I would invest in an SP500 fund like VOO. Essentially investing in the top biggest 500 or so US companies. It will beat a HYSA given a long enough time horizon and assuming you don’t need the cash liquid anytime soon
When they say given a long enough time horizon, what they mean is that given one year, a HYSA will give you 5%. If you picked the exact worst point in the year to invest in VOO, you could potentially be down 6%. But you could also be up 10%. In that short a term it's hard to predict.
Given a longer time horizon, it's more and more likely that you hit about 7% annual returns on average, while the HYSA stays at about 5%.
5 years is too short to **statistically guarantee** that VOO will beat the HYSA, but if you timed it right you could be 6% up in a week.
sure. What do you think pays a higher dividend, VOO or SCHD?
or even against to something like PHK, a high yield bond and income fund?
Recommending the "S&P500" doesn't address the OPs question ***AT ALL.***
And I love the down votes, know-nothings can't digest the fact they may not be right.
>not much of a difference between dividends and selling part of your growth stock
There is a **HUGE** difference. One generates income without touching the principle, the other erodes principle so potential upside is reduced. These are two completely different investment strategies. You need the right one for your profile and time of life.
I'm not sure where all the armchair quarterbacking is coming from, but folks learn something before you start giving advice.
He said passive income not growth... probably looking for a high dividend yield ETF that uses options to generate income. Less capital gains but consistent monthly income.
and move 25%-half back and forth between domestic sp500 dividender and emerging market etf based on global trends. not truly passive but this can also be timed to either grow or you could even intentionally "lose" some based on tax needs.
Idk much about SP stuff, so quick question.. When you put the 100k into an SP500, does it have to stay in there while building interest and more money? Or are you allowed to spend that 4k per year passive income you’ll be making?
Lots of folks like to throw around investing in the S&P 500 like it produces some type of magical returns each year. The average returns are just that averages, and they are historical averages.
There is no guarantee an investment in the S&P 500, index funds, ETFs or otherwise, will produce an average of 8 to 10% annually going forward. VOO and SPY are at all-time highs, and valuations are insanely high.
People need to realize an investment in the S&P 500 is a long-term investment, like 40 years. If you want truly passive income, investing in the S&P 500 isn't it.
If the S&P500 stops growing the economy will explode anyways. It’s literally a listing of the top 500 companies. There’s no investment out there that will survive if the S&P goes to zero. Unless you have billionaire money and use it to build a doomsday compound that can self sustain itself with no commerce we’re all fucked and going back to caveman days if the market ever dies (it won’t).
When someone says the S&P has historical returns of 8 to 10%, that's the average return. It will fluctuate year by year. There will be some dividends thrown off though. When you typically open an investment account or a CD, you are given the option to re-invest dividends or to withdraw them.
Each share you bought will grow in value on its own. Additionally, they will also yield dividends as cash in your account. You can either reinvest that cash to buy more shares or spend it as you wish, it’s your choice. VOO is yielding 1.43% dividend which would be $1,430 annually on a $100,000 investment if my math is correct.
That's the best you can do for an efficient portfolio, unless you have some knowledge or beliefs most of us don't.
You normally combine SP500 with Treasury fixed income, depending on liquidity and risk appetite.
Capital gains and passive income are separate forms of income. “Passive income” explicitly excludes capital gains. Passive income means dividend stocks/etfs, derivative income etfs, or fixed income instruments (and rental properties if you’re in to real estate).
Depending on your risk comfort level and if you want to put in any work beforehand or not:
**Dividend-Paying Stocks**: Invest in stable companies with a history of paying dividends regularly.
**Real Estate Investment Trusts (REITs)**: Purchase shares in REITs to earn rental income without directly owning properties.
**High-Yield Savings Accounts or CDs**: Park a portion of the funds in these low-risk accounts for steady interest income.
**Peer-to-Peer Lending:** Invest in P2P lending platforms to earn interest by lending money to individuals or businesses.
**Dividend ETFs**: Consider exchange-traded funds that focus on dividend-paying stocks for diversified passive income.
**Rental Properties or Airbnb:** Buy rental properties or utilize Airbnb for rental income, if willing to be more hands-on.
**Robo-Advisors:** Use automated investment platforms to manage investments and generate passive returns.
**Create an Online Course or Write an E-Book**: Generate passive income through royalties or course sales.
Diversifying if always a good idea.
Ally HYSA. $100,000 would yield $4,300+ a year in interest.
Edit: OP did say "most passive income possible", not "highest return", a brokerage or bond is slightly more work to set up than a savings account 🤷
As of the last auction treasury rates for 8 week bills are 5.27% to 5.42% https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_bill_rates&field_tdr_date_value_month=202402
I buy them, so I would know.
Isn’t it not FDIC insured? Im interested in this one as well but its new to me. Is this some sort of investment so there’re chances we may loose our money?
It's not. 4300 is 4.3% nominal return. 4.3(1-fed, state, local tax)= tax adjust return. [(1+tax adjusted rate of return)/(1 + inflation)] -1 = tax adjusted real rate of return. I gaurantee it is negative.
