Passive Income Through Smartphone Apps
So a few weeks ago I published a article on this YouTube channel where I walked you guys through all of the steps that you need to know when it comes to making a passive source of income in the laziest way possible using a simple app on a smartphone and that article did quite well and off the back of it I got so many different questions from you guys that wanted me to clarify a couple points so I thought I’d do just that I thought I’d make this article this morning and kind of give you guys a full understanding of a lot of the things that you was confused on and my goal is that whether you watch that previous article or even if you’re completely new to this concept you’re going to know exactly what you need to do when it comes to putting yourself on the path of being able to make a passive income in the easiest way possible.
Understanding Index Funds
Now before I touch on any of the points that you guys was confused on when it came to that previous video that I made I just want to give you a quick recap into how all of this stuff works. Now when I say that you’re going to be able to make a passive source of income essentially what is going to be involved is that you’re going to use your smartphone to invest into something called an index fund and all an index fund is is a group of different companies it’s a group of different assets that when you buy into it you’re essentially owning a small portion of those different companies so that when those companies do well you’re going to be able to see your money rise over time and of course on the flip side if those companies don’t do so well then you’re going to see your money decrease and I would say that that’s the main reason for these videos that I like to make I like to educate you guys on the best type of index funds to put your money into because of course I’m sure that we all have the same goal when it comes to making money and not losing it and this now brings me on to one of the first things that I think is important for you guys to realize which is the fact that there’s actually over 10,000 different index funds that are out there and that’s why it’s super important for you to know which ones are the best ones that’s going to protect your money and it’s also going to allow you to make money and if you watch that previous video you already know that the main index fund that I would recommend that you focus on as a complete beginner is the S&P 500.
The S&P 500 and Other Index Funds
Now the S&P 500 is made up of the top 500 companies in the United States and over the past 10 years 20 years the S&P 500 has always given back decent returns because if you didn’t know the United States is the biggest economy in the entire world so by buying into the top 500 companies it’s a great way for you to diversify your risk it’s also a great way for you to give yourself the best chance of seeing your money grow over time and this brings me on to one important point that I want to clarify which is the fact that the S&P 500 isn’t the only best one that’s out there you know we’ve got another one called the Vanguard Total stock market index fund you know this is another great choice there’s so many different options the only reason why I highlight the S&P 500 is because it’s a safe choice it’s easy to understand and it’s a great way for you to introduce yourself to this entire concept but moving on to one of the next points that seem to have confused a lot of people with that previous video that I made which is the idea of dollar cost averaging.
Dollar Cost Averaging Explained
Now dollar cost averaging sounds a lot more confusing than what it actually is all it means is that you’re going to buy into any one of these different index funds on a consistent basis whether you want to do it once a week whether you want to do it twice a week whether you want to do it once every two weeks is completely up to you and the whole idea about dollar cost average is that whether the index fund is performing well on that particular day whether it’s underperforming that doesn’t really matter you’re just going to bite into it whatever the case is and as long as you’re able to do this consistently that’s where you’re going to be able to reap the rewards one big mistake that so many people make when it comes to them wanting to make passive income this way is that they try and time the market they try and buy into it when they believe that they’re going to make money and if you’re always doing this every other day then all you’re going to do is yourself in a position where you’re going to lose money the way that I’ve been able to generate tens of thousands of dollars in profit in passive income using this method has simply come from dollar cost averaging one common thing that I’ve noticed with so many beginners that want to make a passive income by Index Fund investing is that they think that they’re going to be able to invest just once you know maybe invest $100 $200 and they’re going to be able to make money overnight when that’s just not how it works at the end of the day it’s all going to come down to you using dollar cost averaging you know whatever you can afford to invest and however often you can afford to do it you’re not going to be able to make profit by putting $50 just once of course you are going to be able to do that but as long as you’ve got the mindset of dollar cost averaging that’s when everything else is going to fall into place but this now brings me on to one of the next common questions that I got on that previous video or whenever I talk about the idea of making a passive income with index funds which is Sam I’m not based in the UK USA Canada Australia am I still going to be able to make money this way and to be completely honest with you I’m not really sure how things work in countries that are in Africa you know Asian countries any of the countries that I didn’t mention before I’m not really sure how things work when it comes to how you’re going to be able to buy into index funds but my recommendation is to do the necessary research to find an app that’s going to number one protect your money and number two it’s not going to charge you ridiculous fees when it comes to you being able to get started.
Apps for Index Fund Investing
Now I am going to go away do my research and come back and let you guys know which apps are the best ones to use if you are based in Asia or Africa but for now the only countries that I know are going to be able to get started with the apps that I recommend again is the UK USA Canada Australia and the apps that I do recommend is going to be either Trading 212 invest engine or Mumu and the main reason why I tend to recommend these apps is because of what I just said mainly because your funds are going to be protected up to a certain point and they’re not going to charge you ridiculous fees and on top of that they also give you a sign up bonus when you deposit a small amount of money and of course I use these apps myself as well and to quickly show you the potential of the money that could be made.
if I just jump onto my iPhone I’m going to set up a screen recording as you can see over here this is one of the investment portfolios that I use and with this one it’s about to touch £70,000, £70,000 is maybe around I don’t know $90,000 maybe a little bit less a little bit more but as you can see the profit that’s available for me to withdraw right now to my bank account is around £ 6,200 and to be honest with you I’m really grateful that I found out about this whole idea of investing into index funds because this money that you can see on this app over here I don’t need to work for it I didn’t need to do anything simply.