When I researched this years ago, I concluded the costs were less expensive than any S&P 500 mutual find I could find. Not sure if that's still true or not.
Many companies offer index funds, though Vanguard's seem particularly popular (possibly because they invented index funds, IIRC).
But of course fees are effectively much higher if you are paying transaction fees.
But vfiax (vanguard) or swppx (schwabb) can't be beat (.04 and .03) when it comes to fees. And it is pretty common for brokers to offer free Mutual fund trades or you can get an account directly with those brokers and trade for free.
Not as passive:
Amazon FBA: Run a side business selling products on Amazon. I have hired 1 part time employee now that works tasks I have outlined during the week. I work 1 to 1.5 days per week organizing the warehouse and custom orders. In the green after 3 years. It's also fun for me.
I did, however, find a little unsolved problem on Amazon that sucks up seller's time, so I built a solution[0] for it with about a month of work, and now it generates >$2k/m with 1-2 hours of customer support work every month.
But.. in case people don't mind. How feasible is it to make passive income by having a blog? I mean by having advertisements or amazon click-thru links.. is it worth the time to set up and use a blog to generate passive income?
-> kind of passive in the long run
It can be done part time and still be profitable, but it can't be done passively unless you're a genius in your fields and everyone is beating down your door to hear what you have to say (in which case you should write a book).
I'd say the amount of time you'd need to spend monetizing & driving traffic wouldn't really make it passive.
Simpler question, do blogs generate at least $100/yr?
You could potentially farm out the work but that applies to a lot of businesses. :)
I have a technical blog/youtube and most of the "profit" is from having that on my resume.
I'm in the process of looking at blogging tools to do something very similar. I'm kinda worried about having a history though in a few years that shows I only post during interview times :D.
Feel free to message me if you'd like to chat more.
Having kids is a terrible one.
If you include kids in the mix, then, yes, much more expensive and the toll of a failed marriage much more significant.
That being said, I wouldn't advise doing it solely for financial reasons. :)
There's some grey/in between area though, real estate can be passive (1 unit with long term tenants) or a full time job (multiple properties, distressed properties in need of significant repairs, or something like AirBnB - unless you've got employees doing all the work). Same with stuff like writing, if the effort is already done and you just sit back and collect ad revenue or referrals, that's passive. If you're actively writing blog posts regularly, its not passive.
As far as the FBA case, if you've hired someone to do all the finding deals, packing and shipping, it is pretty much passive; if you've got a white label product and you've set up your suppliers to ship regular shipments from China direct to Amazon's warehouse, its probably pretty passive at that point.
Selling on Amazon or eBay is surprisingly streamlined. Exceptions occur, but they're pretty easy to take care of if you budget them into your margins and don't try to jerk buyers around.
I sold a few hundred dollars a week on eBay and a "problem order" comes up once a week at most. Usually, it's just a full refund or a new shipment.
Or stuff like ad revenue from apps or sales of books. Maybe passive now, but probably took quite some effort getting to there. It may be passive if the long tail is much bigger than the initial investment, but for most people I guess it's not.
If you buy 500 shares of VYM, you can expect a passive income of $100 per month.
I'm finding it difficult to get loans. No-one talks about this issue.
On a side note: none of this is really passive.. mining, real estate, and drop-shipping are all very active income streams. Unless you were born with a silver spoon, you probably won't find truly passive income.
If you like reading, you can find most popular books in the past year here. https://toptalkedbooks.com/hackernews/2018
I generate some passive income from (by spending 1-2 hours a week):
- stock & cryptocurrency picking
- Calls with industry research firms
- Earn.com
I have a large sum of money coming in later this year, and I'm thinking about investing it. Passive investment with an index fund is generally a good long-term strategy, though I strongly suspect we're in for a recession in the near future. I'd hate to lose 20-40% of my investment within a few months of putting it into the market.
On the other hand, the amount of money I'll have on hand will be enough to do some things that most people can't. For instance, I'd have enough money to execute an option without trading on the margin on fairly large stocks, as opposed to selling the options contract, which seems to be the more common strategy. If I understand this correctly, that should enable me to be able to make small but reliable returns with relatively little risk.
Hopefully I didn't mangle the terminology too badly. I'm researching all of this stuff somewhat frantically, and I'm new to it. I'll have to spend a couple months doing paper trades before I'm comfortable with putting real money into options.
No customers, no employees and no investors and truly location independent...
If you had a uniquely good trading algorithm isn't it effectively just trading by hand but faster? And related question, if you're doing a lot of trades, wouldn't trading transaction fees eat you alive?
Sure, I can do it all by hand, the key here not speed, but automation... I rather be fishing or drinking beer by my pool instead... Trading fees: 5$ fee on $50k/$100k position is frankly irrelevant for example...
