In early 2012, I made it a goal to try and achieve $200,000 a year in passive income by 2H 2015. The idea was to somehow make a large enough sum of money to comfortably provide for a family of three or four in Honolulu or San Francisco. With $200,000 a year, I wouldn’t have to go back to work ever again. Instead, I’d rest easy working on building Financial Samurai into a lifestyle business.
Creating a lifestyle business has always been a dream of mine because it helps mix entrepreneurial passion with the ultimate end goal: living a better life. Killing myself for the next 10 years to try to make something huge in order to live a nice life sounds a little backwards. Why not live a nice life now?
Growing passive to semi-passive income from ~$78,000 in 2012 to $200,000 is a daunting task, especially given our low interest rate environment. But when we write out our goals, I firmly believe we’ll figure out ways to eventually get there. Let’s see if I made it or not!
2016 PASSIVE INCOME UPDATE
I’m sorry to say that I’ve failed at achieving my $200,000 a year passive income goal by 2H2015. If I stayed at my banking job, I would have earned a lot more money and hit my target by now. However, I took a risk and left a steady paycheck to just live off of the then $78,000 a year in passive income and the uninspiring money I made online.
But looking back, I am absolutely ecstatic that I decided to start my own website in 2009 because my online income has now far surpassed my passive income that has taken over 15 years to build! But making money online is a topic for another time.
Here’s my latest passive income for 2016.
It helps to write your goals out to keep focused
I use Personal Capital’s free financial tools app to track my 32+ financial accounts. If I didn’t, I’d go crazy and miss things. It’s like having a grocery list to keep track of what to buy and not having a grocery list for a party. The former is much better.
CD Interest Income
CD interest income is down to roughly $19,920 from $21,000 a year ago because I cashed out one CD and used the proceeds to pay down debt and buy another property. Two CDs expire in 2017 with an interest rate of 4%, and one CD expires in 2018 with an interest rate at 2.6%. In retrospect, locking up money in a 5-year CD at only 2.6% was a poor financial move. But, I’m happy to invest money at a 4% risk-free rate all day long. Please read: Should I Buy CDs In A Stock Market Correction?
Despite having a hefty amount in CDs, I’m still aiming to maintain a $100,000 liquid savings account earning just 1% for future investment and insurance purposes. Opportunities always come up, and I want to be prepared to deploy $20,000 – $50,000 slugs at a time without penalty.
One of three CDs providing $1,000+ in guaranteed income a month
Dividend Income
Dividend income has risen to $24,912 a year from $21,360 the year prior. The main reason is because my portfolios have all grown due to performance and contribution. I’m also building up my muni bond and bond positions after they sold off in 2015. 2016 is a rock year in the stock market, and I want to focus more on stability.
My investments are still very growth oriented because I’m looking for hopefully faster capital appreciation. For example, stocks I own like Netflix and Tesla don’t pay any dividends. If I wanted to optimize my portfolio for income, I could probably earn $45,000 – $55,000 a year in dividends. But as someone who is still relatively young at 38, with other income sources to pay the bills, I’m willing to take more investment risk.
Once you accumulate a large enough nut, then go heavily into dividends if you need the cashflow.
Real Estate Income
The real estate category is where I’ve made some good strides. Total estimated annual income rises to $100,322 from $88,332 due to three main factors: 1) I increased the rent of my single family house (Rental Property 1) after spending about a month trying to find new tenants after my old tenants decided to cut the lease short by 1.5 months. It was a PITA but I was effectively able to raise the rent from $8,700 to $9,200 a month and keep my 100% occupancy record for 10 years in a row on two properties in SF.
Rental Property 2 mortgage paid off in 2015
2) The second action was finally paying off my condo rental property mortgage (Rental Property 2). The monthly PMI mortgage was $1,308, $200 of which was principal. I also increased the rent by $200 to $3,950 after two years of keeping rent steady at $3,750. The master tenant is fine. She just hasn’t been able to hold down a roommate for longer than a year, which has caused a lot more work and fines. This property could easily rent out for $4,300 – $4,500 in today’s market. As a result, if there is another roommate turnover, I will be raising the rent when her year lease is up in June to $4,300 instead of $4,050 as I was originally thinking. I may even consider selling the property next year to simplify life.
