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Sunday, September 20, 2020

IT'S THE DIFFERENCE BETWEEN PASSIVE INCOME FROM DEPOSITS, STOCKS, AND CRYPTO!


 

 

 Everyone's dream is to own assets and generate income from those assets. There are various ways to be used as a passive source of income. There is a way of saving with the bank's deposit system, there is also an annual profit from the stock assets it owns, and the most recent offered today is passive income from crypto.


So, what exactly is the difference between the three? Let's check out the following explanation!


Passive Income from Deposits

 

How to get passive income from these deposits is actually a relatively long way and already known to many people. However, these deposits depend heavily on certain factors such as the value of money (against inflation which makes the value of money each year lower), the economy of the country (where deposits are made), and also the interest/return from which/bank deposits are deposited. 


Factors such as the country's economy are an important factor in obtaining this passive income. For example, there are some countries with slow economic growth or in times of crisis that instead impose negative interest rates. 


Instead of receiving interest (or passive income) from banks, depositors should pay regularly to banks when they keep money in the bank. This step is carried out by the government of a country with the intention of giving the bank the freedom to lend and disburse the money to the community so that the economy can continue to run.


Beyond all that, in Indonesia itself, the deposit rate offered is still in the range of 5.62% to 7.42% per year judging by the data as of June 2020. In addition, there are several types of deposits to choose from, such as Time Deposits, Certificate of Deposits, and On Call Deposits.


Passive Income from Stocks

 

In addition to passive income from deposits, there is also one of the usual ways people do to earn passive income, namely buying shares of public companies. 


Actually, where does passive income come from stocks? 


When a person buys a particular company's shares, that person has ownership rights to the company, although the share may be only 0.1% of the company's overall market capitalization. 


From this, the shareholders are entitled to receive dividends or profit sharing, capital gain from the increase in the share price, and also have the right to participate in the General Meeting of Shareholders (GMS). 


Investing in open company shares is certainly not easy. Because there is a big risk that also comes with it. For example, the risk of a company going bankrupt, chaotic corporate governance that makes dividends or capital losses, or it can also be from the economic condition of the country in which the shares were purchased.


In a stock investment, you need to first learn the historical data of the company you want to buy shares in. Factors such as the potential for the stock to be used as a long-term investment, or factors as simple as the condition of the company.


You as a stock buyer should be smart in looking at opportunities as well as risks in investing these stocks.  

 

Passive Income from Crypto

 

In addition to passive income from Deposits and Stocks there is also a recent boom that people are talking about, especially if not passive income from crypto currencies. 


The wider adoption of crypto currencies in everyday life makes developers around the world vying to make crypto easier to use.


Currently, many Decentralized Finance (DeFi) development projects create a named system to make it easier for users to obtain additional crypto currencies with only their crypto currency capital. For example, yield farming system, or staking. 


If simply analogous to these two systems similar to a deposit system in a regular bank, get crypto money from the crypto you have. However, this yield farming and staking has several different ways of working. Of course, due to its decentralized nature, these systems make everything automatic and without intermediaries. Such as, market automation with the terms Auto Market Maker (AMM), smart contract, and others.


Yield Farming and Staking Platforms

 

If examined more in the purpose of Yield Farming and Staking it is the same, on the basis of technology that is also almost the same. However, the two have fundamental differences. If Yield Farming is performed on top of the Decentralized Exchange (DEX) platform, the Staking option usually exists on a centralized exchange aka Centralized Exchange (CEX). Both options are also actually sustainable, in yield farming activity there is also staking activity. How does it work? Everything is automatic.


To know more about Yield Farming and Staking you can read it in the article Learn Coinvest! 


Other Ways to Passive Income from Crypto

 

Besides, Yield Farming and also Staking, a way to get passive income from crypto can also be by becoming an affiliate in crypto companies. 


Many of these companies offer interesting programs around this affliate. For example, earn a commission by inviting others to join the referral link you have.  

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