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bolido_sentimental  1yr ago (text post)   3349 thread views

Small-Scale Question Sunday for December 25, 2022

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Day trading isn't passive income, it's capital risk that you actively manage every day in the hope that you'll do better than an index fund. Real passive income would be something like buying the rights to a Christmas pop hit. You could then transform that to active income if you started promoting the record to induce more licensing and increased royalties, and hopefully the improved return would be worth more than if you spent the same time working more hours at your regular job.

Alternatively you could go for speculation (buy and hold assets), management (buy and rent out assets), gambling (stake capital on a binary outcome), banking (loan capital and charge interest, or trade capital for collateral), or bootstrap investing (create a business). There's very little that qualifies as truly passive.

It's corny but if you're a complete beginner try out Rich Dad Poor Dad for a basic introduction to financial literacy and avoid any memes about day trading, options, crypto and forex. It's probably a bit out of date now and not without its critics but it's a decent primer for further reading. MrMoneyMustache is (was?) the blogging era's inheritor of Rich Dad's paperback popularity but he always seemed to have at least as strong a focus on cutting costs against increasing income. Of course both of them could be said to have made a lot their money from writing, which is simply another bootstrap.

The point I'm getting at is that the stock market isn't the only option for passive income, and depending how you approach it it isn't even passive. But really what is?

I highly recommend reading through John Reed's criticism of Rich Dad Poor Dad.

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