There are many possible classifications of sources of passive income. One approach is to divide investments by risk level: they are divided into conservative, aggressive and moderate. Moreover, in most cases, the level of risk is inversely proportional to profitability. 

How to simplify your riskiest income sources

When deciding where to invest, you should be prepared for the fact that the volatility of the riskiest investments is also very high. Conversely, conservative investments reduce the risk of capital loss to a minimum, but at the same time, their guaranteed return is quite low.

However, one should always keep in mind that you could simplify your income sources by reducing risk factors and in this article, we will talk about these tips.

Forex market

No doubt this type of investment is called the first among the riskiest by most analysts. While Forex trading can bring you lots of revenues if you have a knack for it, at the same time, it could lead to losses. The game in the foreign exchange market is highly competitive, and high profits are received mainly by professionals. Meanwhile, Forex platforms quite often position themselves as a source of passive income, accessible even to a beginner. But this is far from the case – a new person will have to spend quite a lot of time to grow into a professional. 

There are several ways you can reduce risks on Forex. First of all, you should have a suitable strategy chosen for you, which will help you increase revenues. Moreover, if you are a novice FX deposit bonus for beginners can act as an assistant in the initial period of trading. Putting aside your emotions is also helpful for minimizing risks at the world’s largest financial market.

Casino industry

It goes without saying that the casino industry is one of the riskiest sources of income. You heard it right – a lot of people make money from gambling. This is a field which is entirely dependent on the luck. Playing slots, poker and other games can indeed inflate your pocket, but the fear of losing money is also present.

However, you can reduce risks if you diversify a choice of games. For instance, playing poker requires more knowledge, calculation and intuition than slots. Poker, for the most part, is a game of psychology. Also, you can choose the football matches to place bets. This one is more logical and can significantly increase your chances of winning.

Luxury goods and arts

This extensive category of investments includes a large number of options: from retro cars and yachts to collection elite alcohol, from paintings to musical instruments. Even though this option is often referred to as conservative investment instruments (including for the reason that they are not highly profitable in the short term), many experts include it in the list of most risky investments

Luxury purchases by no means always guarantee a future increase in their value. Even in the case of art objects, it is necessary to understand that any forecasts may turn out to be wrong, and the demand for a particular thing in the market may fall for reasons beyond your control.

When acquiring a collectable or simply expensive thing, you need to take care of insurance immediately – not only theft but also physical damage, which will instantly depreciate your investment, are possible. So the best thing you can do to avoid any complications is to take care of your objects as much possible. 


Investors who invest their money in developing someone else’s business (in most cases technology-related) are also called “business angels”. Getting such a title is a tempting prospect, but there are a lot of risks behind it – up to the complete loss of investments. Here are some of these risks:

  • Financing someone else’s business is primarily suitable for those who already have the personal experience of an entrepreneur and understand by their example what dangers any business faces when entering the market.
  • As mentioned above, investments are most often necessary for high-tech projects – a business plan for opening a beauty salon or a grocery store will not interest business angels and venture funds. And this means that you need to understand the field and understand where you can invest, and which projects do not meet the needs of the market.
  • Finally, do not forget about the human factor. No matter how promising the idea is, its success largely depends on the team that brings this idea to life. And this means that the safety of your investments and their increase is directly related to errors or the right decisions of people who, quite possibly, did not have entrepreneurial experience before that.

Of course, it is harder to diminish the risks in startups investment but choosing the startup that is the most interesting for you could be beneficial because when you are dealing with something, that you already had experience will bring desired results.


When it comes to earning money, no one is protected from risks and dangers. You cannot make a fortune if you do not put something on the plate in return, but following these steps can at least reduce them.