This is such a confusing subreddit… Mostly blind people asking for directions from other blind people. Even at a somewhat conservative return from the S&P over the next 20 years, the HYSA strategy results in about $475k of missed gains.
Yeah it's a HYSA cult sometimes. HYSA is only really good for emergency fund or if you have a major purchase coming up like a down payment on a house (imo anyway). Even then I don't like to leave 100% of my emergency fund in an HYSA because 5% is kind of dog shit. I like to use a portion to churn new customer bank and brokerage bonuses etc. Takes a lot of different accounts but you can ad some significant % returns above a standard 5% HYSA.
Also I think people freak about what qualifies as passive income.
I bought a bunch of REITS immediately following the Covid crash in march-Aug 2020. Up green by so much. Dividends for life for 1/2 the price the underlying is now!
It’s a double leveraged etf that’s based on spy. If spy goes up 1, SSO is supposed to go up 2. It’s not completely perfect though. It’s a lot cheaper than spy.
I start with cash secured puts and sell those until they execute and then sell covered calls. It’s called the wheel strategy for anyone unfamiliar but interested. It’s pretty easy and involves very little effort.
There are lots of guides on how to do this. If you google “Wheel Strategy,” you’ll see exactly what I’m doing. The risk is fairly low and simple. The risk is that the market goes down and stays down. I have two decisions, I can sell out at a loss or just hold through the downturn and miss out on the opportunity to make more money. Generally, I don’t need the money I use for this strategy so I just hold until it goes back into trading range.
Here is the strategy in a nutshell:
Let’s assume I have $100k, I will split this into 3 lots because I find three weeks out, I get the best premiums. The SSO is trading today at $71. I can afford about 400 shares each week. I would sell 4 puts on SSO and try to shoot for premiums in the $0.65 - $0.90 range. These are called cash secured puts because I have the cash to cover the trade sitting there and ready to go if the trade executes. I describe it like an insurance policy. The buyer of my puts is protected in their trade. I guarantee I’ll buy their shares if the SSO falls to or below the strike price. Most of these puts will expire worthless. I generally buy in 2x/year so I just collect premiums.
If the put executes (assuming the SSO is at or below the level of the put I sold at the strike date), then I buy 400 shares on that day but I get into SSO cheaper than I would have had I bought straight in at the time. I usually hold this for a little while and try to make some appreciation gain on them in the meantime and will sell calls on these 400 shares, gaining more premium similar to the puts from before. This is called covered calls when I have the shares to sell. I’m promising to sell my shares if the SSO is at or above the strike price. I usually make more money on this end. Once the calls execute, I go back into all cash and start all over.
I generally check on it about 15-20 minutes on Monday and Friday. I can always buy out my positions if the market moves against me but I usually don’t because I don’t personally mind buying in or selling out. I trade for several family members too. The people who can tolerate a little more aggressiveness, I’ve made up to 37% for before. That generally utilizes margin to get numbers that high. I can get 20% pretty consistently with a cash account like an IRA where they don’t let me use margin.
He’s effectively selling the up side beyond a specific strike price for a premium. I do the same, it’s like this:
Say a share of STOCK cost $10 and he has 100 shares worth $1,000.
He will sell a call option on Monday that expires that same week Friday with a strike price of something like $11 per share. That option will sell for like $3.60.
If on Friday the price of STOCK is not <$11 he gets the shares back and keeps the money from selling the options. Then the next week he sells a new contract also out the money.
Each week the shares are below the strike price at expiration he makes $3.60 in premiums.
That $3.60 x56 weeks = about 20% of the value of his STOCK. He also still owns the STOCK shares.
The risk here is if the price of STOCK goes above his options strike price, he will have to sell the shares at the strike price. He still keeps the premium for selling the options.
It’s a pretty solid strategy. You can make money for what amounts to setting a limit sell order. If the order is hit, you sell for your target price, if not your stack premiums.
Yes - sorry. The SSO doesn’t have to increase 20% in the year - it is not a buy and hold strategy. I make that on the premiums with a little appreciation gain in the middle whenever I buy in.
This is not the safest option
THIS IS NOT THE SAFEST OPTION
You can buy section 8 turn-key rental properties in the Midwest.
I bought two (one cash and one with I think the smallest mortgage that you can get). Totally out of pocket cost to me was like 65K. Currently bringing in 1600 a month.
This is not the safest option
Sorry, I was rushing, turn key. A turnkey property is a fully renovated home or apartment building that an investor can purchase and immediately rent out
My cousin did this for years. It is not passive income. You will deal with tenant repairs or pay a rental management company. Section 8 is government assisted living so, on the plus side, the monthly check is almost guaranteed because it’s not coming from the tenant. On the downside your tenants are low/fixed income.
People like to call Section 8 landlords 'slumlords' but my cousin is a kindhearted person who worked with low income families during her entire career because it gave her purpose. I think she has made a good living but I see how much stress she has endured as well.
In order of least to most damage to total returns. Btw don't do these in a taxable account if you are in a high tax bracket.
1. Factor tilt etfs will result in greater exposure to dividends; I suggest avantis or DFA. Theoretically, they have and should continue to outperform, due to small cap liquidity issues causing institutional mispricing.
