Being Selective: Key to Passive Income amid High Inflation

The article was written by Samuel Rhee and was originally published on The Strait Times.

With inflation at multi-year highs, investors are on the hunt for regular streams of passive income to supplement their take-home pay. The most common choices are dividends from stocks and yield from fixed-income bonds, while some will swear on real estate and seek out rental income or try to hunt down inflation hedges. But there is an inherent risk that people may not initially see.

There are nuances behind the passive income strategies that require further due diligence. Not all investments that seem to provide an inflation hedge can deliver it in this environment of both slowing growth and high inflation. Passive income portfolio strategies that suit others may not suit you. Investing is a deeply personal endeavour.

Hunt for passive income

Core inflation in Singapore in June rose to 4.4 per cent, breaching 4 per cent for the first time since the end of 2008. Naturally, our first instinct is to find ways to protect and preserve our purchasing power and investors are already on the prowl for more income.

However, we are in a unique situation of not only higher inflation but also slowing global growth. The International Monetary Fund expects global growth to further slow from 3.2 per cent this year to 2.9 per cent next year. China’s economic slowdown is on investors’ minds while scorching inflation has been driven by cost pressures resulting from the persistent spread of Covid-19 around the world and the Russia-Ukraine war. With recession looming, simple inflation protection strategies may not always work.

For example, high-flying commodities did well in the early stages of inflation spiking but growth concerns have seen prices collapse in recent months. Often in this type of environment, investors pile into fixed-income bonds due to their relatively defensive qualities and the relative protection they provide over more volatile assets like stocks and commodities. To be clear, bonds have gone through several difficult months but the rout is largely behind us.

Rising interest rates and slowing growth probably warrant a second look at fixed income, especially if you are a long-term investor. In a rising interest rate environment, investors can buy bonds through a laddering strategy. This effectively allows investors to earn income from high-quality credit and use the income and money from maturing bonds to reinvest into fresh bonds that will pay a higher coupon.

With rising interest rates, you can generate better yield from similar or better-quality bonds without taking as much risk. Professional bond investors do this systematically and they can also use tools such as hedging to spread out risk and reduce cost.

Bond funds also allow for greater diversification benefits by giving investors exposure to hundreds of bonds from different countries and sectors, while managers are able to reinvest the proceeds from redeeming older bonds into new instruments with higher coupon rates or better prices.

Investment amounts in such unit trusts tend to be small enough to lower the hurdle for all retail investors, whereas a single corporate bond in Singapore is typically priced in a large denomination of at least $200,000 with costly transaction fees.

In this trying time, simple strategies for passive income may not always work.

The other popular form of passive income is from dividends. IHS Markit data shows a projected 6.5 per cent growth in global dividend payouts this year. Investors have continued to pour money into dividend-linked funds because companies with a consistent dividend payout are meant to have defensive qualities. Large companies dominating with pricing power or the ones that are able to grow in an inflationary or slower growth environment stand out. Those who do well have a strong balance sheet to withstand the growth downturn while maintaining cash flow and keeping dividends stable. Because they do not need to borrow more, they are less affected by rising interest rates.

Again, being selective in this environment is key to securing steady passive income. As an example, both Singapore real estate investment trusts (S-Reits) and global Reits have been sold down amid inflationary pressures, rising interest rates and growth concerns. Reits are listed equities so when the market comes down, Reits will not be protected and will trade down together.

While they may have some defensive qualities like other dividend stocks, the sector may not do as well as some people think, especially if property prices also start coming off. Reits pay out distributions from collecting rental income and rely on both strong business activity in their specific real estate sectors and low operating costs to sustain distributions. The rapid rate hikes have hit Reits particularly hard due to the much higher interest costs. Past acquisitions were funded by cheap debt, so they will slow acquisition momentum.

Reits also face higher operating expenses for their portfolio assets due to inflation, so it is a double whammy. These may pressure some Reits to cut their distributions, especially those that did not adequately hedge their costs of borrowing to fixed rates or cannot improve their operational efficiency.

While physical real estate can potentially hedge against inflation when rents rise, similar to Reits, they will see higher interest and rents rarely keep pace with high inflation rates. Maintenance costs will also rise.

The Endowus Global Real Estate Portfolio – one of Endowus’ satellite portfolios that make up a core-satellite strategy – is invested in diverse global real estate and infrastructure companies, offering an effective hedge against inflation. It enjoys strong pricing power or even explicit long-term pricing contracts to pass the impact of rising prices to its customers.

Life stage matters

Individuals at different stages of life will have different financial priorities and goals. Retirees may prioritise more stable payouts to supplement their retirement income. But if you are part of the sandwich generation, you may be balancing more family expenditures while saving for retirement. Investors in this life stage can look for a balanced portfolio of long-term fixed income holdings and dividend-paying counters, such as the Endowus Income Portfolios managed by some of the leading global fund managers.

As for young investors, the earlier you start investing, the more time you have to grow and accumulate your wealth. Looking for passive income in this investing environment is no walk in the park. Rather than trying to find the best single stock or bond to buy, seek out diversified portfolios or funds, then commit to a regular investment plan through a dollar-cost averaging strategy. Sitting on your hands will only result in inflation eating quickly into the value of your money.

How to Earn Passive Income with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

Looking for a Safe Investment? Try Your Best to Avoid FOMO

Beginners in investment tend to make decisions that are linked to the psychological concept of FOMO, or fear of missing out. Instead of focusing on their goals, investors pay heed to the market noises that may cause lots of damage to their investment and even mental health. If you have just stepped into the market, try your best to stay away from FOMO and start investigating more sustainable investments.

FOMO – the enemy of sustainable investment

Fear of missing out is the feeling of apprehension that one is either not in the know or missing out on information, events, experiences, or life decisions that could make one’s life better. When it comes to investments, FOMO can strike when there is a big rally or investment trend that the news or traders are talking about. Generally, it means that a trader is feeling anxiety because others are making money on an investment’s price movement, and they’re not. But the desire to be part of the bandwagon and make money off the trading strategy others are profiting from could create a retail investor or an institutional trader to enter a position before properly analyzing it to determine if it is a good investment.

The question here is despite the risk of buying high and selling low, many people joined these rallies anyway. Why? The psychology of FOMO is linked to complicated reactions of our brains that we cannot easily understand. However, they all form some typical actions and thoughts that we can realize in all traders. First, watching others make a lot of money on a particular stock or token having a massive rally may make you feel obligated to join in and get in on the gains, even if the logical part of your brain is telling you that the highest rate of interest has already been passed.

