Part 3/8:
Investment income can include profits from assets like stocks, bonds, and rental properties. While these investments can indeed create returns, they hinge on the principle that you need capital to start with. For example, to replace an average annual salary of $42,000 with a 7% return, an investor would need a nest egg of approximately $600,000. For many, this initial hurdle is insurmountable.
Additionally, many so-called passive strategies promising quick returns often neglect to disclose the associated risks and costs. For instance, the allure of using a trading bot that promises to grow your assets quickly often turns out to be a trick, leading novice investors to face losses instead of gains.