Your SPI Roadmap:
Step 1 → What pays passive income
Step 2 → What you should buy first
Step 3 → How to structure monthly, quarterly & yearly income

When people talk about passive income investments, they usually mean one thing: cash hits my account without me selling anything. That happens through dividends (stocks and REITs) and distributions (ETFs and funds).

Quick truth: You only earn passive income when a payout actually happens (monthly, quarterly, semi-annual or annual). Price increases are growth — not income.

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1) The Terms You Must Know (No Guessing)

• Dividend: Cash a company or REIT pays shareholders.
• Distribution: Cash an ETF or fund pays investors.
• Yield (%): Annual income as a percentage of your investment.
• Ex-dividend date: You must own before this date to get paid.
• Pay date: When cash lands in your broker account.
• Accumulating vs Distributing ETF: Accumulating reinvests. Distributing pays you cash.

If you want deeper definitions, see: Dividend definition and Ex-dividend date definition.

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2) The Simple Income Math (Use This Every Time)

• Monthly: Investment × Yield ÷ 12
• Quarterly: Investment × Yield ÷ 4
• Yearly: Investment × Yield

These are planning estimates. Real payouts depend on fund distributions, taxes and fees.

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3) What Passive Income Investments Actually Pay (And How Often)

Monthly income options

• Bond ETFs (interest-based distributions)
• Income ETFs (covered-call or income-focused)
• Some REITs (property rental income)

Best for: steady monthly cashflow

Quarterly income options

• Dividend ETFs
• REIT ETFs
• Most South African ETFs

Best for: balance and stability

What about yearly payouts?

True annual dividends exist but are uncommon. Instead, many investors create yearly income by holding growth ETFs and withdrawing once per year.

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4) Platforms to Use (South Africa + International)

South Africa

• EasyEquities – fractional shares, global + local ETFs
• SatrixNOW – direct ETF investing

International

• Trading 212
• eToro
• Interactive Brokers

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5) The 3-Bucket Income Strategy (R20,000 / $1,000 Example)

A simple structure that works across markets is the three-bucket system:

• Monthly income bucket
• Quarterly income bucket
• Yearly growth bucket

A beginner-friendly split is: 40% monthly / 40% quarterly / 20% yearly. This works because income assets pay on different schedules, allowing you to combine consistency, stability, and long-term growth.

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6) Common Mistakes to Avoid

• Chasing high yields without understanding risk
• Confusing growth with income
• Expecting large payouts from small capital
• Ignoring taxes and platform fees

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7) What to Do Next

• Choose your preferred payout frequency
• Select a platform that supports ETFs
• Start with distributing funds
• Track ex-dividend and pay dates

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Next Step: What Should You Buy First?

Now that you understand what actually pays passive income and how payouts work, the next decision is choosing the right investment vehicle.

Stocks and ETFs are not the same, and picking the wrong one at the wrong time can slow your progress dramatically.

Step 2 explains exactly when to choose stocks, when ETFs make more sense, and how most beginners get this decision wrong.

Step 2: Stocks vs ETFs — What You Should Buy First (And Why)

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