Additionally, knowing that acquaintances have already had a financial breakthrough with a particular investment can give you an unfounded sense of confidence about your investment choice, which could result in you ignoring advice from investment experts or research analysts you often take. Something deep down in your mind says that you are more likely to lose money trading than you are to profit. However, when thousands of traders talk about how they benefited from one coin/stock, the feeling of losing or being a fool for not catching the opportunities still encourages you to go ahead. It generates emotional responses; things like fear and impatience win out over discipline.

The sad consequences of FOMO

People always act out of FOMO with the wish of changes in their financial situations or early retirement. However, FOMO often brings more risks than rewards.

The common investment mandate is to buy low and sell high. But FOMO in trading often works contrary to that as it encourages investors to buy when stocks are already high. Remember that just because stocks are performing well does not mean that they will continue to do so in the near future. In fact, many investors lose money by investing in price movements or market trends right before they’ve run their course. That’s why trading does not often result in a positive return on investment when spurred by feelings of FOMO.

FOMO investment decisions often happen on meme stocks or cryptocurrencies.

Moreover, the hidden risk of FOMO is higher than just a regular investment decision. FOMO-related decisions often happen on highly hyped investments like meme stocks or cryptocurrencies. They are potentially inflated like bank savings and leave you without a dime. The volatility of meme stocks and cryptocurrencies and the speed at which their prices change make them even riskier than traditional investments. You could be distracted for less than 30 minutes and come back to see that your portfolio has cratered, or you could have a meeting at work while it goes down 40%.

Another trend of FOMO investment is buying a stock with an extremely low price, hoping it will reach its peak, and so do your life. Trends like this often happen when a high and popular stock drastically drops its price for some sudden event. People tend to spend their money on these stocks with the expectation that they will be back to the top. However, not every project has the power to return to its victory. The case of Luna, which was once considered a sustainable coin, is an example. When Luna was at its bottom, thousands of discussions, memes, and news covering its future recovery were spreading over the internet and creating a massive FOMO. Even homemakers would like to invest in it. However, it broke investors’ dreams into pieces as it kept dropping and showed no sign of recovery. Despite its hidden absurdity, it is evident that FOMO is still successfully persuading investors to destroy their investment efforts.

Start safe investment, and stop FOMO! 

There are a bunch of reasons why people tend to follow FOMO: they may feel unsatisfied with their current lives, they are too dependent on social media, or they have not gained enough investment knowledge. Nevertheless, the most popular reasons mainly relate to the wish to handle their financial problems. It is evident that FOMO primarily works for people interested in short-term rewards. However, even such low expectation is not always possible to achieve. Therefore, the need to resist the temptation of FOMO should be a priority in investing. The most sustainable way to do so is earning yourselves a passive income that comes with security and peace of mind. For instance, passive income from a secure investment may be the best medicine for your FOMO addiction.

Passive income is also a good choice for people who have experienced the bitterness that FOMO brings up. Ultimately, you may not be able to build a time machine to take you back in time to purchase the stock that got away or that property that would’ve made you millions. But you can take steps in the present to “recover” and reach your long-term goals safely and sustainably.

Let’s take a closer look at some of the most sustainable investment choices. They may not all be appropriate for you today, but over time, the best investments for your needs can change, and you may feel grateful when having spent time digging into them.

How to Earn Passive Income with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

Passive Income, How To Get It Working For You

The article was written by Melissa Houston and was originally published on Forbes.

It’s the best kept secret of the rich, passive income. The goal of passive income is to get your money working for you, and the more you have invested, the more passive income you will create. But not everyone knows this.

Creating wealth does require a strategy and discipline. It’s not how much money you make that makes you rich; it’s how you manage that money. And passive income is a popular strategy used among the wealthy.

What is passive income?

Active income is where you earn wages and sales commissions, whereas passive income requires very little labor. Bankrate.com states that passive income comes from a source other than an employer or contractor.

Passive income complements the income you are earning from your primary job. It is ideal to have several streams of passive income set up to protect your primary source of income, should you be unfortunate enough to lose your job.

How passive is passive income?

Passive income is commonly known as a way to make money in your sleep, but is that true? You see social media influencers promoting ways to make passive income by creating digital courses. You hear financial planners telling you to create passive income through your investment portfolio. Others ask you to invest in real estate and rent out that property to receive a rental income.

But what you need to understand is that passive income takes work. Some investments take more work than others, but to think that you can invest and not monitor the performance of that investment is a mistake.

The amount of work your passive income will require will depend on what you have invested. But it is misleading to think that you can check out money management, and even investment portfolios require monitoring, and passive income isn’t really passive.

Benefits of having passive income

Passive income streams can help you with early retirement plans. As the passive income comes in, you can reinvest that income into other interest-bearing financial assets that also produce passive income. Essentially you are building wealth on top of wealth.

The main benefit of passive income is that it creates financial stability in your life. Indeed, money does not buy happiness, but what money does do is provide opportunity, and when you manage your money well, it reduces financial stress.

You have more financial freedom when you have money, and it allows you to be no longer dependent on a paycheck, and you can even retire early if you manage your money well.

Creating passive income aims to create a life where you can live off the passive income made from your investments.

Popular types of passive income

There are many types of passive income that you can create for yourself, and some of the most popular methods are:

1. Rental income

When you purchase a property that you can rent out, not only are you earning money on the rental income you receive, but your rental investment will appreciate over time. When you own a rental property, you need to provide services as a landlord. However, when the money is managed well, you may be able to afford a service manager for the property, increasing the passivity level for this income.

2. Investment income

When you invest your money in bonds, you preserve the initial investment, but you receive interest payments for the money you are investing. These interest payments will depend on the terms and conditions of the contract, but there is a high level of passivity in this type of investment.

3. Dividend income

When you purchase stocks in the stock market, you will receive dividend income on that investment, depending on your buying type. According to Investopedia, dividend income is paid out of the profits of a corporation to the stockholders. When you purchase stocks that pay dividends, you will not only earn money through dividend payments, but your stock may increase in value.

4. Digital courses

Social media influencers often speak of creating digital products to sell, such as courses. There can be much work to create a course on the front end, but it is evergreen with the proper marketing and sales strategy once that course is completed. You can bring in consistent income with that course, and you will need to monitor your sales funnels to ensure they are working and consistently bringing in revenue.

