The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Join free.

Join over 80,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.

Free registration at the forum removes this block.

Help with passive income once rich and busy?

Anything related to investing, including crypto

e_fastlane

Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
96%
May 2, 2012
79
76
I've had this same problem for years now and it's only increasingly getting bigger and bigger.

1. I've been making more and more money, which means my cash fund has been growing fast
2. I don't trust investors or financial advisors. If they were anything but charlatans and actually knew how to beat the market, they wouldn't need me.
3. No free lunch and No pain no gain. I recognize that if I don't learn investing (whether in realty/stocks/etc.) myself or put in time myself then I won't be rewarded.
4. My time is much better spent MAKING my money than dividends that could be expected by spending it learning about investing.
5. Even if I was to learn an investment strategy, my time is still much better spent making the money in the first place than managing whatever the strategy is. I'm not interested in the possibility of worrying about my renters AC/roofing problems for a possible extra XX,XXX a year.

At first it wasn't too big of a problem, but lately I feel like it's starting to become almost irresponsible to just have this much liquid assets and not be making money on it.

The only thing I have come up with that I might end up doing is throwing most of it in an index fund. But as we all know, thats a very very long term and minimal return (when accounting for all the crashes and not knowing if you timed the market right when you put in the money).

Any advice?
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

biggeemac

Gold Contributor
Speedway Pass
User Power
Value/Post Ratio
150%
Jun 25, 2011
826
1,236
48
Have you looked into doing hard money lending? I've been at the borrowing end of hard money. It seems like a pretty decent investment provided you get with a reputable broker.
 

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,079
169,498
Utah
You in the states?
 

e_fastlane

Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
96%
May 2, 2012
79
76
Have you looked into doing hard money lending? I've been at the borrowing end of hard money. It seems like a pretty decent investment provided you get with a reputable broker.

I only did minor research into it, so forgive me if I'm missing something, but what you are suggesting seems like literally a full time business. On top of that I would need to know the business and area really well to make good loan choices. It might be a good route for someone that's looking for ways to make money once their business dries up, but that kind of time investment is not right for me.

You in the states?

Yep, enjoying the great phoenix weather!
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

lowtek

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
332%
Oct 3, 2015
2,164
7,186
42
Phoenix, AZ
If you're an accredited investor (sounds like you should qualify) then aren't there a world of opportunities available?

You don't want to deal with renters (makes perfect sense), but could you just be the guy fronting a chunk of the cash for a group of investors? Seems like getting in on a big apartment complex with dedicated management staff would be pretty hands off, and a reasonable return. Certainly not risk free, but doesn't seem to require a full time energy commitment.

Just my $0.02 - I know F*ck all about managing a huge pile of cash. Just tossing out ideas.
 

ravenspear

Bronze Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
207%
Jul 25, 2016
181
375
I'm not interested in the possibility of worrying about my renters AC/roofing problems for a possible extra XX,XXX a year.

I would definitely recommend looking into real estate as well. You only need to give up about 10% of the rent for property management costs to eliminate this worry entirely and make it almost completely passive. If there are maintenance problems they handle it all and all you do is write a check (which shouldn't be a problem since you have a big pile of cash).
 

100k

Gold Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
149%
Oct 20, 2012
1,529
2,284
Have you looked into REITs? You get exposure in real estate without needing to worry about managing the stupid renters.

Another thing worth looking into are retail bonds / corporate bonds on the AIM (alternative investment market). You can borrow money to well establish brands like Vodafone, Tesco, B.T, HSBC, Lloyds Bank and get 5-8% return annually.

Advanced bonds search - London Stock Exchange
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Mcfroggin

New Contributor
User Power
Value/Post Ratio
75%
Dec 20, 2015
8
6
40
The problem you have is that big money is made in developing companies, but you do not have time.

You should consider networking to find/finance new companies with people in your community. Not only can it be profitable, but it is also gratifying to know you are bettering your community.
 

jlwilliams

Silver Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
199%
Dec 14, 2014
270
538
52
Honestly, if you are making good money and don't want to get distracted with management, an indexed fund may not be a bad idea. What you are talking about doing is as much a savings vehicle as an investment vehicle. The best return with the lowest risk and lowest attention required from you might be just to park it in indexed funds and ignore it while you continue to make more money to pack into the account.
 

Camaro68

Bronze Contributor
User Power
Value/Post Ratio
379%
Mar 16, 2017
29
110
Twin Cities, MN
I would second the index fund if you want a hands off, set and forget way to grow the extra capital. Reinvest dividends and send all your money there to be invested in the index.

