[michael610]

Hi all,

I'm just wondering what everyone's opinion is of businesses solely based on passive income? These include affiliate marketing, forex trading, investments etc.

I'm actually struggling with my mindset at the moment, particularly with Forex trading. I feel guilty because I'm not directly providing value to someone (as would be the case with a traditional products/services based business).

Thanks everyone.

 

[sam23]

First, let me welcome you to LamboTalk!
.
Hmm. Interesting first post/question and something that I really never considered in that way.

I can understand how you're looking at it (Forex), michael610, but I think that that is incorrect. Forex facilitates liquidity/convertibility of currencies which supports international trade...traditional businesses.
I'll leave affiliate marketing and investing for others to comment on...and/or will chime back in later.

 

[Russk]

When it comes to passive income I'll stick with real estate.

 

[Korntera]

When it comes to passive income I'll stick with real estate.

Agreed, I only have one rental currently but will add more.

 

[sam23]

When it comes to passive income I'll stick with real estate.

Second agreed!

In all honesty, I don't consider Forex or stock investments to be "passive investments". Stocks where you do nothing but collect dividends is passive, but not if you are dependent on trading to make a profit. The same principle applies to Forex. You don't make a passive return. You have to actively trade.
Real estate is passive ... if you are buying and 'sitting' on it until the market improves for you to sell. It is not, imo, passive if you develop properites or actively maintain them (like with apts/rentals/etc.).
MTM and affiliate marketing is passive if all you do is rely on commissions from your affiliates/recruit sales.
Other passive incomes include CD's and bank interest.
Passive income is fine, but it is unlikely that you will get a large sum from that type of investing simply because they are usually "safe" and have a very low ROI. That is, you need a VERY LARGE sum invested to make a decent return.
At least, that is my humble opinion.

 

[michael610]

First, let me welcome you to LamboTalk!
.
Hmm. Interesting first post/question and something that I really never considered in that way.

I can understand how you're looking at it (Forex), michael610, but I think that that is incorrect. Forex facilitates liquidity/convertibility of currencies which supports international trade...traditional businesses.
I'll leave affiliate marketing and investing for others to comment on...and/or will chime back in later.

Thanks for the welcome.

I completely agree with your view. For some reason my mind seems to always try to convince me I am doing something unethical. I still can't figure out exactly what is causing this.

When it comes to passive income I'll stick with real estate.

I agree that real estate is a great option, however the large capital investment excludes it as an option for me at the moment.

Second agreed!

In all honesty, I don't consider Forex or stock investments to be "passive investments". Stocks where you do nothing but collect dividends is passive, but not if you are dependent on trading to make a profit. The same principle applies to Forex. You don't make a passive return. You have to actively trade.
Real estate is passive ... if you are buying and 'sitting' on it until the market improves for you to sell. It is not, imo, passive if you develop properites or actively maintain them (like with apts/rentals/etc.).
MTM and affiliate marketing is passive if all you do is rely on commissions from your affiliates/recruit sales.
Other passive incomes include CD's and bank interest.
Passive income is fine, but it is unlikely that you will get a large sum from that type of investing simply because they are usually "safe" and have a very low ROI. That is, you need a VERY LARGE sum invested to make a decent return.
At least, that is my humble opinion.

You make a good point. I have seen trading referred to as "semi-passive" income, since the profit you make occurs after your initial time commitment (i.e. your analysis and entering the order/trade).

 

[BigBadLambo]

sam23 is right on the money.

You sound young. First off passive income is great, but you don't start with passive income. You develop active income and bust your ass making it. You then invest it into some boring low interest thing and it generates passive income and you don't worry about working, or the markets, or anything else. Nice feeling - I am definitely not there yet.

Real estate is definitely not passive. I am constantly evicting people, fixing apartments, collections, etc. I wish it was passive. I know there are aspects of real estate that can be passive, but I have a hard time buying a property and holding it and selling for more later. That is more like speculation not passive investing.

My goal has always been to invest $6 Mil into some sort of dividend/interest/mutual fund and be able to collect 6% which would be approximately $360k per year. Hopefully the money grows beyond the $6 Mil I started with. Even better goal is to have the $6M in safe stuff and have another $6M to screw off with on higher risk/higher reward investments.

 

[PacmanFever]

easiest passive income is of course real estate. by that I mean the home you or a family member lives in.

the other is investing. Why so many rich guys like focusing on investing. You find an amazing business, give them money to expand, get % of profits, live like a king.

Of course #1 is easier. There's the "markets" but nothing ever beats buy & hold, which is also passive.

 

[Apex]

Rent houses are good but always bear in mind repairs and who you're renting to (elementary stuff I know). Stocks are my favorite passive income, I don't trade but just collect dividends. Diversify in safe stock with the highest yield. Sometimes you'd get lucky, I didn't have 100k in PNY but if you did, in just 24 hours you'd have 1.5 million (this occurred yesterday). So playing it safe does sometimes yield great rewards. BUT to get to that level of living off passive income as said before you must have some type of active income.