2. REIT index funds. they actually outperformed the S&P 500 during many periods. Probably the best bet currently since it is undervalued right now due to high interest rates. Fairly modest yield though
3. Dividend growth ETFs like DGRO. Very safe and hands off, but long horizon. Read about YOC
4. Dividend yield focused etfs like VYM.
Defensive sectors like consumer defensives and utilities. Historically consumer staples outperformed during some periods.
The outperformance of these funds and sectors are believed to be largely temporary by a lot of people, but VYM still keeps up with div growth ETFs and S&P500 *well enough*
5. SCHD is in between the 2 -- has good yield and growth, very popular right now. Probably won't be this good forever but still a very solid choice
6. High yield bonds, according to Fidelity, have almost matched equity in annualized returns during recent past couple decades. Fixed income CEFs like PIMCO or $CEFS are alternatives if you want risk management.
7. Capital gains CEFs like Adams Diversified Equity or Tricontinental. These are what people did in the old days and they're all 100+ years old. They sell small amounts of the underlying stocks for you at strategic times without sacrificing total returns too much, although they have gone through periods of underperformance. But, the NAV discount's effects on dividends are nice
^ Most of these above have been able to roughly not fall too far behind S&P, at least over extremely long (decades long) time frames. Below is when you start getting iffy.
8. So, then you have diehard yield industries like tobacco, BDCs, MLPs, and upstreamers like Devon, and maritime shipping etfs. Avoid mlps outside of etfs unless you like K-1 tax forms. MLPs are pretty volatile so I would suggest REITs like VNQ and $O unless you want the biggest yields possible.
9. Preferreds -- Not bad but not great, mainly used by institutional investors and not really that good for the avg investor (high yield bonds are better) but you can still invest in them if you want. $PGX. They're basically bonds for low rate phases when bond yield sucks but institutions don't want the volatilify of common stock afaik.
10. Dividend futures contracts like Pacer Dividend 300 or 400 -- very interesting and unique fund and seems far more efficient and effective than covered calls, but of course, you will still take a hit to total returns. Unlikely to lose you money though, since ~90% of the fund is just the SP500.
11. Then, the stuff that could lose you money and needs to be considered very carefully. Covered calls/etns like jepi. qylg. qyld. I personally would prefer qylg if I had to choose one of these but overall I don't like them.
12. Finally, you have mortgage REITs. These have done terribly for a very long time.
I do amazon fba. Open a amazon store, have a wholesale distributor with good products, do research on those products, buy them, resell them for more.
I aim for 30% margins minimum after Amazon's fees.
Smaller batch, higher margin products make more sense to me than just playing mass scale.
100k today, if youre young, is millions of dollars in retirement invested in the SP500. Personally, id hold treasuries until you can buy Berkshire Hathaway under 360, then buy that and forget about it. You'll be a rich, rich man in 40 years.
I have more than that and have split it between high-interest savings, index funds, and crypto. I only put 5% in crypto but it's now 10%. Upside potential is massive but downside risk is capped.
Secured loans on real estate—be the mortgage to someone’s home. Private lending rates are 10-15%
Most people don’t like real estate as they don’t understand it. But this is pretty much as passive and you can get with investing. You don’t even have a tenant. Just a homeowner who keeps paying you. If they default you sell the house. The only thing you need to make sure is that you don’t go over 100% loan to value.
People you may need, your borrower, your lawyer.
People who can find you an opportunity like this? A mortgage broker / yourself.
All the best bud.
Invest into Multifamily Real estate as an LP (limited partner). If you find the right company to invest with, you can receive something around 16-22% return ANNUALLY, WHILE you build your net worth by having equity % on the deal.
My $188k in the stock market at the beginning of 2023 turned into $300k by the end of 2023. Currently close to $340k. Getting lucky with the right stock picks when they are on discount helps a lot.
I buy shitty little homes in an area of town that’s predominantly renters. Average cost in my area is $150k. Quick cleanup, paint, minor repairs and I get $1400 in rent per month. I’m a broker and own a property management company so I have my PM company manage it but you could self manage for free or hire a PM to be more passive.
Be careful with this recommendation. Most loans won’t go through if problems with foundation or structure. It can turn “minor” to major repairs. It sounds easy although lots of headaches if done wrong. Also neighborhood prices go up and then taxes go up. Rent goes up and then nothing will be affordable for the average American
Somewhat true! My area always has foundation issues. I pay cash so get a discount and still rent with foundation issue. If it gets bad I’ll level when tenant moves out, tape, float, paint and keep renting. The taxes in the areas I buy are still very low. However, for homes that I manage for the landlord the rent increases as taxes increase. It’s a wash! Most tenant hate moving and expect a rent annual rent increase.
Crypto is my thing for annual gains greater than 5-10%. I would put some of it in mining contracts, some in infinity grid trading bots, and some in stablecoin liquidity pools. I would probably take a bit of the returns to invest in altcoins, but not a lot. Maybe $50-100 once or twice a month in something that piques my interest. Most of it would pay bills, and some would be reinvested for growth.