Finally, my Lake Tahoe vacation rental is slowly recovering due to the rising Bay Area population and strength in tech and internet. There are over 100,000 more employed people in the Bay Area than five years ago. Napa Valley and Lake Tahoe are like the Hamptons of New York, and money eventually finds its way here when disposable income increases. El Nino has finally arrived, bringing with it record snowfall in 2016 so far.
Other Income
Other income will improve to roughly $30,000 from $19,876 mainly due to an investment in a new Venture Debt fund, slight growth in my severance negotiation book sales, investing more money into P2P lending with Prosper.
The biggest opportunity to create more value is through my severance negotiation book. I’ve updated How To Engineer Your Layoff to a second edition with 50 more pages (50% larger). I’m also experimenting with price, raising it from $48 to $55, $65, $75, and $85 to test out elasticity of demand. Currently, the book is now priced at $85 with a $10 holiday discount. It has seen no drop off in demand so far. The lesson learned is to always test, test, test.
The book has resulted in more than a dozen 1X1 layoff consultations at $500 for 1.5 hours. I’m pleased to say that every single client walked away with at least $10,000 in severance. One walked away with over $500,000.
I’ve committed $94,000 in a friend’s Venture Debt fund so far, with another $56,000 in capital contribution within the next 12 months. The preferential interest is 9%, hence $94,000 X 9% = $8,460 a year in interest income. My Venture Debt investment is unproven, so this income stream is not as certain as my other income streams. The real returns should be closer to 12% a year, but we shall see.
I’m going to start contributing $10,000 every six months into my after tax portfolio. They’ve got a great feature where you can automatically contribute to your portfolio every month just like your 401k. They’ll buy your positions based on existing weightings for you. The first six months was a test to see how things would work out. So far, so good spending $9.95 building 30 positions and watching them outperform the market with a year-to-July 16 performance of ~5%. I do everything in baby steps.
Post mid-year rebalance, which is why the cost basis doesn’t say $10,000. Main move is increasing weighting in Muni Bonds to 20% to get a little more defensive
Finally, it’s been close to three years since I first started investing in Prosper. My performance investing in the most conservative loans is a 7.41% annual return, which is great. As a result, I also plan to invest another $10,000 every six months into Prosper, starting now. I finally feel very comfortable with P2P lending after learning about the sector for the past six years. In a rising interest rate environment, you want to be a lender of money, not a borrower. As a result, Prosper is also one of the biggest money making opportunities for 2016.
Prosper three year annualized performance. Little volatility, steady gains.
WHAT ABOUT ONLINE INCOME?
Online income is not passive, which is why I don’t include online income in my annual passive income reports. It takes a long time to write articles, test out products, highlight products in a value-added way, negotiate deals, and maintain the site.
If I wanted to cheat, I guess I could include 50-75% of my online income as passive income since 71% – 75% of my traffic comes from search engines. I also did a calculation that 1% of all posts on Financial Samurai generates 32% of all traffic. But what’s the fun in cheating? Besides, search engine traffic is out of my control and my traffic would probably decline beyond the 75% if I stopped writing. It’s much better to keep online income separate from passive income so I can better optimize both.
It’s true that my online income can provide a comfortable lifestyle for a family of four here in San Francisco. However, I’ve been writing three to four posts a week for the past seven years now. Heck, I even spent 25 hours being an Uber driver in order to write a first-hand account of the ridesharing economy! Not even Uber employees are willing to be Uber drivers! That is some serious due diligence for an article that may never generate much income at all.
If you have an idea for a site, definitely register one online and start (step-by-step tutorial). It costs less than $4 a month to host and it’s easy to link up your WordPress.org account. I never imagined starting a site would enable me to break free from Corporate America after only two and a half years. At the very least, build your brand online by registering your name. Why should only LinkedIn, FB, Twitter benefit from you? Control your own destiny. With an online platform, you can get consulting opportunities like I’ve gotten that pay more than $200,000 a year combined. Your online platform can also sell products you’ve created, or make your advertising income. The possibilities are endless!