You've stated that your energy is best put into making more money. That means you don't have the time to eat, breathe, sleep another endeavor and often, especially in its infancy, that is what is required of a venture to get it off the ground and functioning.

If you're unable to do that and make the commitment, then I'd set it and forget it. Historical returns in the market over large time periods (assuming you're relatively young and not nearing retirement) are fairly good. View any market corrections, or even recessions as a blue light special on stocks since you have a long runway to retirement.

Google a compound interest calculator. input your yearly investable income contributions and your timeline and play with assumed earning interest numbers. If you are socking enough away it doesn't take a large yearly return averaged out to provide significant and sometimes surprising end results.

I'm basically in the same boat. When choosing an investment vehicle in the market, I was looking at 1% differences in funds and trying to find the absolute best return, once I used the compound interest calculator I quickly realized that even if I only achieved a 4-5% compound return over a "working" life that it would blow any reasonable retirement stash I would have hoped for away, because I'm socking so much away each year.

If you're saving $5k/year and want a comfortable retirement in 20 years, you've got to hope for some pretty healthy returns sustained. If you are socking enough away, you can afford to take "average" or even slightly below and still be very, very well off. That's the luxury of large amounts and the reason that many ultra high net worth individuals can afford to park significant sums into Bonds rather than stocks. John Q Public would never reach retirement by generating ROI a percentage point above inflation, but if you have 10's of millions and you are unable to spend the interest generated at these rates, you just don't care.

Not assuming you have 10's of millions (if you do, rock on!) but the principle is the same. Focus on what you can control, how long you let the money "soak" and how much you add to the account each year....let the ROI cards of the market fall as they may year-to-year, but history shows that over an extended period and with yearly contributions you'll do very well.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

The-J

Dog Dad
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
264%
Aug 28, 2011
4,199
11,079
Ontario
My time is much better spent MAKING my money than dividends that could be expected by spending it learning about investing.

I disagree. Time spent learning about investing can mean time dividends in later years. Your business(es) won't last forever.
 

illmasterj

Silver Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
253%
Jan 19, 2016
209
528
40
1360m
This is one area where I strongly recommend taking the time to learn. Everyone in this thread, financial advisors, internet bloggers, journalists, your friends and family will all have opinions and as you're clearly aware, a lot of that advice is bad. Some while good, can also be misguided, especially if you aren't looking for "average".

I am not from the US, but the following has served me well as largely "mindless" investments allowing my assets to grow while I build my business:
  • government bonds
  • index ETFs
  • REITS
On face value, this is what most people look at but years of travelling has helped me to see opportunities in other regions. I'm currently building up a foundation of assets, with this in place and hopefully by then accredited/sophisticated investor status, there will be more private/alternate investments open to me.

Thing is, even in the above everyone will debate with you about which bonds, which ETFs, which REITS, etc. Take a holiday from work at some stage and read some financial literature, or read some of the books summarized by Derek Sivers on investing.

Something to keep in mind being in the states is dividends/distributions - I believe you'll be taxed on them, so you'd want to be in funds that reinvest them rather than pay them out. Combined with investments that have a low or no management fee, those 2 tips alone may add up over a lifetime.
 