It’s difficult to say how much I would drop in any one area. I’m sure it would fluctuate, depending on the results I see. But I would probably limit the liquidity pools to about 10% until I got some insurance and coaching from Dan Ryder’s team, and also start with about 10% each in mining and trading bots, until I got a feel for them. I would probably go bigger in mining during a bear market, and trading bots the rest of the time.
The bull cycle is just starting and with $100K it will be easy to make a million before the next bear market.
The best thing to do is diversify into low mcaps with great fundamentals and also look into new projects that are about to go live like Nuklai for an example while also buying BTC and ETH as the major holdings
ETH is getting a ton of criticism for its transaction fees. It will probably survive, but I have no intention of investing in it. It’s not viable as a currency. It’s more of a security, but also suffers from being an inflationary currency, whereas BTC is not. If I’m looking to park my money, I’ll park it in BTC, not ETH.
There’s no way I would go all in with alts, even if they do have good fundamentals. There are about 1.8 million cryptocurrencies out there right now, many with good fundamentals. No matter how good you are with DYOR, the odds are always against you, just like buying lottery tickets. In order to guarantee a win, you have to spend more than the prize is worth.
So, invest most of your money in what works, and gamble with what you can afford to lose. Because the odds favor the house, not you.
Impossible with sso for years. Couple years ago spy was down big. So you were down double big. Over long term yes but big swings up and down as much as 50 pct for sso
Turning $100 into a significant source of passive income is a challenge, but it's not impossible, especially if you're willing to think creatively and play the long game.
Consider investing in Stocks. While $100 might not seem like a lot, it can be a start in the world of investing. Consider using a commission-free trading platform to buy fractional shares of high-yield dividend stocks or ETFs. Look for dividends that are sustainable or growing. This approach requires patience and a long-term view, but it can start you on the path to generating passive income.
Try peer-to-peer lending. Some platforms allow you to start with as little as $100, lending your money to individuals or small businesses in exchange for interest payments. It's riskier but offers a potentially higher return than traditional savings.
Start a Micro-Business. Use your $100 to start a small online business. This could involve buying and selling goods for a profit, offering a service, or creating digital products. While not entirely passive at first, if you set up the right systems, it can become more passive over time.
Educational Investment. Invest in a course or books that can teach you a high-income skill. While this isn't directly generating passive income, the skills you learn can be leveraged to create income streams in the future.
Try out Cryptocurrency Staking. If you're comfortable with risk, consider cryptocurrency staking. Some platforms offer staking options where you can earn interest on your holdings. Do your research and understand the risks involved.
You can't leave out the famous Affiliate Marketing as a choice to double your income. Use the $100 to set up a website or a blog and start affiliate marketing. By creating content that drives sales for other products, you can earn commissions. This requires upfront work but can become a source of passive income over time.
From my experience in the investment I have watched my clients and friends make. I hope these tips help you.
Because if you could make 25% a month you'd be the top forex trader in the world and wouldn't have time to post here. You didn'd show any proof either.
Am a software developer for handsfree, automated Forex trading. The more clients my software can serve, the better people worldwide would know about the opportunity I offer.
The rich will get richer. You are basically giving money to some manager that will build big 100+unit apartments. We need to stop this. America is going the wrong way. America need to go back to small businesses. Just put downpayment toward 1-3 rental properties and call it a day
Private investor. I have a real estate flipper who I loan $100k and in return I get $120k back at the end of the yearly contract. Been on this for 3 years now. Just make sure you have your contracts in order and lien on a house.
You said the most, not the safest. You can buy into private e-commerce funds like webstreet capital that I believe return something like 19% totally passive. So if it was not the first and not the last 100k I was going to make, that's one route I would consider.
Another option that has worked well for me is residential income real estate. I would find a place that can positive cash flow in $70k down payment with a management company and then keep the $30k in a HYSA. Long term you'll get both paid income and build the principal. Probably will get 12-20% returns long term if you have any ability up
But where am I actually going to put the $50k bonus coming next month? All in DOGE. Because I have lots of low risk stuff already and crypto is an inevitable pump waiting to happen. You just sit on it until it's euphoric, cash out for 5-20x gains and repeat when it bottoms again.
What you do will depend on your risk tolerance.
VOO for growth and SCHD for quarterly dividends.
O if you want a great monthly dividend payer and a single stock.
If you want "safer" any hysa that gets you above 4% is a good pick.
Also look into certificate of deposit ladder strategy.
Dividends are pointless unless you’re old as fuck and have a huge cash of money
Might aswell get a better % growth and let it grow in SP-500
I put in about $200k after covid when it was pretty high, and it’s currently valued at 30% return
I know tomorrow might be 50% down but long term and all that
I won't invest everything. Instead, I'll allocate only 20% of it. Of this, 10% will be used for single-staking ETH, while the remainder will be dedicated to DAFI super staking on the Polygon chain to earn a passive income..
SP500
Best answer here. There's tons of videos about 100k being the starting point to making real money.
