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In my opinion, passive investing rarely has the capacity to earn someone a substantial amount of money. Large, stable returns occur in only two situations: 1) Y
by ruswick 14y ago
In my opinion, passive investing rarely has the capacity to earn someone a substantial amount of money. Large, stable returns occur in only two situations: 1) You invested a huge amount of initial money, so even a low yield returns a lot of money. (This is, from my understanding, how a lot of super-wealthy people do it. Stored wealth perpetually generates income. If one has a massive amount of stored wealth, they earn a massive amount of passive income.) or 2) You invest over long periods of time.
Making large amount of money in short periods of time through investing necessitates either making a very active, labor-intensive investment (like buying a small company or flipping houses), or resorting to speculation. Obviously, this is not passive.
The market is self-correcting. It's absurd to believe that one can earn prodigious amounts of money quickly, predictably, and effortlessly.
However, you should take this with a huge grain of salt. I am not an experienced investor. (In fact, I'm fairly sure that the law prohibits someone my age from investing. Even if it didn't, I wouldn't be in a financial position to invest anyway.)
- gregcohn 14y agoYes but there's such a thing as leverage on labor. E.g., you could start a coffee cart & hire someone to manage it; be primarily a financial partner in purchasing a small business or house-flip; etc.