MTF

Never give up
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
455%
May 1, 2011
7,560
34,430
I'm in the same boat. In the last few months I've spent dozens, if not hundreds of hours reading about various investment ideas. Here are some of the things I've considered:
  • P2P lending - I invested some money in P2P lending sites with 10-12% ROI. Most of the investments are collateralized, but I don't feel entirely comfortable about putting a lot of money into it and probably won't invest more. It's as passive as you can get, but risk-adjusted return is lower here than with other options.
  • short-term rental properties for Airbnb, etc. (@GlobalWealth's process) - after reading a lot about it, I think it's too big of a headache for me (still not entirely sure, but that's what I'm leaning towards). Even with a property manager, I feel it's too stressful and more like a business than an investment. This post (and other posts in this series) was eye-opening. It all comes down to the final paragraph: "The money I’ve earned as an Airbnb and VRBO host is better than what I’d collect as a traditional landlord. But that comparison is apples-to-oranges. One is active; the other is passive. One is hospitality; the other is real estate. They’re not the same industry."
  • traditional rental properties (apartments) - explained later.
  • stock market investing focused on dividends - decided against it because I have zero control over it. Dividends can change, companies can go bankrupt, interest rates can influence returns, etc. Rents generally don't fluctuate that wildly (and since I'd be buying and holding the properties for a long time, I wouldn't care much about the fluctuations in the property's price anyway). Moreover, since I found stock market investing too complicated and time-consuming to be able to pick individual stocks, I'd have to focus on index investing. The dividend yield from the best low-cost funds is about 3-4%, and that's too low considering that even if I hire a property manager, I can get 6-7% in my area.
  • REITs - as above, can't control them and if you don't know how to properly research them, it'd be better to invest in a REIT ETF (that generates about 4%, so it's too low).
  • bonds and stuff like that - get low returns borrowing to broke governments. No thanks.
  • buying digital assets/passively-managed websites - returns can be great here, but my primary business is also digital, so I'd rather diversify and own something more tangible.
  • forestry - I investigated the possibility of investing in land for forestry (managed by a professional forestry company). Returns were too low (4%) and the investment is too illiquid.
  • collectibles - returns can be incredible, but there's no cashflow so no, thanks.
In the end, I think I'll focus on rental properties and hire a property manager. Here's my reasoning:
  • if you buy at the right price and find a good long-term tenant, your returns are stable.
  • real estate protects you from inflation, and often appreciates beyond the inflation rate (though my focus is on cashflow, not capital appreciation).
  • it's very scalable, particularly if you hire a good property manager.
  • it's just a good retirement plan. Buy 10 or so good properties with cash and if your living costs are reasonable, you're set for life.
  • lower tax.
I'm going to take my time to figure it out and make sure it's the right path for me, but everything indicates that out of all the options I've considered, it's the best route for me.

Please keep us updated and let us know what you decided to do.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,079
169,498
Utah
I'm privy to municipal bonds which are tax-free, great if you're in the high income tax bracket.

Also many governments and municipalities have to operate at balanced budgets, unlike our printing press government.
 

Jakawan

We Buy Houses
Speedway Pass
User Power
Value/Post Ratio
443%
Sep 19, 2013
76
337
34
Oklahoma City
I've had this same problem for years now and it's only increasingly getting bigger and bigger.
Any advice?

I also suggest lending your money to real estate entrepreneurs. There's tons in Phoenix and really everywhere. Single family house flippers and landlords need fast money and they're willing to pay for it.

Example: Let's say they are buying a 3 bed 2 bath 2 car brick house..
After repaired value: $100k
Repairs needed: $20k
Purchase price: $50k
Bank lends 70% of appraisal at 6% interest with 1.5% origination fee.
But the real estate investor usually has to document every repair and show proof so they can get draws of $5k-$10k and extra hoops and maybe 2 weeks to close..

They would rather pay you 10% interest and 2-4 points because.. you may lend them 65%-70% of appraisal but you don't require draws or hand holding. So the rehabber gets the $18k up front and has less hoops to jump through. Also you could fund the deal in 2-3 days rather than 10-15.

And you make the rules. You could do short term or long term lending. They usually refinance or sell within 6-12 months. Or you could offer 10-15 year amortized notes if you want long term interest with less management. Short term notes you get the benefit of charging points though, but a little more hands on.

You hold a first position mortgage and note, you only lend 70% or less of appraisal. Your money is collateralized by real estate. Worst case scenario you break even by selling the house if your lendee defaults.
You can also require that they pay the 2-4 points up front. Thousands of dollars!!
You can also vet them out with referrals, tax returns, past deals, financial statement. Etc

You could hire one person to handle this type of investing for you. Running applications, create a relationship with an honest appraiser, and basically you just say yes or no and sign checks and watch the payments come in!
 

Tiger TT

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
198%
Dec 25, 2015
141
279
41
  • buying digital assets/passively-managed websites - returns can be great here, but my primary business is also digital, so I'd rather diversify and own something more tangible.
A website that's getting traffic and selling ebooks/digital products or getting passive income using adwords?

I would really appreciate if you gave a few examples on this one.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

EvanOkanagan

Gold Contributor
FASTLANE INSIDER
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
380%
Aug 2, 2013
579
2,198
As a couple people mentioned before, managed rental properties.

The largest time spend will be before & during the deal, but once you've bought it, especially with having a good property manager, it can be a great mix of high returns and little management.

