Passive Income - What's Your's?

[osirissail]

aspiringsailor:
If you move out of the USA and take up a lifestyle as an ex-pat in some little country, you will in most cases not need any health-insurance as all the countries have free medical for their citizens/residents. The facilities may not be pretty but they work for 95% of the people of the world that do not live in the USA. Then there are the private medical systems available as the 'dual track' system in most western countries. All of which are economical enough that you can pay cash for your medical needs and not threaten your beer/rum budget.

[newdawn]

Originally Posted by aspiringsailor

i have yet to even buy a boat yet, but my strategy is to just stick it out in the military an retire. at 42. a check every month, pretty much guranteed.

Sounds like a good plan here...ours is the same. Retiring after 24 yrs in military.

[Charlie]

Originally Posted by Christian Van H

If you invested in real estate you have recently lost a full 1/3 of your investments value. If your income comes from real estate rental, please explain how you manage your properties while cruising, without paying someone an arm and a leg to look after them for you? I'm having a hard time imagining trusting someone with my investment while I'm 12,000 miles away in the tropics...

Hi Christian: Real Estate tips that I picked up from my elders were 1) buy for cash flow. Even if the value of your buildings go up or down you still have the cash flow. 2) A good property manager does charge an arm and a leg -- when you are working out the numbers on the buildings account for that cost. If it still cash flows buy it. If not don't buy it. 3) start when you are young. If you buy a building when you are 25 with a 30 year loan and that building cash flows -- you can count on that income when you are 55 from a building that you own free and clear. If you buy in the right place that building has probably appreciated as well. I bought a building a year when I was 28. When I turned 35 I started trading them for larger buildings. It has worked well. Now if I can just payoff the big buildings and dissolve my partnerships I'll be set. 9 years to go.

[osirissail]

- - Unless somebody changed the dictionary, real estate is not "passive" income. You must physically maintain the real estate, deal with zoning, taxes, tenants, repairs, eminent domain problems and gosh only knows what else. Even owning just "dirt" these days is getting "active" as you just cannot let the property fill up with trash, or acquire attributes that threaten the neighboring area. All that is very "active" income as you have to do work or pay somebody to do the work and even then you have to monitor your managers.
- - I would suggest that the thread is about types of income that require no active participation except for taxes and "rolling over" the investment such as bonds, stock, mutual funds, pensions, annuities.
- - The idea is what sources of "passive income" are good, bad, neutral to have while you are floating at anchor in some distant and isolated island sipping rum and watching the wahines wiggle?

[mesquaukee]

Stocks that produce dividends, healthy dividends of 8% to 15% (sometimes referred to units or limited partnerships). Stocks in something that will never go out of style or more correctly need of such as oil (in the ground, not the processors and handlers of), water and electricity.
So the economy does badly for a while, we need still need oil, water and electricity. So the price goes down, so what, it will go back up. The price is meaningless unless you panic and sell. This is of course if you researched, bought wisely and diversified.
In 10 years we have received more than 150% of the initial capital outlay back in dividends and even in today’s economy they are worth a lot more than we paid for them.

[04 Marine]

In reverse order, now to way back when. If it's still around, one day I'll even be old enough to consider Social Security.

I consider myself to be retired for most of each day. A 3 hour day is a grueling one. I also do custom nautical and aviation metal art, i.e., weathervanes and such. If you served on the Tang or flew an F-8 Crusader and now you want a weather vane of it, I'm the guy that builds it. That led to learning how to weld TIG, MIG, arc and gas. That allowed me to build a CNC plasma cutter to cut my art, then came the lathe and mill. Now I own the rights to one of the plan built servo vanes I build custom stanchion bases and welded portlights for steel boat builders and restorers. Send me a private email if you see something you have an interest in.

We use existing funds to make interest only loans, but only when I can hold the 1st TD for a property. These loans go through a broker who prequalifies the borrower and the property to my requirement. Loans are generally written for no more than 3 years and generate 15% interest. I like the loans that are between 10 and 40K. Check with your local real estate broker.

Owned an aviation fuel service that I built from scratch and sold seven years later. It pays to be a thorn in the side of the big guys.

Managed a large general aviation airport long enough to qualify for the county retirement plan and then promply retired.

Entered the Marine Corps in 1966 as a Private straight out of high school. Retired in 1990 as a Major with a BS and MBA plus the Command and Staff College and Naval War College.

[cat man do]

Originally Posted by osirissail

- - Unless somebody changed the dictionary, real estate is not "passive" income. You must physically maintain the real estate, deal with zoning, taxes, tenants, repairs, eminent domain problems and gosh only knows what else. Even owning just "dirt" these days is getting "active" as you just cannot let the property fill up with trash, or acquire attributes that threaten the neighboring area. All that is very "active" income as you have to do work or pay somebody to do the work and even then you have to monitor your managers.
- - I would suggest that the thread is about types of income that require no active participation except for taxes and "rolling over" the investment such as bonds, stock, mutual funds, pensions, annuities.
- - The idea is what sources of "passive income" are good, bad, neutral to have while you are floating at anchor in some distant and isolated island sipping rum and watching the wahines wiggle?

Get a grip.

My property manager takes care of the tenants and maintenance (to a pre-determined dollar value).
My tenants take care of the yards.

Bank accounts can be set up to automatically pay rates and taxes, but in reality it is 3 minutes a year to do an electronic transfer.

I have vacant land, a slasher hits it twice a year, problem solved for a 2 minute phone call..

Shares you have to monitor continually or pay a manager, hopefully he will sell out before they drop to zip.
Hopefully you wont get margin called if using borrowed funds.
You have to pay taxes on the profits.
You have to check and maintain to ensure the manager is doing the right thing.


The big difference I see is that If I go away cruising and come back, I still have houses and land there.

The same can not be said about shares.

[George Wade]

Originally Posted by cat man do

Get a grip. My property manager takes care of the tenants and maintenance (to a pre-determined dollar value).
My tenants take care of the yards......

The big difference I see is that If I go away cruising and come back, I still have houses and land there.

The same can not be said about shares.

Whatever you can do that is very familiar; can be delegated, fairly; works with some affordable communication: is going to seem close to 'Passive' — whether it really is or not. I have one friend who was a genius about managing property, a gambler with the cash earned; and a wife who is great at spotting a perfect property but who just cannot manage it. Can you imagine them all sailing the same boat?

Running a concrete mixing and delivery plant for ferrocement builders would not count, would it? The yachts would float but the business would sink if you delegated from your cockpit.

Friends are building a modern, web Biz, that I can use to self sponsor any multihull that is for sale next year. This year is not passive as there is the skill of sales to be learned. Once we are 'Needed' that will drift towards passive. Something like affiliate sales that have been recommended before. Starting small seems safe. Hobie to Woods in five steps. I know it is supposed to be seven, but simplicity is a virtue, too.

While you are right about shares not being a good bet, now: I'll bet they will be again in 15 ~ 25 years. Just stick around to let your wisdom catch the world coming by again...