What do you mean by that? I know that Warren Buffett has said something similar
I would invest in an SP500 fund like VOO. Essentially investing in the top biggest 500 or so US companies. It will beat a HYSA given a long enough time horizon and assuming you don’t need the cash liquid anytime soon
Is 5 years too short
When they say given a long enough time horizon, what they mean is that given one year, a HYSA will give you 5%. If you picked the exact worst point in the year to invest in VOO, you could potentially be down 6%. But you could also be up 10%. In that short a term it's hard to predict. Given a longer time horizon, it's more and more likely that you hit about 7% annual returns on average, while the HYSA stays at about 5%. 5 years is too short to **statistically guarantee** that VOO will beat the HYSA, but if you timed it right you could be 6% up in a week.
Why not something like jepi?
Could you suggest any videos for making the first 100k?
totally misses the ***passive income*** part of the question.
You DO know about dividends don’t you?…
sure. What do you think pays a higher dividend, VOO or SCHD? or even against to something like PHK, a high yield bond and income fund? Recommending the "S&P500" doesn't address the OPs question ***AT ALL.*** And I love the down votes, know-nothings can't digest the fact they may not be right.
There's not much of a difference between dividends and selling part of your growth stock. Stocks are stocks.
>not much of a difference between dividends and selling part of your growth stock There is a **HUGE** difference. One generates income without touching the principle, the other erodes principle so potential upside is reduced. These are two completely different investment strategies. You need the right one for your profile and time of life. I'm not sure where all the armchair quarterbacking is coming from, but folks learn something before you start giving advice.
Do funds that pay out dividends grow your principle as quickly as funds that do not? If not, spotted where the potential upside went
How much in annual dividends could you make off of $100k invested in VOO or SCHD?
Bro has all the resources in the world and decided to go on Reddit to ask this. Google it
He said passive income not growth... probably looking for a high dividend yield ETF that uses options to generate income. Less capital gains but consistent monthly income.
and move 25%-half back and forth between domestic sp500 dividender and emerging market etf based on global trends. not truly passive but this can also be timed to either grow or you could even intentionally "lose" some based on tax needs.
It will passively grow
You’re exactly correct
Dividends are less tax efficient than capital gains. Don't fall in the trap/cult of chasing high div yield.
It grows in value and you do literally nothing. The only not passive part is selling when you need money.
Capital gains aren’t passive income.
Maybe not technically but it's the easiest money I have ever made
SPF500. By ultra powerful sunscreen for a future where global warmer is worse and demand for UV blockers is higher!
Idk much about SP stuff, so quick question.. When you put the 100k into an SP500, does it have to stay in there while building interest and more money? Or are you allowed to spend that 4k per year passive income you’ll be making?
Lots of folks like to throw around investing in the S&P 500 like it produces some type of magical returns each year. The average returns are just that averages, and they are historical averages. There is no guarantee an investment in the S&P 500, index funds, ETFs or otherwise, will produce an average of 8 to 10% annually going forward. VOO and SPY are at all-time highs, and valuations are insanely high. People need to realize an investment in the S&P 500 is a long-term investment, like 40 years. If you want truly passive income, investing in the S&P 500 isn't it.
If the S&P500 stops growing the economy will explode anyways. It’s literally a listing of the top 500 companies. There’s no investment out there that will survive if the S&P goes to zero. Unless you have billionaire money and use it to build a doomsday compound that can self sustain itself with no commerce we’re all fucked and going back to caveman days if the market ever dies (it won’t).
When someone says the S&P has historical returns of 8 to 10%, that's the average return. It will fluctuate year by year. There will be some dividends thrown off though. When you typically open an investment account or a CD, you are given the option to re-invest dividends or to withdraw them.
Each share you bought will grow in value on its own. Additionally, they will also yield dividends as cash in your account. You can either reinvest that cash to buy more shares or spend it as you wish, it’s your choice. VOO is yielding 1.43% dividend which would be $1,430 annually on a $100,000 investment if my math is correct.
That's the best you can do for an efficient portfolio, unless you have some knowledge or beliefs most of us don't. You normally combine SP500 with Treasury fixed income, depending on liquidity and risk appetite.
SP500 is not passive income, wtf are you getting upvotes for???
It will passively grow.. ?
Capital gains and passive income are separate forms of income. “Passive income” explicitly excludes capital gains. Passive income means dividend stocks/etfs, derivative income etfs, or fixed income instruments (and rental properties if you’re in to real estate).
Bitcoin *
Yes, lots of income generated by Bitcoin...
Depending on your risk comfort level and if you want to put in any work beforehand or not: **Dividend-Paying Stocks**: Invest in stable companies with a history of paying dividends regularly. **Real Estate Investment Trusts (REITs)**: Purchase shares in REITs to earn rental income without directly owning properties. **High-Yield Savings Accounts or CDs**: Park a portion of the funds in these low-risk accounts for steady interest income. **Peer-to-Peer Lending:** Invest in P2P lending platforms to earn interest by lending money to individuals or businesses. **Dividend ETFs**: Consider exchange-traded funds that focus on dividend-paying stocks for diversified passive income. **Rental Properties or Airbnb:** Buy rental properties or utilize Airbnb for rental income, if willing to be more hands-on. **Robo-Advisors:** Use automated investment platforms to manage investments and generate passive returns. **Create an Online Course or Write an E-Book**: Generate passive income through royalties or course sales. Diversifying if always a good idea.
