We believe that generating passive income can not only help create long term wealth but also help provide an intermediate supplementary income stream.

At Yieldstreet, our investments are designed to generate passive income for investors. This means that after you initially invest, you will have funds, in the form of interest and or principal, flowing back into your account on a regular basis.

How often are you receiving payments that aren’t your paycheck?

This is drastically different from how stocks work. Unless you are investing in a dividend paying stock, you will not see any funds flow back to you unless you sell the stock or the company is acquired (outside of a special one-time dividend).

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Why Do We Think Generating Passive Income is Important?

Put simply: time and utility. Many investors want to have recurring cash flow from their investments that they can either use to reinvest, save or spend. Additionally, because of the short-term nature of our offerings (typically 12-36 months) investors know roughly when to expect to get their principal back.

Generating passive income can help provide flexibility and freedom. It removes the tough and potentially tax inefficient decision of when to sell a stock. This should allow investors a certain peace of mind when investing on Yieldstreet.

The Opposite of Active Income

We like to think about passive income as the opposite of active income – you are not actively working or participating in the accumulation of this second income stream on a daily, or even weekly basis. Earning passive income means relieving the continual need to buy, sell, or perform prolonged research for an investment after the purchase.

That does not mean investors should not thoroughly read and diligence investments before investing, however, after that initial period of research (and determination that an investment is right for you) the ‘active’ work ends.

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Unboxing the Investing Time Capsule

Investing is often thought of as a time capsule – something you bury away and don’t touch until you need money it for retirement or to pay for college. We believe these benefits are so distant and intangible that it can feel onerous to save or invest because you can’t feel or see anything coming back to you.

But when your portfolio generates a steady passive income stream and funds come back to you on a regular basis – that feeling of tangibility returns and its benefits sprout to life.  

Generating passive income through one’s investment portfolio can intermediate the two general needs of investing – creating more wealth and saving for the future. By having income flow back to you on an intermediate basis, you can use the funds intermediately to either spend now or reinvest towards the future.

This communication and the information contained in this article are provided for general informational purposes only and should neither be construed nor intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Any link to a third-party website (or article contained therein) is not an endorsement, authorization or representation of our affiliation with that third party (or article). We do not exercise control over third-party websites, and we are not responsible or liable for the accuracy, legality, appropriateness, or any other aspect of such website (or article contained therein).
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