Post: #51

(04-09-2017 03:01 PM)Easy_C Wrote:  

(04-05-2017 10:28 AM)NewDayNewFace Wrote:  Blue chip stocks are basically the S&P500. The top 500 companies. Apples stock is at a all time high. I don't think I want to do any investing in that as of now. When it trends down a little bit then that will be the best time to get in as it'll bounce back.

Armstrong is saying wait until after May to invest in indexes.

Armstrong?

Post: #52

Neil Armstrong. First man to walk on the moon. We landed on the moon!

The competition is stiff. Recently Schwab lowered equity trades to $5. I also noticed Schwab has lowered their fees on a lot of index and ETFs. they are now cheaper than vanguard. Though I read Vanguard/Fidelity/ishares funds are often slightly better performing. if you look at the different leading funds for each industry sector the top 3 are usually the latter. However that may change now that schwab has reduced their management fees.

schwab also offers one single managment fee instead of tiered pricing. like .03 across the board whether you have $1 or $50k in the fund. with fidelty and vanguard they often start you out at like .05% or even .07 until you have a bigger chunk invested.

so for what it's worth i think you're looking for passive investment you can't go wrong with using your schwab brokerage account for no fee/no load etf and index funds. Someone said invest $25k and be rolling in the green. wish it worked like that. you'll likely be earning 4-10% per year (more or less). Even on a $100k investment you're only looking at an extra $400-1000/month, minus capital gains taxes (though I recommend you reinvest all the profits).

If you want to earn more money you have to take on more risk. This means you can't be passive. You'll want to pay close attention to your investments and market trends. Which means you'll be wasting all your time fretting over things you can't control. So maybe you earn a bit extra, but can't enjoy spending it.

There's no easy way out. Passive investing is a retirement strategy/fixed income lifestyle. If you really want the big bucks you have to put in sweat equity. In which case you're better off growing a business of some kind. Sticking with what you know and love.

Post: #53

(04-09-2017 04:24 PM)churros Wrote:  

(04-09-2017 03:01 PM)Easy_C Wrote:  

(04-05-2017 10:28 AM)NewDayNewFace Wrote:  Blue chip stocks are basically the S&P500. The top 500 companies. Apples stock is at a all time high. I don't think I want to do any investing in that as of now. When it trends down a little bit then that will be the best time to get in as it'll bounce back.

Armstrong is saying wait until after May to invest in indexes.

Armstrong?

Martin Armstrong. An economic forecaster who specializes in historical cycles.

https://www.armstrongeconomics.com/


Banker bastards tried to take him down.

https://en.wikipedia.org/wiki/Martin_A._Armstrong

Post: #54

Best Long term passive income in my experience has been real estate. You can argue that it is not truly "passive" because you have to continually select/screen tenants, manage the property,deal with repairs and maintenance etc, but long term the returns are worth it and it is considered passive income on tax return.

1. You get to use leverage which is key to juice returns. No where else in the financial marketplace can individuals get access to signficant amounts of cheap debt financing outside of real estate. Try pitching a business idea to a bank or even getting a loan to buy an existing company 99/100 times they will laugh at you (not before trying to sell you a "business account" to meet their monthly quotas).

2. Inflation--becomes your friend as a real estate investor. The value of property (over long periods) goes up while your mortgage payment never changes (taxes, HOA fees, insurance will go up). However you can easily offset this with raising the rental price for your property.

3. Time is your friend---as the years go buy the price of the property goes up, rental prices go up, your mortgage payment remains the same, and you will be sitting on capital gains. You will then be able to access the built up equity with credit lines from the bank.