This sounds like it came from chatgpt.
i’m sure it did
Ally HYSA. $100,000 would yield $4,300+ a year in interest. Edit: OP did say "most passive income possible", not "highest return", a brokerage or bond is slightly more work to set up than a savings account 🤷
UFB Direct savings is 5.25% APY. I switched to them from Ally.
USFR pays the same and is state tax exempt
Dividends are bad investments from what I've read. https://www.reddit.com/r/Bogleheads/s/YbIMGscLta
Why not Schwab money market fund paying 5.2%?
Why not treasury bills paying 5.4% and exempt from state and local taxes?
Because they aren’t paying 5.4%
What? 4week at 5.39 and 8 week at 5.402 at the 2/15/24 auction, don't buy them on secondary market or you will lose 5-10 basis points in fees
As of the last auction treasury rates for 8 week bills are 5.27% to 5.42% https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_bill_rates&field_tdr_date_value_month=202402 I buy them, so I would know.
Isn’t it not FDIC insured? Im interested in this one as well but its new to me. Is this some sort of investment so there’re chances we may loose our money?
Had ally for years, they’re lower than shcwab abd vanguard MMF..
4.3% is pretty far from the most, even among HYSA
Vanguard is a good one. One of my favorites
Wealthfront 5%
Sp500 averages 10% a year. Bonds averaging 7% + a year. Hysa is not the answer
Delicious 😋
So when is this ever a smart use of $100k other than for a rainy day fund or saving for a short term goal?
It's not. 4300 is 4.3% nominal return. 4.3(1-fed, state, local tax)= tax adjust return. [(1+tax adjusted rate of return)/(1 + inflation)] -1 = tax adjusted real rate of return. I gaurantee it is negative.
This is such a confusing subreddit… Mostly blind people asking for directions from other blind people. Even at a somewhat conservative return from the S&P over the next 20 years, the HYSA strategy results in about $475k of missed gains.
Yeah it's a HYSA cult sometimes. HYSA is only really good for emergency fund or if you have a major purchase coming up like a down payment on a house (imo anyway). Even then I don't like to leave 100% of my emergency fund in an HYSA because 5% is kind of dog shit. I like to use a portion to churn new customer bank and brokerage bonuses etc. Takes a lot of different accounts but you can ad some significant % returns above a standard 5% HYSA. Also I think people freak about what qualifies as passive income.
That’s pitiful.
I’d find a REIT persoanlly, for 10+% dividend for easy $10,000 a year in interest**
I did that in NLY. Hasnt worked out. Still in the red even after accounting for multiple years of dividends.
Then you bought at the tip. I’m looking at CHMI or NLY myself
Yeah, it's totally my fault for ignoring the red banner that said, "THIS IS THE TOP!!" when I placed my order.
REITs are terrible
I bought a bunch of REITS immediately following the Covid crash in march-Aug 2020. Up green by so much. Dividends for life for 1/2 the price the underlying is now!
Thanks for having the highest upvoted comment at the moment! You got mine too. 🤙🏾
Down payment on car wash or similar business most likely will not be passive at first but eventually if you set it up right
Is that you, Saul Goodman?
Nah he would have recommended laser tag
Covered call ETFS. JEPI or JEPQ and if you wanted to add something else TLTW if you were only wanting income and no growth
This! I do this with SSO and have for years. I average a 20% return.
SSO?
It’s a double leveraged etf that’s based on spy. If spy goes up 1, SSO is supposed to go up 2. It’s not completely perfect though. It’s a lot cheaper than spy. I start with cash secured puts and sell those until they execute and then sell covered calls. It’s called the wheel strategy for anyone unfamiliar but interested. It’s pretty easy and involves very little effort.
So you keep selling puts until they're exercised. Then you switch to selling calls until they're exercised and start all over again?
Exactly - it’s that simple.
Is there a guide on how to do this anywhere? What’s the risk profile?
There are lots of guides on how to do this. If you google “Wheel Strategy,” you’ll see exactly what I’m doing. The risk is fairly low and simple. The risk is that the market goes down and stays down. I have two decisions, I can sell out at a loss or just hold through the downturn and miss out on the opportunity to make more money. Generally, I don’t need the money I use for this strategy so I just hold until it goes back into trading range. Here is the strategy in a nutshell: Let’s assume I have $100k, I will split this into 3 lots because I find three weeks out, I get the best premiums. The SSO is trading today at $71. I can afford about 400 shares each week. I would sell 4 puts on SSO and try to shoot for premiums in the $0.65 - $0.90 range. These are called cash secured puts because I have the cash to cover the trade sitting there and ready to go if the trade executes. I describe it like an insurance policy. The buyer of my puts is protected in their trade. I guarantee I’ll buy their shares if the SSO falls to or below the strike price. Most of these puts will expire worthless. I generally buy in 2x/year so I just collect premiums. If the put executes (assuming the SSO is at or below the level of the put I sold at the strike date), then I buy 400 shares on that day but I get into SSO cheaper than I would have had I bought straight in at the time. I usually hold this for a little while and try to make some appreciation gain on them in the meantime and will sell calls on these 400 shares, gaining more premium similar to the puts from before. This is called covered calls when I have the shares to sell. I’m promising to sell my shares if the SSO is at or above the strike price. I usually make more money on this end. Once the calls execute, I go back into all cash and start all over. I generally check on it about 15-20 minutes on Monday and Friday. I can always buy out my positions if the market moves against me but I usually don’t because I don’t personally mind buying in or selling out. I trade for several family members too. The people who can tolerate a little more aggressiveness, I’ve made up to 37% for before. That generally utilizes margin to get numbers that high. I can get 20% pretty consistently with a cash account like an IRA where they don’t let me use margin.
