Passive Investments Versus Active Investments

Passive Investments Versus Active Investments

Today we will discuss that what it means by Passive Investments & Active Investments. Understanding of both of these terms is very important if you want to be a sophisticated investor and want to maximize the profit of your money.

Passive Investment = Investment of Money only  + No Time

Active Investment = Investment of (Money + Time) Both

Passive Investors invest their money only and sleep. They don’t invest their time. Such as Mutual Funds. When you invest your money in Mutual Funds, it is known as Passive Investment because here once you divert your money over the fund manager than you don’t think about managing your investments. There is nothing wrong in this method. It is better than not investing at all.

Active Investors invest both their money and time. They do this because they want to achieve the maximum return of their investments. If you want to achieve maximum returns from your investments than you must have to invest your money and time both.

Say for Example, Warren Buffet. Warren Buffet is an active investor means he invests both his time and money. Apart from investing his money he spends 60 hours a week for analyzing various Investment opportunities. And that’s why he achieves maximum return from his investments.

So if you want to achieve the maximized return on your investments than you have to be Active Investor. You have to invest money and time both. There are lots of advantages of being an active investor. So Next time instead of watching TV, invest your time in being an Active Investor.