I don't talk about finances much anymore, which is probably a good thing for my finances, because the times I care the most are when the stock market is dropping and my net worth is dropping by the day, exemplified by stretches in late 2018 (tech downturn), early 2020 (beginning of Covid), and almost all of 2022 (fears of inflation which might lead to a recession). Almost miraculously, though, Fed Chair Jay Powell flattened the inflation curve (something we didn't do that successfully vs. the Covid curve) AND avoided dipping the economy into a recession, and the stock market has been in full-on rally mode since the beginning of 2023. Hindsight is always 20/20, but the best time to have bought stocks was at the end of 2022, like a New Year's Resolution, after a whole year of brutal losses when I'd sworn off almost all stocksand started buying government bonds and supposedly "safe stocks" that weren't that risky; that's when it was time to go all-in and bet it all on something. For example, 2 years ago right around this time Nvidia, the darling of everyone's stock portfolio now, was at 112.......and today it traded up to around 120. A slight gain, right? No, that's AFTER it had a 10:1 stock split, so it's the equivalent of going up form 11.2 dollars to 120 now, a more than 1000% gain. Fortunes could have been made.
And that's the story of my passive income in a nutshell: certain months and years when I've passively losing income, where every day I feel like I'm losing money while just sitting doing nothing and panicking, whereas the good times (most of the times) I don't even think about it because I feel safe, the wind's at my back, and nothing can stock the bull market, and I'm very very passive about my portfolio. And that's really what passive income should do, you don't have to actively manage it and can worry about other stuff, like "active" income. Most of the income I've ever made has still been active income, sometimes too active; I feel like I get a little too bogged down by it and fail to enjoy my life enough (or as MJ says, pay attention more to MJ). I also would like to increase my sources of passive income, not just stocks, which are nice and all but haven't delved into the world of real estate passive income, becoming a landlord or selling houses for twice the value I bought them at, which is what my homeowner friends are experiencing in LA all the time: hey my home value doubled after 2 years. Yay for us! I'm not sure that it's all "passive" though: obviously less maintenance than owning a restaurant or hotel or something (sometimes I wonder if those are the most "active" income ever because you have to put your whole soul into it, like marrying a restaurant because you're stuck with it forever....or until bankruptcy) and owning a house is also putting a lot into that investment, like paying property taxes, making repairs, putting in new air conditioning every few years, condo assocation fees. And it's not fun....scrubbing the shower floor is not fun, applying a new coat of paint in one's home is not fun (for me, at least..... I could see how others could enjoy that). Clicking "buy" on one's Etrade screen is fun and checking the golden eggs a few weeks later to see how they've grown is fun. There are no hidden costs (maybe a little of a commission if you buy a mutual fund and even some exchange traded funds) or at least any physical work needing to be....it is by very definition passive income. There's nothing like the feeling of getting a notification every couple months that "Etrade has posted a distribution.... UNH dividend." (maybe bad example, United Health has a measly 1.46% yield, Abbvie posts a much more impressive 3.24%) they're literally paying you to own the stock.... not a bad feeling after being squeezed for every nickle and dime by contractors, repairmen, the city from taxes, etc. as if you're sitting on a pile of good and you're renting the land you have your house on.
I may have convinced myself through this post NOT to expand into real estate as another source of passive income. Maybe ask me next time the stock market goes into a bear market; I might sing a different tune then.
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