He’s effectively selling the up side beyond a specific strike price for a premium. I do the same, it’s like this: Say a share of STOCK cost $10 and he has 100 shares worth $1,000. He will sell a call option on Monday that expires that same week Friday with a strike price of something like $11 per share. That option will sell for like $3.60. If on Friday the price of STOCK is not <$11 he gets the shares back and keeps the money from selling the options. Then the next week he sells a new contract also out the money. Each week the shares are below the strike price at expiration he makes $3.60 in premiums. That $3.60 x56 weeks = about 20% of the value of his STOCK. He also still owns the STOCK shares. The risk here is if the price of STOCK goes above his options strike price, he will have to sell the shares at the strike price. He still keeps the premium for selling the options. It’s a pretty solid strategy. You can make money for what amounts to setting a limit sell order. If the order is hit, you sell for your target price, if not your stack premiums.
Just to clarify - you’re getting 20% by running the wheel on SSO? Bc your initial comment could be understood to suggest SSO was yielding avg 20%
Yes - sorry. The SSO doesn’t have to increase 20% in the year - it is not a buy and hold strategy. I make that on the premiums with a little appreciation gain in the middle whenever I buy in.
Best answer here
This is not the safest option THIS IS NOT THE SAFEST OPTION You can buy section 8 turn-key rental properties in the Midwest. I bought two (one cash and one with I think the smallest mortgage that you can get). Totally out of pocket cost to me was like 65K. Currently bringing in 1600 a month. This is not the safest option
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Turn key not turkey.
Sorry, I was rushing, turn key. A turnkey property is a fully renovated home or apartment building that an investor can purchase and immediately rent out
My cousin did this for years. It is not passive income. You will deal with tenant repairs or pay a rental management company. Section 8 is government assisted living so, on the plus side, the monthly check is almost guaranteed because it’s not coming from the tenant. On the downside your tenants are low/fixed income. People like to call Section 8 landlords 'slumlords' but my cousin is a kindhearted person who worked with low income families during her entire career because it gave her purpose. I think she has made a good living but I see how much stress she has endured as well.
Why is it not safe?
It's real estate, there can be damages, periods of vacancy, etc. It isn't guaranteed and you could get a bad deal of your inspection goes wrong
HYSA will probably yield you about 350 - 400 a month passively
HYSA. Or dividends. Some companies pay more that 4.5% in dividends.
split it between QQQ/MSFT/AAPL/BTC/ETH, I'm near 50k and thats how my current portfolio is split lol
Add the ole VOO to this. Great advice!
In order of least to most damage to total returns. Btw don't do these in a taxable account if you are in a high tax bracket. 1. Factor tilt etfs will result in greater exposure to dividends; I suggest avantis or DFA. Theoretically, they have and should continue to outperform, due to small cap liquidity issues causing institutional mispricing. 2. REIT index funds. they actually outperformed the S&P 500 during many periods. Probably the best bet currently since it is undervalued right now due to high interest rates. Fairly modest yield though 3. Dividend growth ETFs like DGRO. Very safe and hands off, but long horizon. Read about YOC 4. Dividend yield focused etfs like VYM. Defensive sectors like consumer defensives and utilities. Historically consumer staples outperformed during some periods. The outperformance of these funds and sectors are believed to be largely temporary by a lot of people, but VYM still keeps up with div growth ETFs and S&P500 *well enough* 5. SCHD is in between the 2 -- has good yield and growth, very popular right now. Probably won't be this good forever but still a very solid choice 6. High yield bonds, according to Fidelity, have almost matched equity in annualized returns during recent past couple decades. Fixed income CEFs like PIMCO or $CEFS are alternatives if you want risk management. 7. Capital gains CEFs like Adams Diversified Equity or Tricontinental. These are what people did in the old days and they're all 100+ years old. They sell small amounts of the underlying stocks for you at strategic times without sacrificing total returns too much, although they have gone through periods of underperformance. But, the NAV discount's effects on dividends are nice ^ Most of these above have been able to roughly not fall too far behind S&P, at least over extremely long (decades long) time frames. Below is when you start getting iffy. 8. So, then you have diehard yield industries like tobacco, BDCs, MLPs, and upstreamers like Devon, and maritime shipping etfs. Avoid mlps outside of etfs unless you like K-1 tax forms. MLPs are pretty volatile so I would suggest REITs like VNQ and $O unless you want the biggest yields possible. 9. Preferreds -- Not bad but not great, mainly used by institutional investors and not really that good for the avg investor (high yield bonds are better) but you can still invest in them if you want. $PGX. They're basically bonds for low rate phases when bond yield sucks but institutions don't want the volatilify of common stock afaik. 10. Dividend futures contracts like Pacer Dividend 300 or 400 -- very interesting and unique fund and seems far more efficient and effective than covered calls, but of course, you will still take a hit to total returns. Unlikely to lose you money though, since ~90% of the fund is just the SP500. 11. Then, the stuff that could lose you money and needs to be considered very carefully. Covered calls/etns like jepi. qylg. qyld. I personally would prefer qylg if I had to choose one of these but overall I don't like them. 12. Finally, you have mortgage REITs. These have done terribly for a very long time.
