4 ms·

Low cost S&P 500 Index fund. Very passive :)

by graton 9y ago

kangnkodos 9y ago
Almost the same thing... the ETF with the ticker SPY. 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.
- actsasbuffoon 9y ago
  You can also invest directly into an index fund rather than going through an ETF. Depending on your situation, both have pros/cons. Many companies offer index funds, though Vanguard's seem particularly popular (possibly because they invented index funds, IIRC).
  - jjeaff 9y ago
    They are also popular because the company is owned by the share holders of their funds. So huge dividends and salaries aren't going to employees or shareholders.
- swarnie_ 9y ago
  SPXL if you want to play with leverage. Wait to see if the commander tweets 5 minutes before markets open before buying in on any given day, it will help.
- jjeaff 9y ago
  VOO fees are 0.05% vs 0.09 for spy. 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.
  - astura 9y ago
    Don't forget iShares too, which are usually traded commission free for many brokers (I know for Fidelity and USAA...). IVV has an expense ratio of 0.04% and they have other really low cost ETFs too.
    - jjeaff 9y ago
      I think there are some additional internal costs with ETFs that cause it to have lower returns over time. At least, I remember seeing some comparison graphs to that effect.
slavoingilizov 9y ago
And very capital-intensive. Most people would benefit more from passive but labour-intensive ideas.
- savanaly 9y ago
  I don't understand, whose labor are we talking about when you say "labour-intensive ideas" if not yours? And if it's yours how is it passive?
- ghaff 9y ago
  If they're "labour-intensive" that's pretty much the definition of not passive. I suppose it's possible that you could invest significant effort into setting up an Amazon affiliates site or write a book or whatever and just let it run but most people aren't going to have a lot of luck with that. Generally speaking, passive investments require investing capital and then collecting returns from that capital.
  - mathgeek 9y ago
    > If they're "labour-intensive" that's pretty much the definition of not passive. Generally it's understood that "passive income" on HN refers to income resulting from an initial investment of labor that continues to generate revenue with little to no additional labor input. By the wider definition, yes, you are correct.
    - astura 9y ago
      An initial investment - that investment can be labor or it can be capital or it can be both. In the same way you can say "work at Starbucks part time for a year and then invest 100% of that extra income into an index fund for passive income" rather than "work on a book for a year and collect book sales as passive income."
    - ghaff 9y ago
      That's fair enough. That said, it's generally hard to generate purely passive income by just investing labor. Software is somewhat the exception for this group but if you just write something and stop working on it, any income is probably going to decline fairly quickly.

Low cost S&P 500 Index fund. Very passive :)

by graton 9y ago

Low cost S&P 500 Index fund. Very passive :)

Almost the same thing... the ETF with the ticker SPY. 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.

actsasbuffoon 9y ago
You can also invest directly into an index fund rather than going through an ETF. Depending on your situation, both have pros/cons. Many companies offer index funds, though Vanguard's seem particularly popular (possibly because they invented index funds, IIRC).
- jjeaff 9y ago
  They are also popular because the company is owned by the share holders of their funds. So huge dividends and salaries aren't going to employees or shareholders.
swarnie_ 9y ago
SPXL if you want to play with leverage. Wait to see if the commander tweets 5 minutes before markets open before buying in on any given day, it will help.
jjeaff 9y ago
VOO fees are 0.05% vs 0.09 for spy. 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.
- astura 9y ago
  Don't forget iShares too, which are usually traded commission free for many brokers (I know for Fidelity and USAA...). IVV has an expense ratio of 0.04% and they have other really low cost ETFs too.
  - jjeaff 9y ago
    I think there are some additional internal costs with ETFs that cause it to have lower returns over time. At least, I remember seeing some comparison graphs to that effect.

slavoingilizov 9y ago

And very capital-intensive. Most people would benefit more from passive but labour-intensive ideas.

savanaly 9y ago
I don't understand, whose labor are we talking about when you say "labour-intensive ideas" if not yours? And if it's yours how is it passive?
ghaff 9y ago
If they're "labour-intensive" that's pretty much the definition of not passive. I suppose it's possible that you could invest significant effort into setting up an Amazon affiliates site or write a book or whatever and just let it run but most people aren't going to have a lot of luck with that. Generally speaking, passive investments require investing capital and then collecting returns from that capital.
- mathgeek 9y ago
  > If they're "labour-intensive" that's pretty much the definition of not passive. Generally it's understood that "passive income" on HN refers to income resulting from an initial investment of labor that continues to generate revenue with little to no additional labor input. By the wider definition, yes, you are correct.
  - astura 9y ago
    An initial investment - that investment can be labor or it can be capital or it can be both. In the same way you can say "work at Starbucks part time for a year and then invest 100% of that extra income into an index fund for passive income" rather than "work on a book for a year and collect book sales as passive income."
  - ghaff 9y ago
    That's fair enough. That said, it's generally hard to generate purely passive income by just investing labor. Software is somewhat the exception for this group but if you just write something and stop working on it, any income is probably going to decline fairly quickly.