CLOSE, BUT NO CIGAR
Despite taking a lot of actionable steps to improve my passive income, I’m still $25,000 a year short of my goal. With the risk-free rate at close to 2.5%, I need another $1,000,000 in capital to make up for the short fall if I’m to stay conservative.
If I didn’t challenge myself to the $200,000 a year goal by 2H2015, I’m not sure I would have even broken $120,000 a year by now. I’d probably buy a fancy car or blow myself up by actively day trading the stock market like I used to. Now that my online income has grown, I’m confident the $200,000 a year goal can be met by the end of 2017.
The whole goal for building passive income streams is to give yourself optionality. There will inevitably be a day when you no longer want to do your job. If you can build your passive income streams while you are still enthusiastic about work, you might be able to time the fade perfectly.
There’s an old Chinese saying, “If the direction is correct, sooner or later you will get there.” It’s time to get started already!
PASSIVE INCOME RECAP
1) Write out your goals and start building passive income now. In 10 years, you won’t regret the actions you take today.
2) Invest in what you know, but also consider diversifying your passive income streams. Having 100% of your net worth in dividend stocks or 100% of your net worth in rental properties could pose problems in the future.
3) Your risk-free money shouldn’t just sit in a savings account. Treasury bonds and CDs are your best alternatives. At the same time, keep six months of living expenses liquid just in case of an emergency or a salivating investment opportunity.
4) Every investment has an opportunity cost. Therefore, the ultimate way to generating more passive income is to produce more products. You’re going from nothing to something. The internet makes things so much easier to sell nowadays, which is why you should launch your own website. Once you have your own platform online, you can leverage it to find new consulting gigs, brand yourself online, find new work, sell products, and make advertising revenue. There are three billion people online today.
5) Keep your passive to semi-passive income separate from your day job income, one-off investment gains, or business income. You will grow your respective incomes much faster this way.
Updated 2019: I’m strongly focused on building passive income through real estate crowdsourcing platform, RealtyShares. Unfortunately, RealtyShares is no longer accepting new investors on their platform. I suggest taking a look at Fundrise, the pioneer in eREITs. They are also currently working on an Opportunity Fund to take advantage of tax-efficient Opportunity Zones. Fundrise was founded in 2012 and is open to all investors – accredited and non-accredited alike.
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[…] view my performance and to re-invest cash that has come in from borrower payments. Per my latest passive income update, the annualized return of all of the notes in my portfolio is 7.41%. Not […]
Hello all, i am saving about 20% of my six figure income towards retirement. My wife and I are maxing out our 401ks. We are very grateful for excessive monthly cash flow (from work) and cash reserves. Would like to start investing in some passive income, but don’t know where to start… Have a year of emergency funds in a “high yield” checking account. Started dabbling in P2P. Have about 20k in car debt and student loans (which I could pay off). Where do I start? Very broad question, but any insight would be helpful.
I was wondering if you could provide more detail on the real estate, as this seems to be never detailed whenever folks talk about real estate, so I’m always left wondering.
For real estate, what basis do you use for, say, asset allocation. Gross value, gross equity (value minus debt), or net equity (value minus debt minus liquidation costs)?
For real estate “income,” are you measuring rents, rents minus expenses (including interest), or rents minus expenses (including interest) minus principal too?
I’d like to hear the basis for asset allocation answer too. And what about real estate income – are you factoring out maintenance and potential vacancy? Are you adding back in principal pay down, tax savings, or annualized appreciation?
How are you getting 1% on liquid savings? I think my high yield savings generates 0.10%
Thanks
There are a lot of online savings accounts that offer 0.75% to 1.1%. Check out Capital One 360 Savings.
Interesting…I’ve been with Schwab for a while because of no ATM fees on checking and came over years ago because of better savings yield. Looks like Everbank handily beats them in these respective areas. I need to look into discontinuing my banking portion with them.
Do you recommend a brokerage firm? To hold stocks, index funds, etfs, etc.
How did you find my site to begin with? Always curious to know.