I have only 3 of my 11 rental units managed for me, and even then I spend less than an hour per month thinking/focusing on my investments. If I had them all managed this would make this less of course. Also, returns of 10%+ ROI/ROE are not uncommon.
 

ravenspear

Bronze Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
207%
Jul 25, 2016
181
375
REITs are a good option if you want something in real estate even more passive than managed rentals but it should be noted that owning and managing actual property has some additional benefits over REITs. With REITs you only get one growth component, which is how much the fund appreciates per year. If it's a dividend paying REIT then it's really two counting the dividend. But with real property you get:

1. The appreciation on the asset (house/apartment whatever)
2. Monthly income above your expenses if the property is cash flow positive (which it should be or you shouldn't buy it)
3. If you use any leverage, the principal component of an amortized loan paid down by the tenant is a monthly profit
4. You get extra tax advantages including the ability to depreciate the purchase price of the investment property and any improvements made to it and the mortgage interest deduction if you have any debt on the property

If you look at the total return combining all of these it can often be 20% or more depending on the amount of leverage used. The price you pay for this is that your investment is quite a bit less liquid than it is with a REIT which can be sold in a day if you need liquidity where it might take you months to sell a house or apartment.
 
Last edited:

MTF

Never give up
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
455%
May 1, 2011
7,560
34,430
A website that's getting traffic and selling ebooks/digital products or getting passive income using adwords?

I would really appreciate if you gave a few examples on this one.

Reputable brokers sometimes sell such sites. Example: https://feinternational.com/buy-a-website/

One example from their current listings (it's an affiliate site so it's obviously not the most Fastlane idea, but you'd be buying it to diversify your investments and get additional cashflow, not to use it as your primary Fastlane vehicle):

For sale is an Amazon Affiliate business in the kayak and outdoors niche. The website provides guides and reviews for kayaks, fishing equipment, and camping gear.

Since purchasing the business in 2015, the owner has left the site largely on autopilot, allowing passive earning generation through the established domain. The original business, launched nearly two decades ago, offers a unique website with a proven history and a robust backlink profile.

This site presents a great opportunity for a new owner to take over an established affiliate business primed to take advantage of the approaching summer season high.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Tiger TT

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
198%
Dec 25, 2015
141
279
41
Reputable brokers sometimes sell such sites. Example: Buy a Website - Websites for Sale - FE International Website Brokers

One example from their current listings (it's an affiliate site so it's obviously not the most Fastlane idea, but you'd be buying it to diversify your investments and get additional cashflow, not to use it as your primary Fastlane vehicle):

Thanks MTF. I didn't know any brokers that are reputable. I will definitely follow this one.
 

MTF

Never give up
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
455%
May 1, 2011
7,560
34,430
short-term rental properties for Airbnb, etc. (@GlobalWealth's process) - after reading a lot about it, I think it's too big of a headache for me (still not entirely sure, but that's what I'm leaning towards). Even with a property manager, I feel it's too stressful and more like a business than an investment. This post (and other posts in this series) was eye-opening. It all comes down to the final paragraph: "The money I’ve earned as an Airbnb and VRBO host is better than what I’d collect as a traditional landlord. But that comparison is apples-to-oranges. One is active; the other is passive. One is hospitality; the other is real estate. They’re not the same industry."

I might change my thoughts about this. Just got back from a meeting with a local real estate agency that manages everything for you - from preparing the property for short-term rental to putting it up online (using their own accounts) to marketing it, managing bookings, cleaning, etc. As a passive investor you only put up the money and then cash checks (revenue sharing or a fixed amount). Might be exactly what I've been looking for.

Thanks MTF. I didn't know any brokers that are reputable. I will definitely follow this one.

As far as I know https://empireflippers.com/marketplace/ are also reputable.
 
Last edited:

SteveO

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
456%
Jul 24, 2007
4,228
19,294
I only did minor research into it, so forgive me if I'm missing something, but what you are suggesting seems like literally a full time business. On top of that I would need to know the business and area really well to make good loan choices. It might be a good route for someone that's looking for ways to make money once their business dries up, but that kind of time investment is not right for me.
It can be a full time job if you want to invest in the more aggressive notes. You can purchase the more stable ones as well. I don't know how much money you are looking to invest but a note can be purchased in quantities of one a year. A performing note with a low risk borrower on a solid property may be a lower return but not a lot of work either.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

BradD

Bronze Contributor
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
225%
Oct 11, 2013
109
245
Ottawa
I might change my thoughts about this. Just got back from a meeting with a local real estate agency that manages everything for you - from preparing the property for short-term rental to putting it up online (using their own accounts) to marketing it, managing bookings, cleaning, etc. As a passive investor you only put up the money and then cash checks (revenue sharing or a fixed amount). Might be exactly what I've been looking for.