Risks/hurdles to this investment

1. Need large amount of capital for initial down payment plus two years of verified tax returns and good credit.
2. Need large cushion of extra contingent capital to cover the mortgage payment when rental unit goes unoccupied, major repairs and maintenance pop out of nowhere or when your perfect tenant defaults (in Cali where I am they can stretch out the eviction process for over 6 months). During this time you are 100% on the hook for the mortgage payment which can ruin your entire life if you don't have extra capital.
3. Many more risks need to be considered than I can list here---

Post: #55

One way to make true passive income off of real estate is to do seller financing. This requires up front work and knowledge of real estate picking the right property in the right area. It also requires you to have lots of cash. I have done this with several properties and made 8% interest on each one. The key is to having a property that they can't destroy more than the down payment would cover if you repo the property. Although if the down payment is too high you wont sell it. This appeals to people who can't get a loan through a traditional bank for whatever reason. I've found that commercial properties are the best because not only are they harder to get loans on but the loans carry higher interest so it makes more sense for them to do seller financing. This varies from area to area of course but in my area commercial loan interest rates are about double of what residential are. The other advantage of doing seller financing is you can usually charge more than you could selling the property otherwise because you open up to more potential buyers who might only be able to buy a place willing to do seller financing. You get a better price buying the property because when paying cash for a property you can usually get a better deal.

Post: #56

(09-30-2017 02:04 AM)The Right Frame Wrote:  3. Time is your friend---as the years go buy the price of the property goes up, rental prices go up, your mortgage payment remains the same, and you will be sitting on capital gains. You will then be able to access the built up equity with credit lines from the bank.

Kinda agree with everything in your post except this. Properties generally [not always] increase in value or price. It all depends on the demand and supply of your market. It generally goes up, but a property could be worth less than when bought.

Post: #57

(11-13-2017 11:50 PM)Pete Wrote:  

(09-30-2017 02:04 AM)The Right Frame Wrote:  3. Time is your friend---as the years go buy the price of the property goes up, rental prices go up, your mortgage payment remains the same, and you will be sitting on capital gains. You will then be able to access the built up equity with credit lines from the bank.

Kinda agree with everything in your post except this. Properties generally [not always] increase in value or price. It all depends on the demand and supply of your market. It generally goes up, but a property could be worth less than when bought.

As with any other investment, you must diversify. People think that they are clever when they are fully invested and keep no cash in reserve or, worse yet, max out their available leverage. If they are ultimately successful, it is just dumb luck market timing. People who fail to plan (for a worst case contingency), plan to fail. As an example, I read this just today:

Quote:The guy approached me during the cocktail party to tell me that, some years before, he had built up a portfolio of rental properties in Boston. I forget how many but at least a dozen.

In his case, he had mortgages on all of the properties, but he was cash flowing nicely, making his mortgage payments easily while some property rents went up and others went down.

Then something happened in the Boston market. I forget the details, but the result was that Boston rents collapsed.

The guy was stuck with apartments he could only rent for far below the income required to service the mortgages... and he wasn't able to sell quick enough. He ended up losing everything... his entire property portfolio... to the bank.

You could say the problem was the market event in Boston... but that was not the problem. The problem was that the guy lacked diversification. All of his properties were in one place.

Post: #58

I saw this article today and remembered this thread: "43 Best Passive Income Streams & Opportunities". It may provide some ideas for those with an interest in the topic. I am not affiliated in any way.

https://realpassiveincomeideas.com/43-be...rtunities/

Post: #59

Sorry if this has been discussed, has anyone considered buying actual ATM's and placing them in various high traffic areas (assuming you can make acceptable arrangements with whomever)?

Post: #60

I’ve looked into ATM machines for bitcoin before and worked out some math.

At the end of the day its still comes down to a business operation, purchasing requires economy of scale, operations requires security & manpower. For conventional ATMs I think it will be hardpress to squeeze out margin in Asia unless you have contacts within the major banks.

Having said that, I’ve seen companies promising 18% annual returns by investing in these companies. Not sure which countries they place their ATM though since I’m not too interested in this as a business. If they tell you its guaranteed then 100% they are trying to cash out of their own business.

Post: #61

(04-04-2017 02:49 PM)Travesty Wrote:  Had a couple hundred bucks in Lending Club for 6 months. Still earning 20% return. No defaults yet. D to F grade loans. The default curve says on 3-year notes it will balance out to 6% by the end of 3 years due to defaults. Gone pretty damn strong so far though.

