Passive income is income you generate without devoting much time or resources. Owning stock in Ford Motor Company is one of the best options out there right now. In my opinion, it could even better than owning an investment property.
It’s tax season and many of us are getting returns. If you were to take just $600 of that return and invest it in Ford common stock you would get approximately 63 shares (trading at $9.39 per-share today). Now that you own a little slice of the Ford pie, the company awards you with $0.15 per-share every three months. Doing a little math now… 63 multiplied by $0.15 equals $9.45, around 6.3% annually. This means, with just your dividend payout, you can buy an additional share once a quarter and slowly build your passive income empire.
Not only do you get the dividend payout but you also get the benefit of any lift the stock experiences. If you look at the data, Ford’s stock trades just under $12.50 on average so buying shares right now is a great deal. Knowing there’s always risk and fluctuation in any investment, if the stock price were to decrease the overall value of your investment will decrease. However, here’s the truly beautiful thing about dividends - you still get the quarterly payout and if the stock price lowers, it will be cheaper to buy additional shares.
Better than Owning an Investment Property?
I’ve always had in my mind that I want my passive income to be generated through owning investment properties and using them for rentals. It’s only natural...I’m a Realtor. However, owning an investment property takes a lot more capital than most people have, myself included.
Most lenders require a 20% down payment. Mountain America Credit Union currently has a 10% down payment loan available for investment properties. There are currently only 10 properties for sale in Davis County, UT between the price of $165K - $225K and only a few of those could actually function as an investment property.
Looking at some more math… let’s say someone buys an investment property for $200,000 and pays cash. The home is move-in ready and they immediately have people renting the property. The investor would need to make at least $1,050 a month in profit to make a similar 6.3% annual ROI.