PS: surprised your a silver star supporter and just joined the site with I assume no lambo. Use that money to invest instead lol!

 

[michael610]

Thank you very much for the replies everyone. I really appreciate it.

 

[2pongz]

If you are looking for passive income, rather than owning house rentals and stuff, look into REIT (Real estate trust). They are listed in most major exchanges similar to a stock, they have better dividend yields (usually range from 8-20%+), they pay monthly (stock dividends mostly pay quarterly), they also have high liquidity (sell those **** easy anytime you feel like it). I would have them plenty of them if I were into passive income right now but i'm all for capital growth (look into ETFs or index funds if you don't enjoy picking your own stocks).

 

[Korntera]

To own a REIT you typically need to be a certain type of investor and prove that you are not over invested in real estate. I had to sign all sorts of docs before buying into the REIT that I invest in.

 

[2pongz]

To own a REIT you typically need to be a certain type of investor and prove that you are not over invested in real estate. I had to sign all sorts of docs before buying into the REIT that I invest in.

Are you talking about building up your own REIT? or just own it using a brokerage (like a stock).

 

[Korntera]

Just owning one like a stock and I didn't make that big of investment either.

 

[2pongz]

Just owning one like a stock and I didn't make that big of investment either.

Cool, I never looked into it that much except for the obvious details. I'd own them if I were into passive income. They look really attractive in terms of dividend yield and liquidity. But right now I can only get into growth stocks because if I were to get involved with passive income, my capital isn't that much significant yet so i'll focus in snowballing it and maybe soon own a more significant passive income portfolio.

 

[djantlive]

What's the deal with forex? Seems like a scam as many make wild claims

 

[flip5577]

What's good about your post is, you are interested in starting a business and passive income. Both are very good things. What may be a little discouraging for a beginner is being told to jump into real estate as step one

My suggestion for you is, look at all the different ways to earn passive income that you CURRENTLY are thinking about exploring, starting or are interested in. Then rank them in terms of which one is easier for you to start doing today. Take the easiest one and put your effort into doing that ONE thing right, and for the time being forget about the rest. The goal here would be to get the experience and understanding of what it will take to turn that idea into a successful passive income stream. Try to get it to a point where it is self sufficient (or to a point where the dollar value of your time is incredibly un proportional in your favor). Say youre doing affiliate marketing sites. Get your site to a point where its making continuous money and you only need to do an update to it every so and so often.

When you reach that point, then make the decision to investigate starting another PI:Business. I believe that experience will make you more likely to be successful in the long run. Your full attention will be put into one idea, you will learn and refine your strategy and understanding of that business and since your efforts wont be diluted (or shared) between 3 or 4 different PI ideas, you'll get to your returns a lot faster (in my humble opinion).

Good luck!

 

[BillyK]

Hi all,

I'm just wondering what everyone's opinion is of businesses solely based on passive income? These include affiliate marketing, forex trading, investments etc.

I'm actually struggling with my mindset at the moment, particularly with Forex trading. I feel guilty because I'm not directly providing value to someone (as would be the case with a traditional products/services based business).

Thanks everyone.

I just got on the site today, but if you are still here, then here is my two cents. I made 57% in Forex last year. Just have to find the right trader, and that is not easy. I plan to reinvest this year and eventually have a monthly income from the profits. Hit me back if you want more info

 

[BillyK]

Second agreed!

In all honesty, I don't consider Forex or stock investments to be "passive investments". Stocks where you do nothing but collect dividends is passive, but not if you are dependent on trading to make a profit. The same principle applies to Forex. You don't make a passive return. You have to actively trade.
Real estate is passive ... if you are buying and 'sitting' on it until the market improves for you to sell. It is not, imo, passive if you develop properites or actively maintain them (like with apts/rentals/etc.).
MTM and affiliate marketing is passive if all you do is rely on commissions from your affiliates/recruit sales.
Other passive incomes include CD's and bank interest.
Passive income is fine, but it is unlikely that you will get a large sum from that type of investing simply because they are usually "safe" and have a very low ROI. That is, you need a VERY LARGE sum invested to make a decent return.
At least, that is my humble opinion.

Sam that is not true if you are using a managed trading account in Forex. I have invested in this in 2015 and look at the account every couple weeks. It is all about finding the right trader. I found him and last year he took my $5800 to almost $9300 in 12 months. Thats passive and a great return!

 

[michael610]

I just got on the site today, but if you are still here, then here is my two cents. I made 57% in Forex last year. Just have to find the right trader, and that is not easy. I plan to reinvest this year and eventually have a monthly income from the profits. Hit me back if you want more info

Thank you very much for your reply Billy. Sorry I took so long to get back to you.

I will continue to trade myself. It's just a matter of overcoming this guilt.
I've been researching zero sum games - I'm a bit confused that a lot of sources say that trading is zero sum and investing isn't. I always thought that "buy and hold" investing is still trading since you are interacting with other market participants.

Thanks to everyone else for their replies as well. I really appreciate it.