Main myths about passive income: debunking misconceptions

In the financial world, there are several paths to true independence, but none are as elegant as passive income through stock investments. Just as a tree once planted bears fruit over the years, so too does stock investment benefit people without realizing it. This can be the key to a life without monthly expenses. An example of this are investors who started small but through patience and wise investments have built up capital and secured their future.

How passive income from stocks works

Stocks are a kind of financial mechanism that works like a clock and generates passive income. Important elements are dividends and increases in the value of securities. Dividends can be compared to the rent that a company pays to its shareholders for their trust. The independent advantage of the stock comes from stable growth, supported by financial performance and dividend yield.

Long-term appreciation of securities

Over the past decade, many companies have generated significant profits for their shareholders. Gazprom shares rose by more than 200% and Sberbank by 250%, which brings significant benefits to long-term investors. In 2022, Gazprom paid 52.53 rubles per share and Sberbank paid 25 rubles per share. These payments became a guaranteed automatic source of profit for investors. Patience is important: shares earn back most of your capital over time. Reinvestment can double or triple your return, especially if you take compound interest into account.

Why is investing in shares the best way to generate passive income?

Compared to real estate and bank deposits, shares have the advantage that returns can grow almost indefinitely. Real estate has maintenance costs and deposit income often does not even cover inflation. As the company grows, share prices rise and dividends flow into the account continuously.

Reliability of dividend companies

Investing in shares to generate passive income makes sense for large companies that have shown steady growth and stable dividends for years. For example, Rostelecom and MTS packages are not only more expensive, but also offer more stable payments, making them an excellent choice. Real numbers:

1. In 2022, Rostelecom paid 5.39 rubles per unit.
2. In 2022, MTS paid 33.85 rubles per unit.

The data shows stability and attractiveness for long-term investors.

The impact of dividends on profitability

A gold mine for anyone who wants to get involved without investing money. Shares of companies such as Lukoil and Novatek are real dividend champions. Even in the most difficult times, shareholders did not leave empty-handed, making these investments attractive and reliable. It is important to select companies that have strong financial performance and a positive history of dividend payments.

Dividend reinvestment as a growth strategy

Investors often pay attention to the stability of dividends and the possibility of increasing them. By reinvesting, you can ensure that each ruble you receive still serves its purpose and increases the size of your portfolio. The strategy consists of several steps:

1. Select reliable companies: identify companies with stable dividend payments, such as Lukoil or MTS.
2. Open a securities account: register with a reputable broker who provides access to the shares of these companies.
3. Buy shares: buy shares based on dividend yield and growth potential.
4. Receive and reinvest dividends: Dividends received in the account should be used to purchase new shares, thereby growing the portfolio based on compound interest.
5. Continuous analysis and adjustment: monitor the financial performance of companies and adjust the portfolio composition if necessary to achieve maximum profitability.

How to start investing in Russian stocks and earn passive income?

To start your journey to passive income through stock investing, you need to follow a series of consecutive steps. First, choose a broker who will give you access to the stock market. In Russia, the most popular are Tinkoff Investments, BCS World of Investments and Sberbank Investor. After you select a broker, a securities account is opened and the stock selection process begins.

Strategy for selecting the first actions

For beginners, it is advisable to start with shares of companies that already have an established position on the market. For example, Sberbank and Norilsk Nickel are suitable for initial investments. Avoid emotional decisions and do not try to “play the stock market”: professionals prefer long-term strategies and stable capital growth.

Features of the Russian stock market

The Russian stock exchange platform is characterized by unique features. An important feature is the high dividend yield of many companies, such as MTS and Surgutneftegaz. The domestic market is highly dependent on raw materials. This should be taken into account when selecting assets.

Taxes and tax deductions

Taxes also deserve attention: in Russia, the standard tax rate is 13%, which makes investing more profitable than in countries with higher taxes. In addition, there are tax deductions that allow you to get back part of your money if you use individual investment accounts (IIAs), which makes investing in securities in Russia even more attractive.

Diploma

Passive income from stock investments is a real and proven way to achieve financial independence. Securities provide the opportunity to generate stable income that only increases over time due to business growth and reinvestment of payments. Anyone who thinks about their future financial freedom should try this tool. The main thing is to start small, be patient and approach the task strategically. Financial independence through action is possible for anyone who is willing to learn and develop.

Myths about investments are not just mass delusions. These are hidden traps that deprive private investors of millions every year. Misconceptions distort the perception of risk, skew strategies, and push towards unprofitable decisions. They are especially dangerous for those who are just starting their journey in the investment sphere. Under the influence of myths, newcomers bet on unstable assets, overestimate profitability, ignore analysis, and fail to build protective mechanisms. Investing requires clear thinking, which means getting rid of illusions.

Myth 1: “investments mean quick money without effort”

The mistaken expectation of easy money is the foundation of all subsequent losses. The idea that investments work as automatic income without involvement was formed during the hype of cryptocurrencies and aggressive advertising by pseudo-brokers. Reality: investments do not bring instant profit. On average, according to Russian market data, the return on a balanced portfolio (bonds, stocks, ETFs) is 9–12% per year. The level of risk directly depends on the asset structure. Example: a portfolio consisting of 60% OFZs and 40% ETFs on the Moscow Exchange index showed a return of 10.4% in 2023, but with a decline to -5% in March and November.