5. Side hustle

Side hustles have gotten very popular in recent years. Side hustles are jobs that you work at outside of your regular 9-5 job. Side hustles supplement your primary income, and you can use that extra and invest it into other types of passive income and get that money working for you.

6. Angel investing

Angel investors are wealthy people who invest their extra money into startup businesses that need capital by providing loans. The angel investor agrees with the business owner, outlines the loan’s terms and conditions, and makes passive income off the interest payments those loans generate.

The secret that wealthy people know is that by building your investment portfolios and creating passive income, you are essentially preserving your capital investment and earning money on that money.

The bottom line is that creating passive income for yourself is a great way to build wealth and secure your financial future. The more money you have saved, the more likely it is to attain financial freedom at an earlier age, and financial independence gives you more time to do things you love to do.

How to Earn Passive Income with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

There’s No Better Time to Start a Passive Income Business than Now

The article was written by Peter J. Burns III and was originally published on Entrepreneur.

The concept of passive income has been around forever. Since passive income does not have to be actively managed, it is much more scalable. This affords entrepreneurs even more time to pursue both active and passive income opportunities.

I’ve started many of these businesses myself over the last decade, as well as helped others. With this experience in mind, I want to share important steps in preparing to participate in a passive income stream, and what to look out for ahead of time.

Grow your credit score

Foremost to building a passive income stream is having a good credit score. This opens many doors for extensive capital, which can be surprisingly cheap. Even if you have the funds sitting in liquid investments, borrowed capital is a better option. A good credit score allows you this capital, which is the lifeblood of any venture.

You should want to maximize leverage, too, never using your own capital when you can make a profit off of someone else’s debt capital. By leveraging debt capital with suitable terms and interest, you maximize your return on select investments while your capital remains intact.

Cultivate a network

It’s important to have intellectual resources around you. Picking the right passive income opportunity is not easy. If you have cultivated a network of entrepreneurs that you trust, you can discuss your options and get their intelligent feedback.

The bigger the network, the more valuable it is, so don’t be afraid to share your great ideas with those around you. You can even share your ideas with your broker, yet understand that they may be territorial and worried that you will divert capital away from them.

Find something proven, and be patient

Proven passive income streams are aplenty in e-commerce. There is no disputing the benefits, and efficiencies, of ordering online, especially with an increasingly remote workforce. This is one example, but the truth is that the Internet and its capacity for efficiency will spawn new passive income ideas for decades to come.

Before choosing an investment, do your homework and identify others who have been successful with that particular investment before you. Then, don’t expect to be immediately successful, just because they were. It may take a few months longer than you expected, to experience that same level of success. Impatient people rarely succeed as entrepreneurs, as they’re likely to bail out at the first roadblock. To succeed, you must sometimes put in meaningful work, and that often takes more time than you’d bargained for.

Be careful

Many people are selling passive income ideas, but with limited expertise behind them. These people are tantamount to used car salesmen. Do your due diligence to determine if experts are creating the engine behind the sales forces approaching you, and whether or not they will be accessible in some form or fashion as you pursue this new venture.

You should also attempt to identify whether or not the purveyor of a particular opportunity has deep pockets. If you burn through the initial capital and have nowhere else to turn to but a traditional bank, that will not be good. Banks have a limited understanding of passive income projects, so you are better off conferring with the purveyor beforehand to make sure that you’ll have access to reasonably priced capital in the unlikely event that you’ll need it.

How to Earn Passive Income with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

Passive Income Is All The Rage: Here’s How You Can Take Advantage in 2022

The article was written by Rachel Layne and was originally published on CBS NEWS.

With inflation at a 40-year high, prices on just about everything are up for Americans. Even if you have enough to pay the bills, you may be concerned about how to earn enough for retirement, or just having a buffer.

Enter passive income. That’s a stream of funds that – once you set things up – typically needs little regular effort to maintain. You may have heard the phrase “earn money while you sleep.” That’s passive income, whereas active income involves trading time for money.

“In this modern world, where even if you have a salary, it’s still good to have multiple sources of income,” says Cynthia Meyer, a certified financial planner (CFP) with Real Life Planning in Gladstone, New Jersey who works with real estate investors.

Are you interested in earning some extra income? Here’s what you need to know about how to earn passive income – including how to get started.

8 passive income ideas

There are dozens of kinds of passive income streams. You should be able to keep your day job while generating passive income.

In need of a passive income idea? Here’s a quick list.

  • Regular interest from a certificate of deposit (CD), U.S. savings bond or high-yield savings account may be beneficial as interest rates rise
  • Dividends from stocks or other investments
  • Royalties from a creative endeavor like a book or website
  • Affiliate marketing, earning cash for running advertisements or posting monetized links on your website or social media account – or even wrapped around your car
  • Make money online activities like starting a blog, taking surveys or testing apps (you can get set up with a free blog easily – just follow these simple steps)
  • Money from a rental property
  • Renting out your home short-term
  • Selling items on marketplaces such as eBay or Amazon

“They’re all not necessarily passive. They might involve some activity, But once that kind of side-hustle is up and running, it may require not too much effort,” Meyer notes.

How to set up a source of passive income

In some cases, such as buying stocks or property, you need upfront cash. Others, such as affiliate marketing, take setup time and plenty of sweat equity. You should also weigh risks against the likelihood of regular income. Lending money can be riskier than buying dividend-bearing stocks or a savings bond, experts note.

A dividend, for example, “provides a decent return on investment and is very reliable, with zero effort,” says Erin Hadary, a CFP with Denver-based Moneta Group Investment Advisors. “However, you need a lot of money to earn money. $100 [per] month would take roughly $40,000, invested in a 3% dividend stock basket.”

Are there some types of passive income that require little money to start?

Yes, but be prepared to put in “sweat equity” – your time. Activities like affiliate marketing or renting out your home take some initial setup and may require maintenance to produce a steady stream of cash.

Royalties from intellectual property like books, patents or music can also offer passive income. You should always thoroughly research your idea before jumping in.”Most people severely underestimate how difficult it is to consistently make money from books,” says Hadary. Other categories can “require some upfront money.”

How much up-front time will I need to invest to earn passive income?

Setup varies depending on the kind of income stream. Take real estate. Unless you’re in the real estate business as a profession, like real estate agents, the Internal Revenue Service (IRS) generally considers these kinds of investments passive income, Meyer says. Be sure to check the IRS website for details on passive income, like renting out property.” Practically speaking, it’s both passive and active,” Meyer says. “It’s passive in the sense that you’re getting rents every month, but you still have to run your real estate like a business. That would be the caveat there. “If you own property and are renting to tenants, for instance, there might be work up front to set everything up as well as regular maintenance.

