Money management is a popular topic, and one that offers many different choices for people to make in terms of what vehicles to utilize. Some of these can be quite passive, and others can be more along the lines of being very active.
With respect to the former, “passive” doesn’t necessarily mean the same thing as what is commonly described as passive income in some personal finance circles. That might mean royalties, or simply money earned with next to no effort and really even much further investment of money or time.
In this case, when it comes to passive, let’s consider it to mean one that is more conservative. In other words: low risk. This can absolutely have its merits, and can be especially valuable in old age. After all, later in life capital preservation just might be the name of the game for many people. Some examples of this might be savings accounts, super safe government bonds, or perhaps even this very simple, no-frills approach: holding money in cash.
Some people in the past have gone so far as to bury money in the back yard, though I think that brings about some real risk 🙂
The, there are more “active” approaches to allocating your money, which involve more risk but potentially some more return. One example, which just might be the one that comes to mind for a lot of folks, would be stocks. Yes, equities are traded around the world and at a staggering volume each trading day. Here in the U.S., just think about how much money is put into equities by 401(k) participants on a regular basis!
There some other choices people can make as well. Another example is investing in a small venture through crowdfunding. Yet another example could be online trading of options. One in particular is binary options. With these, the “binary” term reminds one of the 1’s and 0’s that come to mind when thinking of math or even coding. In this case, the idea is that there is either a nice return or the alternative of no return. Like many other things, where there is some risk there can potentially be some real rewards too.