Generating steady income with minimal effort is arguably everyone’s dream, yet people often fall into one of the following camps:
- They haven’t considered a passive income strategy at all
- They’d love a passive income strategy; however, they don’t know where to start and it feels like a lofty ambition
- They’re satisfied with their current income, therefore haven’t prioritised a passive income strategy
The reality is, generating stable passive income can be highly accessible and straightforward; and, it’s an important element of an investment strategy if you look forward to working less, whilst maintaining your lifestyle and a sense of security.
AGEM’s Passive Income Funds will cite two key metrics:
- Forecast Average Cash Distributions (passive income)
- Forecast Total Return (ongoing income + capital growth)
This multi-pronged approach is critical in terms of creating attractive co-investment opportunities. It means that you can have confidence in longer term results that outpace inflation, whilst also enjoying income throughout the life of your investment.
If you consider alternative approaches, at one extreme, you have a savings account that maintains liquidity, however, declines in value in the face of inflation. At the other extreme, you could have a high yield long-term investment with no ability to access cash if needed.
How we deliver passive income and capital growth
There are a few ways we position our portfolio to drive strong returns and create passive income. Commercial property as an asset in and of itself has strong merits – you can read more about the strengths of commercial property compared to residential real estate and term deposits in prior articles. Furthermore, we focus on properties in locations poised for growth, paired with established tenants in high-demand, non-discretionary sectors, such as allied health or childcare, which provides inherent stability. Throughout the life of the investment, we then work as active asset managers (addressing items such as tenant management, lease negotiations, building maintenance and commercial performance), thereby creating value and managing risk.
The above set of factors is what enables us to forecast growth over a long period, whilst also generating stable and predictable income for our investors.
For most people, if you hope to build wealth, work less, enjoy more flexibility, maintain a high standard of living in retirement or even bring retirement forward, a passive income strategy is a critical part of your investment plan. Additionally, your passive income strategy can easily be transferred to the next generation – creating generational wealth for your family.
