When withdrawing money to live on, I don’t care how many stock shares I own or what the dividends are – I care about how much MONEY I’m able to safely withdraw from my total portfolio without running out before I die. A lot of academics have analyzed total market returns based on indices and done Monte Carlo simulations of portfolios with various asset allocations, and have come up with percentages that you can have reasonable statistical confidence of being safe.
What’s also really important to realize here is that when I took the exam I was teaching people to study for, I didn’t get a perfect score. In fact, I didn’t even get close to a perfect score. I passed. But I also knew a lot about this exam—way more than somebody who was just getting started diving into studying for it. And it was because of that, because I was just a few steps ahead of them, that they trusted me to help them with that information. To support this, I provided a lot of great free value to help them along the way. I engaged in conversations and interacted in comments sections and on forums. Most of all, I just really cared about those people, because I struggled big-time with that exam myself.
Investing in coins and collectibles: Buffalo nickels and Spiderman comic books are good examples of coins and collectibles that can rise in value, and thus offer opportunity for passive income investors. You'll need to get up to speed on the value of any coin or collectible under consideration, but once you do so, you're on the way to price appreciation on a commodity you'll be paying a lower price to buy, and will garner a higher price when you sell.
This is a touchy subject amongst some groups, but I want to share my take on it. I have been involved full time in the home business industry for 10+ years. Some of that time has been spent in MLM where the idea of working 3-5 years and creating a walk away residual income is promoted and sold. I have been very fortunate to have tremendous success in that arena, working in that type of compensation model for 7 of my 10 years. During that time frame I’ve had enough time to see trends and see that this promotion of walk away income doesn’t exist.
My dividend portfolio on Motif Investing holds three exchange-traded funds and 10 individual stocks. Just one of the stocks (Ford Motor) has a negative return and the entire fund is up 34% over the past year. Dividend stocks are by far the most passive income investment you can make if you invest in large companies that have stood the test of time.
Index funds provide you with a way to invest in the stock market that is completely passive. For example, if you invest money in an index fund that is based on the S&P 500 Index, you will be invested in the general market, without having to concern yourself with choosing investments, rebalancing your portfolio, or knowing when to sell or buy individual companies. All that will be handled by the fund which will base the fund portfolio on the makeup of the underlying index.
I guess I just don’t understand why the specific importance of focusing on “dividends” instead of focusing on the total return of your investment, including stock appreciation. I don’t really care if a company decides to issue a dividend or not; presumably, if they don’t issue a dividend, then they’re doing other things to increase the value of the company, which will be reflected in the stock price of the company. As an investor, I can make money by selling a percentage of my holdings or collecting dividends, and I don’t really care how that’s divided up – it’s an artificial distinction.
Good ranking FS, I’d have to agree with the rankings. And it looks like your portfolio covers five of the six! Some people consider real estate passive will others classify it as active. But every scenario is different, whether you are doing all the maintenance and managing yourself, or you are contracting out a lot of the work. Obviously it takes a lot more time and effort than purchasing a 36 month CD and “setting it and forgetting it.”
In June, he put ads on his site with Google Adsense, and within the first hour, earned $1.08 with three clicks. He earned $5 the first day, $7 the second, and then eventually began pulling in $15-$30 a day. In October, he created an ebook exam study guide priced at $19.99. By month’s end, he earned $7,906.55 — more than he had ever previously earned in a month.
While this does seem like sound logic on the surface, it is pretty obvious only a moron would put $50,000.00 into a business and not quantify the risks/rewards. If Ethan is worth 5 billion dollars and puts $50,000.00 into a losing business do you think he would just walk away? Obviously he would. If Ethan takes out a loan for $50,000.00 and his business is hemorrhaging money daily to the point he is losing more money trying to run the business than to simply pay back the loan, do you think he would just walk away? Again, obviously he would! These stupid analogies with less than a moment of critical thought being put in is what makes MLMers look incredibly stupid and proves they are not real “business owners”.
Do you know the importance of “Residual income”? Let this sink in for a moment or two; The average millionaire has at last three streams of income and I can guarantee one of them is residual income. But, what’s the big deal? Well, this is capitalism we are talking about. It only really matters if you’re perhaps an entrepreneur and pondering the thoughts of truly making it big. Even if you’re simply trying to make a few extra bucks online, monthly recurring (residual) income is definitely the way to go. Check it out!
Here’s the truth: a successful business is something that successfully solves a problem. And that business can make more money in two ways: solving more people’s problems, or solving bigger problems. The cool thing about the EP Model is that sometimes these products don’t even have to be yours. You can generate income by recommending other people’s or companies’ services or products. This is called affiliate marketing. It’s actually how I’ve made most of my money since I started in 2008.
My esteemed marketing colleagues initially balked at the idea of creating products that generate royalties, so I can understand how creating something from nothing might be daunting for those who aren’t even in creative roles. However, realize there is this enormous world out there of photographers, bloggers, artists, and podcasters who are making a passive income thanks to the Internet.
Or you could do joint ventures/strategic alliances for your business or for other businesses and make residual cash flow for $0 investment.. that’s what I do lol. No money, no risk, little time, 20+ years working from home. Just connect companies and take a %, use the Internet to do it locally or globally, be the intermediary & connect companies…. ;-)
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However, with passive income, there is not a direct connection to time involved. Once the original work is completed, the income continues to come in as long as demand for the product or service exists. Each time a song is downloaded, the musician receives money as a passive income. They did not have to record the song again or do additional work for each download, yet they are paid for their original work.