Interesting, did they happen to quote you on how many pts they'll charge for the management? Wondering if they'll include the cleanings in the fee etc

I've been looking at Guesty for Airbnb management- fees ~3-4 %, they manage cleaners (i.e. they book, you pay), and all the guest communications. My property is in Vegas and I'm in Canada so the automation is critical, particularly for this to scale to 3-4 + units
 

MTF

Never give up
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
455%
May 1, 2011
7,560
34,430
Interesting, did they happen to quote you on how many pts they'll charge for the management? Wondering if they'll include the cleanings in the fee etc

25% for them + 3% for Airbnb fee, 12% for booking.com fee, etc. Cleaning is included in their fee (I believe they simply add a cleaning fee to each booking).
 

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,079
169,498
Utah

BradD

Bronze Contributor
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
225%
Oct 11, 2013
109
245
Ottawa
25% for them + 3% for Airbnb fee, 12% for booking.com fee, etc. Cleaning is included in their fee (I believe they simply add a cleaning fee to each booking).

Wonder how many services are going to be popping up to service the short term rental market/demand (Pillow is an example of a full service solution, they service a limited geography mainly in CA, charge ~15% and I believe that includes booking fees. Assume you may be able to push back a bit on the management fee

Am I reading this right? 40% in cumulative fees?

Think the Airbnb/Booking.com is an either or (i.e. they pass along the specific platform's fees to you), but ya for ex 28% fee on Airbnb (a bit steep/would have a definite impact on returns)
 

MTF

Never give up
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
455%
May 1, 2011
7,560
34,430
Am I reading this right? 40% in cumulative fees?

Nope. 25% is their fee for managing everything (it includes managing guests, cleaning, handyman services if needed, stuff like new towels, shampoos, soap, their profit, etc). 3% is an additional fee due to Airbnb's fee. 12% is in case of a booking through Booking.com. No additional fees if the booking comes from another source with no fee (like repeat guests, local ads, etc.).

Wonder how many services are going to be popping up to service the short term rental market/demand (Pillow is an example of a full service solution, they service a limited geography mainly in CA, charge ~15% and I believe that includes booking fees. Assume you may be able to push back a bit on the management fee

You need to compare what exactly they offer. I'm going to meet with them again tomorrow and get more details, but if I understood it properly they get 25%, but like I replied to MJ, it includes all managing costs. The only costs left for the owner are platform fees (Airbnb, Booking, etc.) and utilities. I'm going to get more accurate real-world calculations tomorrow, but even with their managing fees it's possible to get about 10% a year (average long-term rental yield in my area is around 4-5%). Sounds good to me as I'd rather get 10% and do no work than get 15% but have another business to run (or get 5% and more tenant risk).
 

e_fastlane

Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
96%
May 2, 2012
79
76
If you're an accredited investor (sounds like you should qualify) then aren't there a world of opportunities available?


You don't want to deal with renters (makes perfect sense), but could you just be the guy fronting a chunk of the cash for a group of investors? Seems like getting in on a big apartment complex with dedicated management staff would be pretty hands off, and a reasonable return. Certainly not risk free, but doesn't seem to require a full time energy commitment.


Just my $0.02 - I know F*ck all about managing a huge pile of cash. Just tossing out ideas.


I know nothing about accredited investing. I will put that on the "research" list. This seems like higher risk investing though? The only way I would want to do something higher risk is if I extensive research into who/what I am investing into.... a.k.a get a second job learning about what you're investing in?

I would definitely recommend looking into real estate as well. You only need to give up about 10% of the rent for property management costs to eliminate this worry entirely and make it almost completely passive. If there are maintenance problems they handle it all and all you do is write a check (which shouldn't be a problem since you have a big pile of cash).

Can you recommend a company or a place to look for trustworthy management companies? I will be moving houses soon and maybe instead of selling I’ll dip my toes into renting.

Have you looked into REITs? You get exposure in real estate without needing to worry about managing the stupid renters.


Another thing worth looking into are retail bonds / corporate bonds on the AIM (alternative investment market). You can borrow money to well establish brands like Vodafone, Tesco, B.T, HSBC, Lloyds Bank and get 5-8% return annually.


