Quora Answer: What are Your Favourite Forms of Passive Income?

The following is my answer to a Quora question: “What are your favourite forms of passive income?”

The best form of passive income is still a good stock portfolio.  Managed well, and with compounded growth, the return on investment over an extended horizon is very good.  The advantage of such an investment is that it is flexible, and you can adjust the weightage between equity and debt instruments according to the economic climate to mitigate against turbulence in the market.  Another advantage, in places such as Singapore, is that there is no tax on your returns because there is no capital gains tax.  A further advantage is that stock portfolios are liquid, meaning that you always have a secondary market to convert some of it to cash when needed.