I really like building my own portfolio with Motif Investing because you can build a 30-position portfolio for $9.95, and rebalance all 30 positions for $9.95. The first trades are free too. I like them so much that I decided to consult with them on the content marketing initiative since December 2014. They have the most disruptive fintech idea imo.
I also like Wealthfront for most people who are happy to have an algorithmic advisor run their money. They charge 0% for the first $10,000 and only 0.25% for every $1 over $10,000. In the long run, it’s all about time in the market, and having the proper asset allocation.
I used to trade with CS, but it’s just too expensive.
Yeah, I just went through that realization myself about Schwab, and moved the bulk of my cash to Synchrony. (See bankrate.com) However, I’m moving a lot back out to pay down various rental mortgages. Better to reduce ~3.125% debt than to save at a taxable ~1.1%. I have a ton of PALCOs, too, so better to tap into RE income.
My general plan (at the moment…) is to only invest in equities in my IRA and 401k, save my emergency cash in Synchrony, have a 0 balance HELCO on standby, and put all excess cash to pay down rental mortgages.
How are you getting 1% on your 100k in liquid savings? I think I am getting 0.1% in my high yield savings.
“Despite having a hefty amount in CDs, I’m still aiming to maintain a $100,000 liquid savings account earning just 1% for future investment and insurance purposes. Opportunities always come up, and I want to be prepared to deploy $20,000 – $50,000 slugs at a time without penalty.” – See more at: https://www.financialsamurai.com/earn-passive-income-for-financial-freedom-today/#sthash.t2slS2nE.dpuf
Awesome detailed report on your many sources of passive income. Looks like you have tapped all the major categories for maintaining passive income streams. For now my focus is just on dividend income but I am open to P2P lending and possibly writing options as well. Would be nice to see your detailed stock portfolio besides the Motif. Thanks for sharing.
Sam,
Amazing..that’s all I have to say. Just because you didn’t hit your goal doesn’t mean it was a failure. As you said, the goal pushed you to get to where you are today, so without pushing yourself you would be further in the hole.
I love how diversified your income stream is. As you said, it probably isn’t a great idea to only receive income from dividend stocks. We are starting to diversify with revenue from our website which is great, but we have yet to dabble into real estate or some of the other streams you mentioned in your article. This is all one fun journey though, so you have to start somewhere. Hopefully we are able to produce an ambitious goal for our business such as yours that will send us to new heights.
And as we discussed on our website, we would never complain about more frequent progress reports haha Keep up the amazing work and keep on inspiring others like us to dig deep and relentlessly pursue financial freedom.
Have a great weekend.
Bert, One of the Dividend Diplomats
Hi Bert,
Nice job with the start of diversification! I didn’t realize there was such a big dividend investing niche. Why do you think that is? I’m more of a growth investor for principal appreciation myself, but I do so the obvious benefits of dividend investing.
Maybe I’ll start updating my passive income and dividend portfolio twice a year instead.
Cheers
Sam – this is both impressive and inspiring.
It’s helpful for folks like me to ‘look at the grown-ups’ and see what is possible. It helps with goals setting too, for something that is both challenging but realistic.
One question though: if Prosper provides such good returns, at 7%, does it make sense to keep investing in Motif or the stock market in these times of low interest?
Hey, there. I’m fairly new to your website but enjoy the content and your matter-of-fact style of writing. I work in real estate investment (invest on behalf of family offices and high net worth investors), and it recently occurred to me that while you invest in P2P lending, you haven’t invested with real estate crowdfunding sites which claim to yield better returns than the ~7% you’ve achieved via P2P. I’m wondering if this is due to your current exposure to real estate via direct investment or whether you’ve had a bad experience. Do you know others that have invested with these RE crowdfunding sites and whether there’s substance there? Any perspective would be great.
Hi Jessica,
Welcome to my site! Feel free to subscribe via the top buttons on the right.
I’ve got about 40% of my net worth in direct real estate investments in SF, Lake Tahie and Honolulu already, hence, I don’t want any more RE exposure.
I recently paid off one of my mortgages and want to grow my other assets so RE becomes no more than 25% of net worth.