“Whether or not the tenant pays the rent, you still have to pay the mortgage, the property taxes and insurance and things like that,” adds Meyer. Some investors hire management companies to take care of those details, making the investment more passive, Meyer notes.

Can you earn enough with passive income to make a living?

In some cases, yes, experts like Meyer say. But it takes time to build.

“To live off your real estate, you’re looking for positive cash flow,” Meyer says. “So even in an environment like now where the rents are generally going up – it takes a while to build up any compound return. It takes a while to get to the point where you’re like, ‘Oh, wow, that’s really a lot of money.'”

Depending on the passive income mechanism, setting up an income stream can be daunting (or even temporary). Instagram accounts and blogs can lose popularity, for instance. And remember, most passive income streams require some serious exploration and work to set up. Still others can be risky, experts note. “Unfortunately, it’s next to impossible to find a true passive option,” Hadary says.

How to Earn Passive Income with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

How to Neutralize Inflation with Passive Income

Under the circumstance of inflation rising to record rates worldwide, the need to neutralize such acceleration is on every investor’s mind. The look for secure investments becomes essential for those who of us wish to earn a sustainable stream of passive income to maintain our living standards. And it might be easier than one might think.

The Upsetting Rise of Inflation 

There have been multiple drivers of the inflation surge at the current. On the one hand, the fourth pandemic wave is accompanied by high inflation levels, which have rocketed to nearly 8% in many countries. This is followed by noticeably higher prices of essential goods. On the other hand, the outbreak of the Russian invasion in Ukraine in February 2022 brought higher fuel costs, leading to manufacturers increasing prices. These facts and figures make us face an unavoidable truth: the inflation pressures in 2022 will undoubtedly keep increasing.

For the record, the annual inflation rate in the US had already accelerated to 8.6% in May of 2022. This has been the highest since December 1981, compared to market forecasts of 8.3%. Many households have faced the trouble of covering higher monthly costs with the same income when the prices of essentials have increased unexpectedly and have not shown any sign of stopping. According to the Bureau of Labor Statistics, energy prices rose 34.6%, the most since September of 2005, due to gasoline (48.7%), fuel oil (106.7%, the most significant increase on record), electricity (12%, the most significant 12-month increase since August 2006), and natural gas (30.2%, the most significant since July 2008). Food costs surged 10.1% – the first increase of 10% or more since March 1981. Significant increases were also seen in the prices of meats, poultry, fish, and eggs (14.2%). Other increases were shown in the cost of shelter (5.5%, the most since February 1991), household furnishings and operations (8.9%), used cars and trucks (16.1%), and airline fares (37.8%) while the cost of new vehicles eased slightly (12.6% vs. 13.2%). Meanwhile, the core inflation rate slowed for a second month to 6%, compared to expectations of 5.9%.

Passive income is a sustainable way to fight the rising inflation.

Passive Income from Safe Investment: Best Decision to Maintain Living Standard

People tend to combat rising inflation in 2 primary ways: tighten their belts or increase income.

For the first one, you need to review all your bills, then consider and cut off lots of stuff you don’t need. You may also shop for the best price or negotiate for the lowest spending. But it’s not accessible or sustainable when you have to lower your living standard for a long time. It is unarguable that living in long-term deprivation conditions is not our life’s purpose.

The second does seem better, but only if you do it correctly. Some people choose to improve their income by trying to find a new job, freelance jobs, or get a promotion which gets them under another type of extreme pressure. The inflation may go up after some unexpected events in a week, but the same thing does not happen to their salary when not everyone can be offered a better new job or increase their pay overnight. Moreover, the unemployment rate in some countries has nearly returned to pre-pandemic levels, and many businesses are struggling with recruiting strategies. Many households show their problem management skill by making extra money outside of their job by selling things they are not using on eBay, Facebook Marketplace, Craigslist, or other local social groups… But this seems to be unsuccessfully providing them with the regular income needed.

Still, there is always a proper way to fight inflation that you may or may not have tried before: improve your passive income by investment. Bank saving may always be your first thought when hearing the term “investment.” However, considering the current interest rate, which is far below inflation, other types of investment should be preferred. But whether these different types of investment make sense depends on how experienced and intelligent the decision you make and when you need to access the money. For people who have not yet learned to be an investor, where to put their possessions also creates major headaches. Additionally, there is always the risk they suffer when things happen out of the blue, making all their savings evaporate in a week or even a day.

So, is there any way to neutralize inflation that is safe, sustainable, and offers a high return? Good news: at Foundation Capital, we can provide you with the service you may have been searching for far too long.

Foundation Capital – Your Best Companion to Secure Investment 

Based in Hong Kong, Foundation Capital offers investment services focusing on Lease and Buyback investments in the construction field. The company has been operated with the mission to enable investors to realize and get substantial gains from the fast-moving and highly lucrative construction investment opportunity. With nearly 15 years of contribution, we can assure investors:

  • Simplicity: Unlike other high-return investments, the premise of Foundation Capital is quite simple and easy to catch up with: you invest in the equipment and technology that are the foundation of all megastructures and are owned by Foundation Capital. We then lease that equipment to those businesses which are managing the projects and earn you a leasing fee each month. At the end of five years (or longer), you get your money back by selling the asset at the price you paid.
  • High returns: Of all the investments you are considering to maintain high standard lives during inflation, Foundation Capital can promise you a monthly passive income that helps you wake up every morning satisfied that you are handling the situation well. Why? because we are trusted by investors worldwide, and in 2019, our investment solutions rewarded that trust by delivering a 24.76% return. You can choose between a fixed 14% return or a floating rate return which historically has delivered higher income.
  • Safety: Strict business relationships and strategic partnership between Foundation Capital and the construction companies that lease our equipment will help to verify their creditworthiness through a rigorous audit process and protect your investment. In addition, your assets are insured at all times.
  • Sustainability: Megastructure projects require huge amounts of construction equipment which is why construction companies have an ever-increasing dependency on rental and leasing agencies to complete their projects. The demand will undoubtedly keep rising in the situation that more and more megastructure projects are rising all over the world. Not just your choices of investment package but your interest can also be optimized and maintained.

