0 sats \ 5 replies \ @tomlaies 10 Feb \ parent \ on: How can one create passive income through one's bitcoin (profits)? Personal_Finance
Why not? There are plenty of families that have been relaxing for 3 generations due to owning companies, stocks, landlords
Anyone with a minimum of serious investment experience will tell you that's nuts. A return of 12.7% annually is unsustainable in the long run.
To own companies => not a passive income, because you need to involve in company decisions, make the good decision depending on the market / demography / changing laws / etc conditions. So it is not a passive income at all.
To own stocks => you also need to follow the market, the FED policy, the new technologies, whales, etc... => alsno not a 100% passive income.
To be a landlord: you have a lot of CAPEX cost (liming, wall painting, changing installations, etc)...these costs are around 10-15% from your profit. Plus, you have the risk that the chartere mooves out, and until you find the next (for this you also pay for a real estate agent) you will have a loss of income.
In plus...all of these previous 3 needs a major investment ;)
About your affirmation "return of 12.7% annually is unsustainable in the long run" I think it is really sustainable. Not 100% passivelly, but it is sustainable long term.
BUT...as I said in my previous comment....these are just my personal opinions, based on my past experriences.
Hope you don't hate me, because I don't agree with you 100% :)
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It's a good point, that what counts as "passive" income is pretty complex. How much is a person willing to do? My friend "passively" makes a nice income with rental properties, but kills himself with the maintenance, responding to issues, etc.
Even the most passive of the passive things are active someplace, even if it's regulatory capture or something weird and indirect.
EDIT: should have read further, @kr already made this point.
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To own companies => not a passive income, because you need to involve in company decisions
Just own shares and relax. (Edit: i a bitcoin context this would even apply to EVERYBODY. Everything or all of the world GDP divided by 21 million.)
About your affirmation "return of 12.7% annually is unsustainable in the long run" I think it is really sustainable. Not 100% passivelly, but it is sustainable long term.
We can argue about the first point but you're unambiguously wrong on this one. The trinity study is one of the most fundamental works in the science of economics and talks about 4%. For economists even 4% is highly controversial. Your 12,7% are so far out of the question.
Hope you don't hate me, because I don't agree with you 100% :)
Nah. As I said, we can discuss what "passive" means. Fun little discussion. But I won't let the 1% monthly return slip. That's actually dangerous advice to people - especially if someone was to actually plan to retire on this math.
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If you talk about the 4% yearly income, based on your investment as net profit, AND in NPV (Net Present Value)...maybe I can agree partially...
But if you talk just simple as 4% income... => you're in loss, because of inflation (which is bigger than 4$)...I talk about the REAL inflation, not about the FED "math" ;)
I will tell you an example: here, in my city (it is almost the most expensive city in Romania) you can buy a block house of ~70 square meter for around 100k euro, and you can rent it for ~700 euro / month. This is also much more than 4% yearly income...but if we take in consideration the additional costs, a part of this income will evaporate (issues, government taxes, real estate agent, etc)...