Simple calculation: investing in OFZ-PK series 29020 for 500,000 ₽ will bring in about 42,000 ₽ per year — provided it is held until maturity without early sale. These are not easy millions per month. An investor acts with a cold calculation, not expecting magical profits.

Myth 2: “investing is complicated”

The myth about investments is actively supported by those who have not understood it themselves. In reality, most basic actions are automated and available at an intuitive level. Modern brokerage platforms simplify the selection of instruments, provide collections of strategies, visualize portfolios, and offer recommendations based on risk profile.

For a novice investor, it is enough to install an app — for example, “Tinkoff Investments,” “SberInvestor,” or “VTB My Investments.” All actions — from opening an account to buying the first securities — take no more than 15 minutes. The entry level is comparable to online banking.

The beginner section on these platforms offers step-by-step assistance: which assets to choose, when to take profits, how to reinvest coupons. The simplicity of the interface does not negate the importance of analysis but eliminates the need for in-depth understanding of complex charts from day one.

Myth 3: “a large capital is needed”

One of the most enduring myths about investments is the need for a million rubles to start. In practice, the entry threshold is symbolic. Through the same “Tinkoff Investments,” you can start with 100 ₽. There are ETFs, fractional shares, access to OFZs and bonds of private companies starting from 1,000 ₽. Even with a small capital, it is possible to build a balanced portfolio.

Example: investing in the VTBE fund on the Moscow Exchange index (unit price ~1,400 ₽), plus bond 26240 for 1,000 ₽, Sberbank stock for 310 ₽ — a complete starting portfolio for 2,710 ₽. This approach allows testing a strategy and gradually building capital. Thanks to the low entry threshold, even a school student can open a brokerage account under parental control and start investing.

Myth 4: “investing requires a lot of time”

The mistaken image of an investor as someone who spends hours analyzing charts has nothing to do with the reality of a retail investor. With a passive strategy, dedicating 20–30 minutes a week to the process is sufficient. Auto-investment functions, recurring portfolios, price change notifications, and stop-losses allow automating a large part of the tasks. In the “Finam” app, an investor sets up periodic purchases: every month, the system acquires the necessary ETFs and bonds according to the specified structure.

Even trading using ready signals, for example, through QUIK or SmartX, with proper discipline takes no more than an hour a day. Time spent corresponds to the format: passive income — minimum time, active — slightly more, but without delving into terminals and codes.

Myth 5: “only real estate is reliable”

A popular myth about investments in Russia is the belief in the exceptional reliability of real estate. In reality, the rental market is subject to volatility, tax innovations, and vacancies. Profitability rarely exceeds 5% per annum after all deductions and expenses. Example: an apartment in Kazan for 7.5 million ₽ is rented out for 35,000 ₽. Gross yield is 5.6%, but after property tax, personal income tax, utilities, and maintenance, it remains around 3.9%. Moreover, liquidity is lower: selling the property at market price does not happen immediately.

Alternative: buying bonds for the same amount. A portfolio of OFZs and corporate bonds with a yield of 11% will bring in 825,000 ₽ over 12 months. If desired, quick realization on the exchange without wasting time is possible. Real estate is an asset, not a benchmark of stability.

Myth 6: “guaranteed profit exists”

Claims of “risk-free income” are the main sign of financial fraud. In legal markets, profitability is always linked to probability and degree of risk. Even government OFZs do not guarantee full capital protection when sold before maturity.

Developed strategies evaluate not only potential profit but also the depth of drawdowns. Example: when investing in Rosneft bonds with an 11% coupon, price changes are possible due to the Central Bank rate. With the threshold rising to 18% (as in 2022), asset prices drop by 4–6%, nullifying coupon income upon early sale.

How to minimize risks in investing? Asset allocation by class (stocks, bonds, ETFs), regular rebalancing, stop-losses, limiting the share of aggressive types to 20%. The myth of guarantees in investments hinders strategic thinking and leads to losses.

Myth 7: “you need to know everything to start”

One of the most demotivating statements. Paradoxically, the longer the start is postponed, the higher the chance of missing the best entry points. Investments for beginners are based on the principle of gradual immersion. The first steps involve setting up an individual investment account, choosing basic assets, and tracking results.

A novice invests in ETFs on the S&P 500 index, Russian OFZs, stocks of top-tier companies. The platform “Alfa Investments” offers ready-made portfolios for low risk, starting from 5,000 ₽. This is enough to understand how mechanics work, assess volatility, and start disciplined management. The main thing is not to delay. Complexity disappears with practice. The earlier the start, the more chances for capitalization and dividend flow growth.

Myth 8: “risks always lead to losses”

Risk is not an enemy but a tool. Risk management is the basis of strategic investing. Diversification tools, position limits, hedging, and insurance allow controlling drawdowns.

Professional investors use Value at Risk (VaR), Sharpe ratios, Standard Deviation of returns to assess risk. Even simple methods, such as buying dividend-paying stocks (Surgutneftegaz — 12.3% dividend in 2024), reduce income volatility. An investor controls risk by building a portfolio considering goals, investment horizon, and acceptable drawdown level. Investment myths demonize risk instead of using it as a tool to increase profitability.

Conclusion

Investment myths hinder the development of real strategies, replace knowledge with emotions, and push towards losses. Starting is simple: you need minimal capital, access to a brokerage account, and a sound approach. Stocks, bonds, ETFs, coupons, portfolio, profit — tools managed by a disciplined person, not fantasies.