For more credit, you can check out our project partners here. Put your faith in Foundation Capital; we will provide you with a sustainable source of passive income with 100% capital preservation.

 

How to Earn Passive Income with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

 

How to Build Passive Income

The article was originally posted on HSBC Hong Kong.

The right type of investments may pay you a regular income in addition to – or even in place of – your full-time job. Sound like a far-fetched and impossible dream? Well, it isn’t! Let’s take a look at how you can start generating passive income.

What is passive income?

Passive income is money that regularly goes into your bank account with little effort on your part, no matter how the market performs. Unlike growth investments, where you’re hoping your wealth grows over time, passive income gives you a more stable cash return. Passive investing also will save you from worrying about market volatility and macroeconomic uncertainty, all of which could impact the performance of growth investments directly.

Some experts have called passive income an “infinite potential income stream” because of the myriad of possibilities where you could generate this sort of income. Let’s explore some examples of passive income you could consider for your investment portfolio, so you may receive steady returns, literally even while you sleep!

What kind of investments can help create passive income?

Now that you understand the fundamentals of passive investing, the next question you’ll likely have is: what passive income ideas are there to explore? Passive income is usually generated from investments that carry lower volatility, such as dividend stocks, bonds /certificates of deposit and life insurance plans .

Revenue streams and income flow on these types of investments are relatively stable and more predictable as they’re less volatile than other investments – they don’t go up and down in price as much. This makes them a relatively stable part of your portfolio; you don’t need to spend as much time monitoring them.

They’re also more suited for long-term investing, so you don’t face as much stress over having to ‘time’ the market accurately, buying when the price is at its absolute lowest and selling at the top. If you’re the sort of person who really values peace of mind and who doesn’t want to be kept awake at night worrying about market volatility, investments that generate passive income are likely to be a great fit for you.

Why is it good to start building passive income early?

1. You’ll get a shot at achieving financial freedom

Passive income can come from investments that pay you dividends and interest you earn from your share holdings. For instance, if you’ve identified strong investments with dividends that grow by 15%, 20% or even 25% annually, then the passive income generated from you staying the course longer term with these holdings is probably going to be more than sufficient to sustain your living expenses. That could give you the financial freedom you need to leave your day job or main source of income and pursue other personal dreams, if that’s what you’re aspiring to do.

2. Reap the benefits of compound interest

And speaking of these dividend or interest payouts? You can take these payouts in cash, but if you re-invest it instead, you can start to benefit from compound interest as well – a win-win situation for you.

Your new dividends and interest will be based on the new total, so every time you re-invest these funds, you may earn more interest and more dividends, allowing you to grow your portfolio balance.

Are there risks involved in building passive income?

Although passive income investments are less volatile, just like all investments, there’s still a risk that you could lose the money you invest, or that you might not have the revenue stream you had expected.

There are many reasons for uncertain outcomes. A company you own shares in could be hit by a scandal that causes its stock price to plummet, political and social events happening all over the world could have an impact on the value of your investment, and even currency fluctuations could affect performance.

To manage risk optimally, don’t put all your eggs in one basket. It’s a good idea to consider putting your money towards a range of investments, in order to diversify your revenue streams. A good example is considering unit trusts, where you’ll see your investment spread over a number of securities, instead of just one. That way, if you lose money on one, it could be balanced out by your other investments.

Another way you may mitigate investment risk is to consider including endowment plans in your portfolio. An endowment plan is a type of life insurance that is able to provide guaranteed returns (in the form of a lump sum payment) even over a short timeframe, and yet is less impacted by market volatility, so it’s a great way to generate passive investment income for you, without requiring you to constantly worry over how the economy is performing. There are usually different maturity tenors attached to endowment plans, so you can choose the time period that suits your needs best.

 

How to Earn Passive Income with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

Best Secure Investment in a Chaotic World

There have been times during these past 3 years the world dramatically spins out of our control, leading investors to question how best to position their investment with the lowest risk. If you are one of them, maybe it’s time for you to take a step back and adjust your investment portfolio for a more sustainable profit.

Secure investment within upside-down circumstances

We face Covid. We face environmental disasters. And suddenly, rumors of war are not just rumors since Russia launched its blitzkrieg against Ukraine. Consequently, inflation is rising worldwide, leading to potential economic downturns. From Feb 19 to March 23, 2020, the S&P 500 Index finally hit bottom and lost about 34% of its value, showing us that the stock market suffered from unpredictable losses due to the pandemic. Investors came to Cryptocurrency as an attractive investing method, but Luna made a red flag when dropping 99.7% in under a week, causing its investors to face a severe depression. These ups and downs constantly threaten our income, regardless of investment channels.

We cannot deny that the world has changed and will continue to change out of our control. Various concerns are compounding in investors’ minds regarding financial decisions, preventing us from a restful sleep at night. That leads us to the question: “What is the point of investment if you have to live your life under the fear of “losing all” after a day?” If crises keep happening for reasons we have never thought of, can we have the ability to forecast where to put our money?

For investors who can’t afford more risk, putting your possession on high potential (and, of course, high risk) seems not a good choice now. The world economy may become more stable, but it is the future’s story. The most necessary thing they need to do now is to navigate this financial maelstrom to build a risk-adjusted saving and investing strategy. That’s why a more sustainable investment strategy is now needed more than ever.

Secure investment by Lease and buyback investments – what to expect?

There are always multiple ways for investors to get a monthly profit without sudden dramatic loss. We have high-yield savings accounts, dividend-paying stocks, money market accounts, fixed annuities… But if these ways don’t sound promising or sustainable to you, Lease and Buyback investments are a smart option.

Lease and Buyback is a form of investment that generates constant “passive” or “unearned” income. The premise is simple: you own something useful and rent it to somebody else. After that, all you need to do is to sit back and receive cash payments into your bank account every month as a leasing fee.

Secure investment in Megaprojects generate a sustainable stream of passive income in the current economic downturn.