Check this post out: https://www.financialsamurai.com/recommended-net-worth-allocation-mix-by-age-and-work-experience/
Regarding the quote about Uber driver “‘bot even wanting to drive for Uber’
Classification: Uber Employees are not allowed to drive for Uber. There’s that fine line between employee and contractor, and the company does not want to blur it, so it became company policy to not allow it.
Source: interviewed with Uber and asked how many of them have actually driven for Uber – received this response.
Sam,
Do you have any posts on how to go about selecting a income property to buy ? What’s the most important aspect cash flow, capital appreciation etc.? I know it’s the right thing to do but I have always been hesitant to invest in an income property because I am not sure on how to go about selecting one.
Sid
Sid,
Check out these posts:
How To Properly Analyze And Value Rental Property
What Type Of Investment Property Should I Buy? SFH, Condo, or Multi-Unit?
It takes a lot to get $200K in passive income. I manage my rentals myself, and that helps, but it is not passive. I like the idea of $200K, I am about as close as you are, just slightly more active (although taxed as passive).
Sam, considering we live in a “sue everyone” society how are you handling your rental properties?
Do you have a large umbrella policy or do you have your rental properties in individual LLCs?
Hi John,
An umbrella policy is a must. I have one, and so should anybody else who plans to build wealth over time.
I’ve also spend a lot of time research and developing as strong of a rental lease as possible. Here is a sample lease that I’ve published on my site.
Finally, I do own an S-Corp, but I have not structured it as a conglomerate like Alphabet, and Google, yet. Maybe one day.
How about you. What do you do to protect yourself from liability?
Sam
Thanks Sam. I do not have any rental properties yet. Considering building an in-law unit in my backyard to rent. I have an umbrella policy based on limits prescribed in your blog post :-)
Hey Sam,
Congrats on your progress and thank you for sharing. Have you looked at all at condor, iron condor, or iron butterfly option strategies for semi passive, non market correlated cash generation? After moving through learning periods and subsequent investment in stock, bonds, real estate and P2P and I am experimenting with a small allocation of portfolio and would be curious to hear your thoughts.
Best.
I have not. But Crouching Tiger, Praying Mantis, and Bear Claws, yes!
I’m a real estate investor in Seattle and stumbled across your website while writing an article comparing stock investing and real estate investing. I find your site extremely useful with a ton of great content. In addition, we are the same age with identical financial goals.
I have a few questions:
1. What is your lifetime earnings to date? Your income stream from CDs alone implies a pretty substantial principal invested. You either had a high income, or low burn rate, or combination of both.. Regardless, very well done!
2. I’d love to see more details around how you’ve grown your income over time. For instance, how did your income change from ’01 to ’02 to ’03, etc. Just the rough numbers if they’re available.
3. I was a software developer for 8 years before getting my MBA at MIT. I’m now working in sales which pays the bills but commission checks are spotty. In addition my quant skills are hardly used (if at all). I’m thinking about switching careers into finance but sounds like this might be a rough career path. What are your thoughts around this?
Welcome to my site!
If you can get a job in banking or private equity or at a hedge fund, I’d take it. The pay really is pretty good for what the job is. A third year VP can easily make $500,000 for example.
See these two posts for more: https://www.financialsamurai.com/the-first-million-might-be-the-easiest-how-to-become-a-millionaire-by-30/
https://www.financialsamurai.com/the-rise-of-stealth-wealth-guide-to-staying-invisible-from-society-rage/
How about yourself? What is your current income and net worth?
Awesome posts, now I can see the path to riches :)
My net worth after graduating business school in 2011 was actually negative due to the loans I took out. But since we were always interested in real estate, my wife and I decided to take the plunge and purchase rental property. So in 2012 we bought our first rental, then a couple more in 2013 and then more in 2014. Looking back, that we couldn’t have timed the market better! The appreciation from the properties alone has pushed my wife and I over the $1m net worth (as of a few months ago). We plan to keep investing in real estate throughout the Seattle area simply because we believe it will become the next San Francisco (most of the major silicon valley tech companies are opening satellite offices here, and a lot of the larger tech companies are hiring like crazy).