My experience has been the exact opposite. Lending Club for me has been a fucking joke. I've tried manually selecting loans, I've tried using their mixed portfolio, I've tried weighting things in different ways. I don't think my percentage has ever been above 6% and even then the way they display my earnings they aren't taking into account chargeoffs which have become numerous.

Post: #62

(04-05-2017 07:29 AM)Travel Museums Wrote:  Oh yeah I forgot about annuities. Met Life and others have free calculators. I think $100,000 with an immediate payout would net you $400/month for life.

Lots of people scoff at this because the market does way better. Yeah, but it also does way worse for streaks. Annuities aren't just for dumb old lady widowers.

Again how much is your time worth? How about a worry free lifestyle? If Trump didn't win I was seriously considering putting half my portfolio in an annuities and living a simple life off the monthly payouts.

Totally passive and steady payout for life. Some allow a very favorable lump cash payout to your beneficiary if you die. Again this is a type of passive income insurance not for you but that would take care of your woman or kid (assuming they don't blow it all).

One last thing on passive investment and income. You still need to dollar cost average. You can set up automatic recurring purchases (recommend) to take place daily, weekly, monthly. Just watch the transaction fees!

So understand you are always continually investing, though this should be mostly an automatic deduction from your checking/savings/brokerage accounts into your portfolio. This idea that you would just plunk down hundreds of thousands at once and sail away is bullshit. Even your dividends should be reinvested unless you need the money to live.

Can someone explain what an annuity is as well as the pro's and con's? Whenever I hear Dave Ramsey and the like talk about annuities they always say its a ripoff, however that sounds somewhat attractive

Post: #63

In theory annuitization is a powerful concept, and helpful when thinking about streams of money in terms of a Value and also about a large sum of money in terms of a Cashflow (stream), according to an appropriate discount rate.

The issue is that, as an actual product, there are lots of rigid terms and conditions, baked-in fees, spreads, and other factors that make it NOT ideal. You also can't get out of it. "I'd DIE before I sell an annuity. It's meant to benefit the seller, and it's impossible to get out of." -- Ken Fisher on a TV commercial pushing some annuity-by-another-name...

One gives up efficiency/spread and in exchange receives "certainty". One could also just manage a safer allocation in their own portfolio without the guarantee or middle-men.

Some people who have a lot of money may annuitize some of it (regardless of extra costs) because at their level, having a certain limited flow is yet another diversified asset (in addition to their other fixed-income or equity / other investments / etc.).


When you do X every week, think about it's value annuitized and what that could grow to over time... nice mental hack.

If someone offers you to debase yourself for $Y, annuitize it and realize what a pittance it is (i.e. "months of no rent, but then what?")... hah, just trying to get it into a more intuitive form.

(It's like a more stretched version of the mental hack of imagining every dollar you waste growing at 6% over decades... instead of thinking of each $5 coffee's growth over decades, think about the annuitized value of 10 years of daily coffees, and grow THAT amount at 6% over decades....).

/rant

Post: #64

Annuities reliably pay out a fixed amount monthly. REGARDLESS of market fluctuations. A lot of dead husbands bought them for their wives who never managed finances. It’s a reliable fixed income for life. Usually with a lump sum to the beneficiary upon death. Not a bad deal. Lots of parents buy them for their idiot children too.

To have enough money to live off monthly you need to purchase several hundred thousand dollars of annuity. But even a 150k annuity will kick out a nice monthly bonus for life. You’d do better in the market but you can’t live in a 401k. An annuity can reliablely pay your bills, rent, misc expenses month after month.

Post: #65

I used the RVF criteria but picked lots of DEFG and they went in the shitter so now I only buy ABC, after that lending club has been better. What's a joke is their stock, I got double-fucked there.

