Alternatives to Dividend investing

Hello everyone as I have written a couple of times in the past my main investment focus until the end of the year will not be on investing into dividend stocks, I will be more focused on investing in ETF’s as it is just a good opportunity for me to do a further diversification. Nevertheless when choosing an ETF the main focus should be of course on dividend stocks and on regular payouts. Besides investing in ETF’s I also plan to start with p2p lending as another investment possibility to create passive income. I know p2p lending is very risky, that’s why I will start with low portion.

Investing in ETF’s

Currently I have one ETF in my portfolio with a total share of around 8% of my total portfolio, with this ETF I cover a lot of interesting dividend stocks in Europe. The cool thing about this ETF is that I have the opportunity to invest indirectly in companies I would not invest in, because of tax reasons and high fees through my broker.

In the meantime I discovered another dividend ETF, which covers a market I am not invested in so far at all. It is the asian and especially the australian market. The ETF is called iShares Dow Jones Asia Pacific Select Dividend 30 UCITS, is also from BlackRock and includes companies like:

  • Westpac Banking
  • Australia and New Zealand Banking
  • Sky Network Television
  • Starhub Ltd.

All in all the ETF is mainly invested in australian companies (48%) followed by companies from Hongkong (27%), New Zealand (14%) and Singapore (9%). It currently trades at 30.58 EUR per unit and last year’s total payout was 1.55 EUR, which makes it a current yield of 5.1% and the fees are at 0.31%. To sum up this ETF is another great opportunity to a further diversification and to increase my passive cash flow either through dividends or ETF’s and as mentioned earlier this month it will be my next major investment. I plan to buy around 100 units before the next payout in September.

Nevertheless compared to dividend stocks it is harder to predict the total payout for the next year, especially as a lot of ETF’s from BlackRock had a special pay out in April. But I also have to say they are a good addition to everyones’ portfolios. In general for the rest of the year I plan to invest a total sum of 8 000 EUR, which will increase my passive income by around 260 EUR after tax.

P2P Lending

After hesitating a lot about starting to invest in the p2p business I finally opened an account at one of the best known platforms in Europe. I am only starting with a small amount of 250 EUR, as I am just curious how I feel with doing that kind of business as it is a very risky game and it is also quite the opposite of my conservative dividend strategy. But considering the relative small amount it is worth a try and well let’s see how it develops.

The promised returns from p2p lending are somehow between 7% to 15% but realistically I think around 6% is more than ok considering all the default rates. In total that would mean in the first year I would expect a total return of around 15 EUR. Not a lot but for a start it is ok :)…

Conclusion

Investing is becoming more and more a great opportunity to increase my passive cash flow and investing in dividend stocks is still my main focus to reach that goal. But I also need to find other investing opportunities to create some passive cash flow. Well investing in ETF’s is quite similar to investing in dividend stocks but starting with p2p lending will be new for me. I decide to start with p2p lending as I just think over the long haul it will replace the classical bank loan system and the p2p market will get bigger and bigger.

All in all seeing that the money is working for you is a great feeling and investing is always better than not investing :)…

What about you guys? Do you also invest in something different than dividend stocks?

Disclosure:

I do not recommend any decision to the reader or any user, please consult your own research. Thank you for your understanding.

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