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I'm not sure there is such a thing as completely passive income. Wealthy investors (think China, Saudi Arabia, and Japan) have a lot of money (say 70 trillion)
by helveticaman 18y ago
I'm not sure there is such a thing as completely passive income. Wealthy investors (think China, Saudi Arabia, and Japan) have a lot of money (say 70 trillion) and thousands of people trying to allocate it efficiently. They don't do so well. Why would you?
Also, my understanding is that real interests rates are currently negative. On top of it all, the combination of a nominal capital gains tax and inflation means you lose ((inflation * .15) * your net worth) every year in this manner, at least if you are a US citizen. In light of all this, perhaps you should consider spending money on your intellect; it's not taxed, and it has some degree of liquidity. Alternatively, buy a cheap foreclosed house and rent it out; that may be profitable right now.
- nickmolnar 18y agoWhile people's portfolio's are hurting right now, for the most part you can make a positive real return on investing in dividend paying stocks or long-term bonds. The only catch is that the rate is really low, so you need to already be very wealthy to make it work. China, Saudi Arabia, and Japan have political considerations, as well as financial, so they are more likely than an impartial investor to take unnecessary risk or allocate funds poorly.
- lliiffee 18y agoOne reason I might do well is that it is far, far easier to profitably invest 70 thousand dollars than 70 trillion.
- thomasmallen 18y agoNot an investor, but... > They don't do so well. Why would you? Maybe because an individual only has to resolve a handful of ideas in their head, rather than thousands? Or perhaps due to the absence of competitive forces involved with ulterior motives.