Advanced bonds search - London Stock Exchange

Judging off superficial research , these look like very possible options. Can you recommend a good website/forum/book to learn about these topics? It looks like relatively stable ways to at minimum win against inflation while keeping money relatively liquid.

I would second the index fund if you want a hands off, set and forget way to grow the extra capital. Reinvest dividends and send all your money there to be invested in the index.

………

Not assuming you have 10's of millions (if you do, rock on!) but the principle is the same. Focus on what you can control, how long you let the money "soak" and how much you add to the account each year....let the ROI cards of the market fall as they may year-to-year, but history shows that over an extended period and with yearly contributions you'll do very well.

I don’t have 10’s of millions but ready to invest low 7 figures. I know it might just be emotions clouding my judgment, but right now does not seem like a great time to start investing into stocks. You are absolutely right that the long term will make the 'right time' point moot.

I disagree. Time spent learning about investing can mean time dividends in later years. Your business(es) won't last forever.

You definitely make a good point that I can’t directly refute. However; It’s one of those “there is no better time than now” arguments that can be applied to everything. I only have 40 hours a week I can invest into working. The business I’m building (or money im making in it) already can possibly provide enough for the rest of my life, regardless of how long it lasts.

I don't want to make it seem like I'm some ultra busy suit. I'm not. But I'm also just doing exactly what I "want" to be doing (whether thats watching game of thrones, researching the next business decision, or sitting on the coach talking to my wife), which is what this money was supposed to afford me in the first place right? So 'working' more than those 40 hours is not an option at the current time. Making this post was the first step in trying to grow my interest in investing. Thats way I will ENJOY learning about it and will WANT to do it.

This is one area where I strongly recommend taking the time to learn. Everyone in this thread, financial advisors, internet bloggers, journalists, your friends and family will all have opinions and as you're clearly aware, a lot of that advice is bad. Some while good, can also be misguided, especially if you aren't looking for "average".


I am not from the US, but the following has served me well as largely "mindless" investments allowing my assets to grow while I build my business:

government bonds

index ETFs

REITS

On face value, this is what most people look at but years of travelling has helped me to see opportunities in other regions. I'm currently building up a foundation of assets, with this in place and hopefully by then accredited/sophisticated investor status, there will be more private/alternate investments open to me.


Thing is, even in the above everyone will debate with you about which bonds, which ETFs, which REITS, etc. Take a holiday from work at some stage and read some financial literature, or read some of the books summarized by Derek Sivers on investing.


Something to keep in mind being in the states is dividends/distributions - I believe you'll be taxed on them, so you'd want to be in funds that reinvest them rather than pay them out. Combined with investments that have a low or no management fee, those 2 tips alone may add up over a lifetime.

I agree. Thank you for the insight.

It surprised me that people are still OK with giving guys money that have absolutely no stake in the game. Finance guys should make or lose a set % based on your winnings or losses. Otherwise the system is broken and can never work for YOU, the client.

I'm in the same boat. In the last few months I've spent dozens, if not hundreds of hours reading about various investment ideas. Here are some of the things I've considered:

stock market investing focused on dividends - decided against it because I have zero control over it. Dividends can change, companies can go bankrupt, interest rates can influence returns, etc. Rents generally don't fluctuate that wildly (and since I'd be buying and holding the properties for a long time, I wouldn't care much about the fluctuations in the property's price anyway). Moreover, since I found stock market investing too complicated and time-consuming to be able to pick individual stocks, I'd have to focus on index investing. The dividend yield from the best low-cost funds is about 3-4%, and that's too low considering that even if I hire a property manager, I can get 6-7% in my area.

REITs - as above, can't control them and if you don't know how to properly research them, it'd be better to invest in a REIT ETF (that generates about 4%, so it's too low).

bonds and stuff like that - get low returns borrowing to broke governments. No thanks.

collectibles - returns can be incredible, but there's no cashflow so no, thanks.

In the end, I think I'll focus on rental properties and hire a property manager. Here's my reasoning:

if you buy at the right price and find a good long-term tenant, your returns are stable.

real estate protects you from inflation, and often appreciates beyond the inflation rate (though my focus is on cashflow, not capital appreciation).

it's very scalable, particularly if you hire a good property manager.

it's just a good retirement plan. Buy 10 or so good properties with cash and if your living costs are reasonable, you're set for life.

lower tax.

I'm going to take my time to figure it out and make sure it's the right path for me, but everything indicates that out of all the options I've considered, it's the best route for me.


