Passive Income - The secret to long term financial security

[TPI]

Also worth highlighting that super or SMSFs are just investment structures, you can invest passive or actively in either.

Share trading is more an active pursuit as it involves buying and selling, unless you are doing something like writing covered calls or naked puts that don't reach their strike prices.

And I don't think online websites/blogs are the new way to generate a passive income!

 

[Bill M]

Re: Passive Income-----The secret to long term financial security

That's a 6.65% yield on a $430k purchase price.

What sort of capital growth will you get on this investment?

And how would it compare to buying shares or commercial property?

Thanks for asking. In 1985 a Sydney Taxi plate cost $78,000. Today they are selling for $430,000, someone else can do the math on that. A lot of my friends got into this and profited very well on cab plates. As for how it compares with other investments, again someone else can do the math on that.

Right now my best passive income investment is my rental unit on the Northern Beaches of Sydney. I pick up a nice tidy rental sum each and every Month and do absolutely nothing for it (except put in my tax return each year). In fact I haven't even looked at the property in 3 years now, that's passive.

 

[TPI]

Re: Passive Income-----The secret to long term financial security

Thanks for asking. In 1985 a Sydney Taxi plate cost $78,000. Today they are selling for $430,000, someone else can do the math on that. A lot of my friends got into this and profited very well on cab plates. As for how it compares with other investments, again someone else can do the math on that.

Right now my best passive income investment is my rental unit on the Northern Beaches of Sydney. I pick up a nice tidy rental sum each and every Month and do absolutely nothing for it (except put in my tax return each year). In fact I haven't even looked at the property in 3 years now, that's passive.

For $78000 to turn into $430000 over a 28 year period requires a 6.29% compound growth rate.

During this period the All Ordinaries Index grew from 1031.6 to 5394.4, so at a 6.09% compound growth rate (before fees).

So on this measure alone the taxi plate wins!

But, you would need to compare the total rent collected from the taxi plate (minus any "vacancy") over this period to the total grossed-up dividends from the shares accumulated over this period to see which was really the better investment.

I would think that dividends have the potential to grow much faster, but don't know enough about taxi plate lease growth rates to comment further.

But if I had $430,000 spare cash today I would probably put it into a few shares rather than a single taxi plate.

 

[Bill M]

Re: Passive Income-----The secret to long term financial security

But if I had $430,000 spare cash today I would probably put it into a few shares rather than a single taxi plate.

Me too