Post: #66

Real Estate: Rental Properties & Notes

Equities: Dividend Producing Stocks, REIT's, & Mutual Funds

Businesses: Silent Partnerships, Loans

Capital needed varies per investment, how they are purchased, and your credit. Except in the case of dividend income which ranges from 1% in AMH a residential REIT, up to 19% in MORL a 2x leveraged mortgage REIT. These are just examples of ones I own, but not recommendations.I can advise a good and reliable investor in PM.
Regards Debo

Post: #67

Don't forget preferred stock. They're a rare product, but...

Keep in mind that the problem with trying to get "passive income" right now is that the artificially depressed interest rate environment means a lot of professional, massive dollar-value investors (e.g. state retirement funds, other pension funds, insurance companies, etc.) are desperate for any kind of yield they an get in order to remain solvent. This demand tends to push yields for "passive investments" down across the board and negatively impacts the risk/reward ratio for that type of investment.


My advice would look at dividend instruments people don't think much about. Preferred stock are rare but somewhat underrated and are designed as a dividend paying instrument. You can also find some extremely high dividend paying stocks (as high as 10% annually) in industries like coal that the NPCs reflexively hate. Not all of that hate is logically based but it suppresses prices, which means you as the buyer get a higher yield (annual return) on dividends.

Post: #68

(12-20-2018 05:51 PM)Easy_C Wrote:  Keep in mind that the problem with trying to get "passive income" right now is that the artificially depressed interest rate environment means a lot of professional, massive dollar-value investors (e.g. state retirement funds, other pension funds, insurance companies, etc.) are desperate for any kind of yield they an get in order to remain solvent. This demand tends to push yields for "passive investments" down across the board and negatively impacts the risk/reward ratio for that type of investment.

Not enough people talk about this fact. I have discussed it many times in the past.

/thread-32301...#pid635794

/thread-35601...#pid718397

/thread-33145...pid1652576

Post: #69

(04-06-2016 09:59 PM)Seth_Rose Wrote:  A must-read on this subject comes from Financial Samurai:

Quote:Ranking The Best Passive Income Investments

...

Below are seven main passive income investments to consider. Each passive income stream will be ranked based on Risk, Return, Feasibility, Liquidity, and Activity. Each criteria will get a score of between 1-10. The higher the score, the better.

A Risk Score of 10 means no risk. A Return Score of 1 means the returns are horrible compared to the risk-free rate. A Feasibility score of 10 means everybody can do it. A Liquidity Score of 1 means it’s very difficult to withdraw your money without a massive penalty. An Activity Score of 10 means you can kick back and do nothing to earn income. To make the ranking as realistic as possible, every score is relative to each other. Furthermore, the return criteria is based off trying to generate $10,000 a year in passive income.



http://www.financialsamurai.com/ranking-...vestments/

What's the word on this Financial Samurai site? Good resource?

Post: #70

(09-30-2017 02:04 AM)The Right Frame Wrote:  1. You get to use leverage which is key to juice returns. No where else in the financial marketplace can individuals get access to signficant amounts of cheap debt financing outside of real estate. Try pitching a business idea to a bank or even getting a loan to buy an existing company 99/100 times they will laugh at you (not before trying to sell you a "business account" to meet their monthly quotas).

This is the one thing that could make me get a salaried job again one day.

Do you do this full time The Right Frame? If yes, how do you keep the banks happy if you don't have a salary (instead you have income from your business)?

Post: #71

Robinhood (https://www.robinhood.com) is giving 3% on cash accounts. That's enticing.

Post: #72

(12-24-2018 10:56 AM)joost Wrote:  Robinhood (https://www.robinhood.com) is giving 3% on cash accounts. That's enticing.

Is it though? I don't have 10 million so 3% would take me forever to make it worthwhile.

Post: #73

^^

Where can you find that yield with such liquidity? Treasuries are paying less than that.

Post: #74

Kinda getting the feeling from looking around that low interest rates have made it more or less impossible to find good passive investments.

Is that about right?

Post: #75

^^

You got that right. FED screwed savers with low interest rates. Close to zero for years!