Please keep us updated and let us know what you decided to do.

That’s a good take on the situation. Looks like more and more people are really pushing the rental properties with a manager idea. I just thought hiring a manager to take care of everything wipes away most of the profits. I don’t have actual experience in this, so obviously I was probably wrong.

I'm privy to municipal bonds which are tax-free, great if you're in the high income tax bracket.


Also many governments and municipalities have to operate at balanced budgets, unlike our printing press government.

Can you recommend a website/forum/book to learn more about getting started in picking good municipal bonds. Are we talking about a return big enough just to keep up with inflation, or very competitive returns?

Either one is a good proposition. I don't always want all my money in risky assets, but I definitely want to try and fight atleast against inflation.

As a couple people mentioned before, managed rental properties.


The largest time spend will be before & during the deal, but once you've bought it, especially with having a good property manager, it can be a great mix of high returns and little management.


I have only 3 of my 11 rental units managed for me, and even then I spend less than an hour per month thinking/focusing on my investments. If I had them all managed this would make this less of course. Also, returns of 10%+ ROI/ROE are not uncommon.

I am shocked that its 10%+ year after year, even after manager costs. I might have underestimated this investment vehicle.

REITs are a good option if you want something in real estate even more passive than managed rentals but it should be noted that owning and managing actual property has some additional benefits over REITs. With REITs you only get one growth component, which is how much the fund appreciates per year. If it's a dividend paying REIT then it's really two counting the dividend. But with real property you get:


1. The appreciation on the asset (house/apartment whatever)

2. Monthly income above your expenses if the property is cash flow positive (which it should be or you shouldn't buy it)

3. If you use any leverage, the principal component of an amortized loan paid down by the tenant is a monthly profit

4. You get extra tax advantages including the ability to depreciate the purchase price of the investment property and any improvements made to it and the mortgage interest deduction if you have any debt on the property


If you look at the total return combining all of these it can often be 20% or more depending on the amount of leverage used. The price you pay for this is that your investment is quite a bit less liquid than it is with a REIT which can be sold in a day if you need liquidity where it might take you months to sell a house or apartment.

You brought up a good point. Leverage. Do you guys buy many properties under leverage or just buy as many properties as you can afford in cash, to minimize interest costs.



Thank you guys for all the advice. I wasn’t expecting much but you guys really delivered. A lot of things for me to look into. It looks like there are a few good options for funds I want to keep close to liquid and funds that I don't mind locking into assets for the longer term.

I think some of the advice might not be right for me RIGHT NOW, but something that might be possible in the future. If my business stops, more full time investing is something I would seriously consider and many of these ideas are great.

I would really appreciate any recommendation on interesting books on the topic. I’m at square one. I don’t have the willingness to spend hours on forums and the internet doing research (which is what I usually do), but maybe a good book might get my interests peaked enough.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.
Last edited:

ace81385

Contributor
Read Fastlane!
Read Unscripted!
User Power
Value/Post Ratio
83%
May 6, 2015
40
33
I might change my thoughts about this. Just got back from a meeting with a local real estate agency that manages everything for you - from preparing the property for short-term rental to putting it up online (using their own accounts) to marketing it, managing bookings, cleaning, etc. As a passive investor you only put up the money and then cash checks (revenue sharing or a fixed amount). Might be exactly what I've been looking for.



As far as I know https://empireflippers.com/marketplace/ are also reputable.

This seems interesting, it seems that many of this business have pretty high valuations? I just get concerned whether you can trust what they are selling on these websites, of course one would need to do considerable due diligence before investing. Thanks for the information.
 

bitcoins

New Contributor
User Power
Value/Post Ratio
100%
May 28, 2017
16
16
USA
Lending was mentioned here. I know it's an entirely different world with new challenges that you might have to face, but if you know anything about cryptocurrency then there's an easy way to make good money through loans. Giving BTC for margin trading on Poloniex (or any of the other major exchanges) you could make up to 1% daily if you know where to look. For newbies, even .1% daily isn't too bad considering there's only the risk of the market going down or BTC crashing (but long term it doesn't matter anyways, which I think you'd be in for). Whether people make or lose money with margin trades, you still get your money back. And even if the exchange did crash from let's say a DDOS attack (like Polo has before), if you chose the right one you'd get your money back eventually due to repayments. But again, it's not for everyone. There's decent money to be made though.
 

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

Latest Posts

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top