One of the more sustainable assets for safe investment is construction equipment as the construction of megaprojects is growing all over the world. Despite the current economic situation, megaprojects are still being constructed worldwide, such as The Grand Ethiopian Renaissance Dam, which values at up to 5 billion USD, Dubailand with an estimated cost of around $76,000,000,000 or California High-Speed Rail in California with $98,000,000,000 for the budget and so on…

It’s simple to understand why investors believe in a sustainable demand from leasing their equipment. Lease options vary but are typically for a year or even more. It also involves less upfront cost as you usually don’t have to make a down payment and allows contractors to try a new model every couple of years. That’s why construction agencies nowadays choose leasing instead of owning equipment due to its outstanding features that combine the benefits of renting and buying. However, not everyone can afford a whole pack of equipment or machine, and that’s why the idea of dividing equipment into many assets for investors was brought up. Specifically, investors can buy machinery and equipment as an asset, then lease that asset back – via trustable leasing partners – to those firms managing the building developments. This innovative and secure investment allows investors to earn a high return percentage each year. In a stage where you can go from all to nothing after a night, dividend equipment leasing may assure you a nice sleep at night with a more sustainable return daily.

Start your secure investment with Foundation Capital.

Foundation Capital is one of the initiatives in lease and buyback investments regarding construction equipment. We provide investors with investment choices between a fixed 14% return or a floating rate return. Moreover, our investment policy includes “the buyback choice,” which means you can sell your assets at any time and get all your initial investment back. We have accomplished our mission of assuring a sustainable income for our customers by partnering with bunches of mega projects worldwide. Water Diversion Project, Craziest Engineering Projects in China, Al Maktoum International Airport in Dubai, etc…..… are some of the names we have been working with. You can be the investors in these megaprojects and profit safely from them, as long as you put your faith in us.

Getting paid monthly in cash with a straightforward strategy, keeping your capital protected by a guaranteed buyback policy, and receiving high returns with advice from our consultant is what Foundation Capital can commit to you. No more staying in the mood of sensing market risk; let us help to optimize your “safe investment.”

For more information on how Foundation Capital invests, please visit the links below. We are here to bring you a secure investment that helps you to enjoy life in the best physical and mental condition.

How to Get Started with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

The Importance Of A Passive Income And How To Achieve It

Is there anything more appealing than making money with little effort? As farfetched as it might sound, it is more than possible to achieve such a goal once investors find a sustainable way to make money work for them. Most notably, you invest your money in a product that will generate a stream of earnings, often referred to as a passive income. 

Generally, passive income is money that flows in regular intervals without the need to put in a considerable amount of effort to create it. The ease of generating passive income has turned the concept into one of the most talked-about and sought-after elements of personal finance. Nevertheless, not every passive income stream comes with sustainable and rewarding returns. This article explains why passive income is important and how to build a passive income stream successfully.

Why is passive income so important?

In a nutshell, passive income is important because it provides financial stability, security, and freedom. Furthermore, it can positively impact investors’ potential to accumulate wealth in just about any financial situation as it is not constrained by time and effort. Here are four reasons why passive income is important:

  1. Passive income improves financial stability: Financial stability is one of the most important milestones on every investor’s road to wealth. It allows investors to weather financial storms such as inflation, crisis, or pandemic. As a steady flow of cash, passive income can cover investors if they lose a regular income stream or need to handle an emergency. At the same time, with passive income, investors can count on money coming in without having to grind for every dollar they earn. It allows investors room to maneuver and look at the big picture. Thus, you are able to make better financial decisions, which, in turn, enhances your financial stability.
  2. Passive income creates room for financial freedom: While financial freedom has different meanings to different people, a sustainable passive income stream can practically fulfill every need for such a concept. For instance, passive income can enable investors to work towards the goal of eliminating debts. At the same time, it can help build long-term saving goals or even early retirement. In other words, the more passive income you develop, the easier it becomes to stay free of issues in your financial life.
  3. Reduced anxiety and stress: Stressing over money is often cited as the main source of stress, even more than politics, work, or family. It also can lead to mental and physical problems and impacts everyday life. Passive income can prevent such issues by providing security and alleviating the fear of not being able to process payments. It brings financial support and long-term stability. Thus, passive income allows investors to manage themselves, their time, and their assets more effectively. The anxiety and stress over the future financial situation are also reduced.
  4. More freedom to pursue your passions: A sustainable stream of passive income helps investors escape the paycheck-to-paycheck lifestyle. When investors are no longer under the pressure of maintaining undesirable jobs to make ends meet, thanks to having a steady passive income stream flowing into their finances, they are allowed to have options. These options include more freedom to pursue their passions or dream careers or even opportunities to make more robust and meaningful connections with the people and the world.
Investing in the real estate and construction industries is a reliable way to generate high reward passive income.

How to create a sustainable stream of passive income?

As promising as it might sound, finding a viable passive income stream might not be simple. Earning a sustainable passive income does not only take an investment of either money or time upfront but also requires investors to have suitable lifestyles and skills. Moreover, not every passive income stream can generate sustainable and rewarding returns. Here are four possible options to consider:

  1. Buying cash-flowing assets: This is probably the most common passive income stream where investors can earn financial returns produced by their assets. Examples include industries such as real estate and construction or investing in stocks. Investing in this passive income stream can generate sustainable and high rewards, yet it can take a lot of time to learn how to make it a profitable venture. Thus, investors should consider hiring a management company to monitor the property and communicate with renters.
  2. Building assets: By creating their products or services, investors can also earn passive income. Popular examples of this stream include offering online courses or digital products such as e-books and information guides. While investors can earn promising residual income with the method, it also requires a significant commitment to the initial investment of time and effort. Moreover, this method might not apply to all investors from different walks of life as it demands specific skillsets and know-how.
  3. Sharing or selling assets: This method relies on the ability of the investors to turn whatever they own into income-producing capital. Typical cases include renting out properties or selling investments. This method also requires an initial investment in physical objects and investors’ extra time and skills. Though the level of investment needed might not be too complicated, the rewards are hard to convert into a sustainable stream of income.
  4. “Reverse” passive income: This method does not necessarily involve ways to earn more but instead focuses on reducing spending. By cutting existing monthly expenses, passive income can be acquired to be invested or spent on personal necessities. This method could add to investors’ existing income by a few simple financial changes or refinancing decisions, yet the rewards might not be too promising.
Without a reliable management firm, it is more difficult to capitalize on the investment opportunities in cash-flowing assets such as construction equipment rentals.