We are also long term investors looking for passive income. What I enjoy about your site is the idea of making your money work for you, which is exactly the position we want to be in 5 to 10 years from now. Great posts and keep up the awesome work!
Btw, I travel to San Francisco a lot for business and would love to meet up. I did a stint as a driver with Uber here in Seattle and almost turned it into a full time business by hiring other cars/drivers. I’ve got other business ideas and would love to run them by you! Beavers and Bears working together. Imagine that!
Most excellent timing on your part! In 2012, I was busy getting laid off, so I couldn’t buy a house :)
But I did buy a pretty neat little fixer with panoramic oceans views on two levels in early 2014 that has so far done well. I’ve been busy building a master bathroom and creating a sanctuary to add value.
Building passive income takes a lot of time given how low interest rates are. But, if one keeps at it over the next 10 years, the money will become meaningful. Speaking of Uber, I just wrote a post entitled, “How To Make $100 / Hour Driving For Uber“. Not sure if you saw that. But, the key is developing a platform!
Go Bears!
So, more than 1/3 of you monthly passive income comes from a single rental property?
If it burned to the ground tonight, what would be the consequences to your lifestyle & net worth (would your insurance cover _all_ expenses to rebuild)?
Having nearly 60% of your passive income dependent on personally-held real estate seems a risky strategy.
I wish this property that is now debt free was 1/3rd my total passive income. Unfortunately, I’ve got to pay property taxes, maintenance, and HOA. Hence, the percentage is closer to 22% before the write backs for tax benefits.
Now you know why I’m shooting for $200,000 in passive income, so that if this property burns to the ground and I can only collect ~$600,000 from the insurance co, instead of the $1-1.2M in market value, I’ll be able to survive off $170,000 in passive income and the $600,00 in insurance co proceeds.
This is also the reason why I’m trying to raise as much cash as possible, and build my business, which luckily is more than my current passive income after six years of work. I’m not delusional to the point where I think any of this will last indefinitely.
Looks like you have a lot of experience with property and other passive investments. Can you share what types of investments you have accumulated and how much you’re currently generating? What tips would you have for me to help minimize risk and maximize exposure? How old are you any how? Thanks!
Here’s my passive income post for you to critique. https://www.financialsamurai.com/earn-passive-income-for-financial-freedom-today/
Hi Sam,
I’m 25 years old, living in LA/OC and haven’t graduated from college yet. I am planning on going to grad school and do something similar like a residency that will take 2 years to complete; a total of 3 years when I will be done and be able to work in my professional field. I would like to retire comfortably around the age of 60, even earlier if I can. I have over $10,000 saved up and can save around $10,000/year (I recently started saving less than a year ago). I don’t have to worry about rent or mortgage because I live at my parent’s property for free. My mom also told me she will take care of grad school funds but will not be able to work for those 2 years (I will have around $17,000 saved up by then). I’ve been a reader on and off for a couple of months now (I recently signed up for your newsletter so hopefully be on here more!) and was wondering if you can help me jumpstart my retirement plan? I am fearful that I will not have enough funds to retire comfortably and would like to built a passive income like you; however, I don’t know where to start! I’ve looked into P2P lending, put options, and Roth IRA. I don’t know where to start! Eventually, I will like to invest in real estate.
Also, I was wondering how much did you initially invest in your CDs? Because from my understanding, interest rates are extremely low.
I would appreciate any feedback to jumpstart my passive income/retirement plan!
Thanks!
Jenny
Hi Jenny,
I invested in CDs when rates were higher. As they come due, I plan on reinvesting the proceeds. One is via Prosper, where I’ve been getting 7.4% a year for three years. If I knew that, I would have invested much more in Prosper. See: Prosper Performance Review.
The second is real estate, where I bought a fixer in 2014, and rented out my old house.
The other angle you can start is building up a dividend fund. You can buy dividend ETFs like VYM or DVY, which are low cost, and follow the markets. I’m using Motif Investing for all my non 401k investments b/c it only costs $9.95 to build a 30 position portfolio, and $4.95 for single stock trades. See: Motif Investing Review.
