Some things that occurred to me and I thought worth sharing…
Passive Income
- An average income of 2% pa;
- That historically has grown by about 6% pa;
- With the value of the investment growing by about 10% pa on average.
Both income and capital have grown way more than inflation, on average. We have 90 years of data to back these claims up.
But there’s more:
- Running costs can be minimal – less than 0.25% pa;
- There are no maintenance or storage costs – it looks after itself;
- Your investment can be virtually tax free – just needs a little planning:
- You can get your money back at almost a moment’s notice.
What’s not to like?
Great returns achieved cheaply and easily – how much more “passive” do you want it?!
The eagle eyed will spot that the above stats are from the S&P 500, a collection of 500 of the most successful global companies.
Why do the adverts offering “passive income” never mention simple index investing when it comes to “passive income”?
N.B. past performance is not a guide to future returns and that the value and price of units/investments could fall as well as rise.
Trying It Out
Do you ever get that thing where you’re a bit stuck – in thoughts or actions?
And you want to try something different but you’re not sure about it?
Probably because it feels a bit out there compared to comfortable, albeit not ideal, situation you find yourself in.
My “trick” is to try the new thing for a week or two and see how it works out.
I comfort myself that I can always go back to the old way if it doesn’t work out.
The funny thing is I can’t remember ever going back to the old thing.
As Marianne Williamson said: “It’s easier to act your way to a new way of thinking than it is to think your way to a new way of acting.”