Why Foundation Capital is a reliable option for sustainable passive income

As indicated, investing in cash-flowing assets promises higher yields than other methods. Nevertheless, it is also more complicated to get into, especially in competitive industries such as construction and equipment rentals. Management firms such as Foundation Capital can help investors choose viable investment options, monitor investments, and assure income is generated more gratifyingly. Here are four reasons why Foundation Capital is a reliable option for more significant earnings from passive income:

  1. Foundation Capital provides a gateway to the highly lucrative construction industry. The global construction industry is currently more coveted for its explosive growth potential. Thus, investing in construction equipment is and is continuing to be a reliable option, in both terms of security and returns, for passive income. With a proven track record working across many megastructure projects, Foundation Capital possesses the contacts, the know-how, and the reach to enable investors with significant monthly earnings from passive income streams.
  2. Foundation Capital makes investing simple for investors. Foundation Capital organizes a straightforward investing premise in which investors invest in the machinery and technology that is the foundation of all megastructure builds. The firm then leases the equipment to those businesses managing the projects, earning investors a monthly passive income. At the end of the contract (five years or longer), investors can get the money back by selling the asset at the original price.
  3. Foundation Capital offers rewarding monthly income. All lease and buyback investments with Foundation Capital deliver monthly payments with returns of up to 26% per annum. There are also options for investors to consider, such as choices between a fixed 14% return or a floating rate return which historically has delivered higher income. In addition, Foundation Capital maintains strict business relationships with the companies that lease the equipment. We make sure their creditworthiness can be verified through a rigorous audit process.
  4. Foundation Capital secures your investments. Foundation Capital protects your investment with strict policies to have assets insured at all times. Moreover, investors are also ensured of simple exit strategies with no hidden terms and conditions or fees.

How to Get Started with Foundation Capital

If you want to generate a sustainable passive income stream, Foundation Capital is one of the most reliable organizations to invest in.  Our process has been refined, perfected, and proven over the past 12 years of renting our clients’ assets to the construction industry.

For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

(Social Media) Foundation Capital LinkedIn

(Social Media) Foundation Capital Twitter

Curbing The Worst of Inflation with Passive Income from Construction Investments

With inflation rates rising and interest rates on the decline, regular income is decreasing in its actual worth. While there is nothing to do about inflation itself, investors can give earning potential a boost with inflation-busting passive income. Foundation Capital offers investment opportunities in the soaring construction industry that can help investors earn money with little maintenance and great security and excellent returns.

Rising Inflation Leaves Investors with Less Real Income

Inflation is making headlines around the world as it has risen from 6% to 9% in more than half of the economies. Rising prices in core areas of budgets and the consequent devaluation of the currency has left investors with a significant granted financial hit in the last two years.

For instance, income is losing real-world purchasing power even as wages are reported to be rising at the fastest rate in years. As the Consumer Price Index continues to soar in both the advanced and developing world, if your regular income has not adequately also increased, you are losing money.

Traditional savings also fail to protect investors as banks have been pressured to boost spending in a post-COVID world. In fact, the European Central Bank has even set a negative interest rate, meaning that account holders across Europe are paying their banks to hold their money.

There are levers investors can pull, in terms of their jobs, investment, and spending, in order to diminish the negative financial impact of inflation. Nevertheless, most of these require major changes and cutbacks that are either risky or excessive. Switching jobs, extreme tracking of expenses, and high-risk investments with little guarantee… might not work for everyone in a world where certainty remains far-fetched.

How Passive Income Can Fill the Gap

There is a reason why the concept of passive income has gained significant traction of late. As a low-effort solution to investing, it generates an effective stream of income with little or no maintenance. Thus, passive income can assist you in keeping inflation and its impacts at bay.

Passive Income can help curbing Inflation
Passive income can help curbing inflation.

Passive income refers to the money you earn that does not require active effort in terms of money, time, and resources. For example, stocks that pay out dividends, a spare room for rent, a space on your website for selling advertisements, royalties from books… The initial level of effort required varies with each scenario, but the results are the same: a stream of the steady income that builds security over time.

While earlier, the options were limited, there are now various investments to choose from that deliver respectable income streams. Nevertheless, the increasing number of options also comes with challenges in choosing the right stream of investments. Modern options, such as shares, Initial Public Offering (IPO), cryptocurrency, or microcap shares might seem attractive, although they are risky but because they are speculative and might generate better returns, yet the risk is too high and requires more research and monitoring than one might expect for a passive income. Meanwhile, investing in tangible assets offers much more secure and stable returns. In short, Shares, IPOs, and cryptocurrencies are all speculations that deliver no stable income whereas tangible assets are income-producing investments.

Construction Investments as Reliable Passive Income

The global construction industry is currently more coveted for its explosive growth potential. It is expected to reach an estimated USD 10.3 trillion by 2023, and it is forecast to grow at a Compound annual growth rate (CAGR) of 4.2%. The demand for construction equipment is also continuing to increase, and is anticipated to reach USD 228 billion by 2026. Thus, investing in construction equipment is and is continuing to be a reliable option, in both terms of security and returns, for passive income. In fact, it is expected to offer an exponential growth of 23% by 2023.

As promising as the industry becomes, finding a viable investment opportunity might not be that simple. While access to megastructure construction projects ensures secure and stable income as they are backed by Government funding. taking part in small projects promises less desirable returns.

Foundation Capital | Rental crane vehicles
Foundation Capital enables a passive income stream for investors by offering access to the construction industry.

Foundation Capital is one of the more unique organizations that enable investors to take part in this highly lucrative opportunity. Established in 2007, Foundation Capital specializes in giving investors access to the construction industry by means of investing in and owning the machinery and technology needed for megastructure builds. As the organization leases equipment to businesses managing the projects, investors earn monthly income with returns of up to 26% per annum. Not only are the assets secured and insured, but investors are also ensured of simple exit strategies with no hidden terms and conditions or fees. For instance, at the end of five-year contracts, investors get their money back by selling assets at the initial purchase price.

How to Get Started with Foundation Capital

If you want to put your money to work, Foundation Capital is one of the most viable and secure ways to do so. For more detailed information on how to make a capital investment in construction with Foundation Capital, as well as the terms, conditions, and risks, refer to the following FAQs and guides:

(Support) What Is Foundation Capital and How We Invest?

(Support) Foundation Capital-Partnered Construction Companies

(Support) Construction Investments Vs. Others

(Support) Foundation Capital FAQ Library

(Support) Schedule Your Free Consultation

(Social Media) Foundation Capital Facebook

Global Greed

The global construction equipment rental market is booming as never before, thanks to a vast array of infrastructure mega projects taking shape in countless arenas across the planet.

These huge and complex multi-billion-dollar endeavours are creating jobs, boosting connectivity, driving economic growth and delivering unrivalled returns for lovers of money everywhere. Moreover, each of the power generating facilities, land reclamation programmes, high speed rail links, mass transit systems, expressways, ports, bridges and tunnels that make up these awesome undertakings, require massive amounts of construction equipment to bring them into being.