Good job thinking about this stuff now! Consider finding employment first to earn and save. If you can find an employer who can pay for your grad tuition, even better. That is what I did, and that really boosted my wealth accumulation.
S
So I am thinking about buying a 9 unit vacation rental property in Michigan. The property is for sale for 625000 and I know the seller so if we broker the deal with no realtors we could probably end up getting it for $600,000. Its currently yielding about 125,000 Gross and NET 70,000 in income (after they put new roofs on the cottages last year) . I reviewed the tax returns and business p&l so I’m pretty confident in it. Its currently yielding about 12% NOI. Which I think is amazing. What are your thoughts? Its managed via a paid property manager and is also set up with a website and vrbo listings. Family oriented Memorial Day through Labor Day. I’d love to hear what you think? I’m 31, Married, and a Baby on the Way. Can it be done? I’d like to be at $200,000 in semi-passive income by 2020. Currently we have about $300,000 in retirement savings between my wife and I. We also have about $150,000 in equity in our house. Our household income is right around $175000. Tell me what you think about this investment?
Thanks.
Noah
Sounds so amazing that I question why the seller is selling? What is their answer?
I have a question regarding the passive income generated from the P2P investment.
1. Is the passive income interest or does it include the principal being paid back?
2. I’m assuming you re-invest all the principal and interest to make the account grow, will you continue to do so when are ready to retire?
Hi Mark,
1) Just interest
2) I do reinvest it all. Yes, I will continue to reinvest when I retire. I was retired from 2012-2013 for two years, and all I did was save and reinvest. It’s just habit. But it’s fun too!
S
Man, 4% on that hefty CD is wonderful! Do you have a post somewhere outlining your dividend portfolio? Also equally impressive.
You’re only 4 years older than me and you’re killing it Sam. I hate hindsight!
Hi Ken,
Thanks. Why do you hate hindsight? It’ll just eat you up! In hindsight, I should have dumped the CD portfolio in the market and I would have made more! :) But, I do like earning 4% a year risk-free. It feels GREAT.
I haven’t outlined my dividend portfolio. But maybe soon. I have highlighted my Motif Investing portfolio here.
S
I remember in our taxicab ride to the airport from FinCon last year you said to me “what if I told you that writing 3 articles a week for 3 years straight would get you $60,000 in annual income by the 3rd year”
I told you I wouldn’t do it. I had a newborn and a 2 year old and was recently promoted, so I didn’t need the money and didn’t have the time.
But having spent about a year avoiding my blog, my brand and the potential of online income, I now know that I wish I would have heeded your advice. Obviously you’re a samurai grand master at keeping your money working for you and not wasting it, I should have known you know what the hell you are talking about :)
I’m looking to take that advice now, and really start to build something I enjoy, though I do make more than enough at my day job now. It’s just not as fun as building a true challenge and accomplishing something rare, like your goal of $200k/year passive income.
Thanks again for the inspiration.
Hey Jacob!
I remember that cab ride too! Crazy how time flies so quickly yeah? But also pretty amazing how much one can accomplish in that same time period as well. I would much rather take care of and spend time with a newborn and 2 year old. Family is #1!
Best, Sam
I have yet to meet anyone who makes $300K+ and works 30 hr weeks. I’d rather work part-time for less pay to see my kids grow up. But then again, I don’t go around asking what people make.
Guess you’ve met your first! They are no different than anybody else, except they hustled A LOT to get there in the beginning.
Check out: Are You Too Proud To Be Rich? When Uber Drivers Make $300,000+ A Year
Regarding investing in a vacation home in Lake Tahoe, would you recommend investing in a 1 bedroom condo in Squaw valley resort?
Assuming I put down 25%, would this rental be cash flow positive?
I already 2 rental properties but would love to own a vacation home closer to where I live.
Tahoe still has not caught up and is still below the 2006-2007 time period peak. Hence, if you love Tahoe, and are ok at managing, it could be a good idea.
I bought tahoe for lifestyle b/c I planned to be there 2-3 months a year.
Congratulations on your success! You have made so much progress during the period you referenced. I hope you appreciate your progress. I’ll be happy to see where you will be next year!