What this means is that whether they’re invested in India, the Middle East or anywhere else in the world, the owners of that machinery are enjoying the most phenomenal returns by renting it out to contractors on the ground responsible for delivering the projects in question.

India

In India, where some 18 per cent of the world’s population reside, flagship projects include a much-needed second international airport for Mumbai, the country’s most populous city. Considered an essential addition to the city’s infrastructure portfolio, this new super hub will serve to ease congestion to the tune of 90 million passengers annually when it opens in 2023.

Meanwhile, in Hyderabad, a comprehensive new metro rail system is currently under construction. This includes a 31km express link to the city’s airport, with elevated or underground sections making up the majority of its length, meaning an army of specialised equipment is needed.

In fact, across India, the machines are out in force, toiling day and night on projects ranging from power, road, rail and telecoms, to shipping; all part of a strategic decision to prioritise connectivity and enhance business and trading opportunities across the country.

Foundation Capital | Metro commuter train in Doha, Qatar

Middle East

In the Middle East, the world’s richest country, Qatar, is busy crafting a 300km metro at a cost of $36 billion, while an expressway programme spread across 78 major projects will deliver 800km of new road and 200 interchanges; all part of the “Qatar National Vision 2030”.

Elsewhere in the region, Dubai’s Al Maktoum International Airport is being built at a staggering cost of $82 billion dollars, and comes complete with unprecedented demand for material handlers, earth movers and other construction equipment. What’s more, this demand will persist until 2030 at the very least, when the colossal new facility’s first phase is due for completion.

Meanwhile, Dubai International City, a mixed-use development of residences, businesses and tourist attractions, has a $95 billion price tag, while a further $65 billion is being thrown at “Dubailand” to make it the world’s largest retail and entertainment site when it opens in 2025.

Abu Dhabi is also a hotbed of activity, exemplified by the ongoing construction of super-sustainable $22 billion Masdar City, while the $36 billion homage to pleasure that is Yas Island, is sure to keep the machines gainfully employed for many years to come.

Foundation Capital | Skyscraper buildings in the Dubai financial district

Fabulous Fortunes

It is the same story anywhere in the world one cares to look, with big, bold, beautiful building projects dominating skylines from Rio to Riyadh and from Jakarta to Johannesburg.

And, with so many new mega projects coming on stream, the demand for construction equipment has gone through the roof, delivering for the owners of that machinery unrivalled rental income.

Across the globe, throughout history, the smartest investors have understood that fabulous fortunes can be made simply by renting things out. And, today is no different, with construction equipment rental the most lucrative modern-day example of this tradition.

It stands to reason, of course, when one considers that global construction output is set to grow by 85 per cent to reach an awesome $15.5 trillion by the end of the decade! And, with increased automation, growing populations and urbanization combining to drive this rapid growth, the global construction equipment rental market is forecast to reach an almighty $230 billion by 2025!

With figures like that, even those with the biggest appetites for making money are getting in on the act and feasting on the fruits of this bonanza business.

Japan: Land of the Rising Returns

Japan is the country that pioneered high-speed rail travel more than 50 years ago with its legendary bullet train.

Known the world over for its sleek, aerodynamic shape, this iconic mode of transport has come to represent all that’s best about Japanese engineering, while it posts passenger numbers in the billions across the country’s network annually. In fact, so popular has it become, the flagship line linking Tokyo with Osaka is now the busiest high-speed rail service in the world, carrying almost half a million people each working day along the 425 km route in 145 minutes.

Japan says “Konnichiwa” to Maglev

Yet, 145 will soon become a mere 67 minutes, for a new £90 billion Maglev line is currently under construction and will be completed by 2037.

The significantly reduced travel time will help to create a single mega city by binding together Japan’s three principal urban centres of Tokyo, Nagoya and Osaka, with economic benefits projected to be as much as $155 billion during the line’s first 50 years of operation.

Impressive stuff indeed, yet this is just one of numerous infrastructure mega projects funded by the State, as part of Japanese Premier, Shinzo Abe’s massive government spending programme to stimulate the country’s economy, popularly known as “Abenomics”.

Cutting-Edge Locomotion

Maglev means “Magnetic Levitation” and constitutes an energy-efficient, reliable and durable high-speed rail system using magnets to control trains’ stability and speed. And, with friction between wheels and rail eliminated, ultra-high speeds of over 600km/h are achievable, meaning trains will deliver passengers to their destinations quicker than a plane, and with considerably less fuss!

Yet, while Maglev trains are cheaper to build and maintain than conventional trains, since they have no moving parts, the infrastructure itself is hugely expensive and requires a host of specialist machinery.

Endless Work for the Machines

17 more years of construction before the project is delivered may seem excessive, but there are compelling reasons for this timeline.

Firstly, much of the construction area sits within one of the most heavily built up areas in the world. This means 86 per cent of the line will be located deep underground, with tunnels needing to be bored 40m+ below the surface to ensure no conflict with existing land use. One such example is a 25km tunnel currently being constructed under the southern Japanese Alps, and set to be the deepest in the country upon completion in 2025.

Secondly, nature is a force to be reckoned with in Japan, so everything must be built to an extremely high standard to ensure all infrastructure across the line’s length is earthquake, typhoon, flood and even tsunami-proof!

Yet, while these factors may combine to prolong build times and push costs up, there are always winners; not least the owners of the material handling, earth moving and other specialised construction equipment, who rent them out to the Japanese contractors tasked with delivering this feat of engineering. Their machines will be working overtime to keep this mega project on track and on time.

Foundation Capital | High speed maglev train tunnel on the Yamanashi test line, Japan

Boom Time for Investors

So vibrant is the construction equipment rental market in Japan, the country takes bronze medal in the global revenue stakes, punching far above its weight in terms of its land mass and population, helped in no small measure by this glittering new Maglev project.

However, many other factors are helping to fuel the boom in this rental market, including infrastructure requirements for the forthcoming 2020 Tokyo Olympics, as well as ongoing recovery from various natural disasters that have afflicted the nation in recent years. Moreover, such reconstruction efforts are set to run for many decades yet, meaning this boom has long legs!

It all translates to ever rising returns for those investors smart enough to realise that when demand exceeds supply, as it does in the construction equipment rental business, he who holds the asset is perfectly placed to cash in!

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