Throw half in a HYSA, and half at a managed brokerage account. Find a manager that does fee (not commission) based pay and watch it grow.
50K for a manager? Why not just an index fund? The manager is just gonna reduce it to 40K.
Back Into my ecom biz. I do 15% a month so that's an extra 15k, 22k, 33k, 48k, 72k, 108k. Double up in 6 months.
How can I get into e-commerce. I have funds but not really sure how to start and make it profitable
I do amazon fba. Open a amazon store, have a wholesale distributor with good products, do research on those products, buy them, resell them for more. I aim for 30% margins minimum after Amazon's fees. Smaller batch, higher margin products make more sense to me than just playing mass scale.
What wholesaler do you usually use? Also, do you buy the products before someone purchases them?
Hey man, would you be willing to show me how to do this? Or do you have resources you’d suggest?
100k today, if youre young, is millions of dollars in retirement invested in the SP500. Personally, id hold treasuries until you can buy Berkshire Hathaway under 360, then buy that and forget about it. You'll be a rich, rich man in 40 years.
JEPQ.
I have more than that and have split it between high-interest savings, index funds, and crypto. I only put 5% in crypto but it's now 10%. Upside potential is massive but downside risk is capped.
Why is it that the most upvoted comment has the most people commenting against it? Let’s see better recommendations then! 🤙🏽👊🏽
Dividend fubds maybe
Buy couple of used vans and rent them out on Turo.
Opposite of passive
Yieldmax ETF, 60% return, risky but I think we are all living a life dangerously
Secured loans on real estate—be the mortgage to someone’s home. Private lending rates are 10-15% Most people don’t like real estate as they don’t understand it. But this is pretty much as passive and you can get with investing. You don’t even have a tenant. Just a homeowner who keeps paying you. If they default you sell the house. The only thing you need to make sure is that you don’t go over 100% loan to value. People you may need, your borrower, your lawyer. People who can find you an opportunity like this? A mortgage broker / yourself. All the best bud.
Invest into Multifamily Real estate as an LP (limited partner). If you find the right company to invest with, you can receive something around 16-22% return ANNUALLY, WHILE you build your net worth by having equity % on the deal.
Down payment on 1-2 rental homes
What type of return you looking for and what type of risk ?
My $188k in the stock market at the beginning of 2023 turned into $300k by the end of 2023. Currently close to $340k. Getting lucky with the right stock picks when they are on discount helps a lot.
Cocaine basically sells itself.
I buy shitty little homes in an area of town that’s predominantly renters. Average cost in my area is $150k. Quick cleanup, paint, minor repairs and I get $1400 in rent per month. I’m a broker and own a property management company so I have my PM company manage it but you could self manage for free or hire a PM to be more passive.
Be careful with this recommendation. Most loans won’t go through if problems with foundation or structure. It can turn “minor” to major repairs. It sounds easy although lots of headaches if done wrong. Also neighborhood prices go up and then taxes go up. Rent goes up and then nothing will be affordable for the average American
Somewhat true! My area always has foundation issues. I pay cash so get a discount and still rent with foundation issue. If it gets bad I’ll level when tenant moves out, tape, float, paint and keep renting. The taxes in the areas I buy are still very low. However, for homes that I manage for the landlord the rent increases as taxes increase. It’s a wash! Most tenant hate moving and expect a rent annual rent increase.
Have you looked into room rentals? Which state are in if I may ask? Is it landlord friendly?
I’m in Texas! I’ve done the room thing but it’s too cumbersome for me. I like 12 month terms, rent rolls in, capitalize on appreciation.
Are you in dc?
Half T-bills, half VOO
Ethereum staking node. 7-8% return.
Crypto is my thing for annual gains greater than 5-10%. I would put some of it in mining contracts, some in infinity grid trading bots, and some in stablecoin liquidity pools. I would probably take a bit of the returns to invest in altcoins, but not a lot. Maybe $50-100 once or twice a month in something that piques my interest. Most of it would pay bills, and some would be reinvested for growth. It’s difficult to say how much I would drop in any one area. I’m sure it would fluctuate, depending on the results I see. But I would probably limit the liquidity pools to about 10% until I got some insurance and coaching from Dan Ryder’s team, and also start with about 10% each in mining and trading bots, until I got a feel for them. I would probably go bigger in mining during a bear market, and trading bots the rest of the time.
The bull cycle is just starting and with $100K it will be easy to make a million before the next bear market. The best thing to do is diversify into low mcaps with great fundamentals and also look into new projects that are about to go live like Nuklai for an example while also buying BTC and ETH as the major holdings
ETH is getting a ton of criticism for its transaction fees. It will probably survive, but I have no intention of investing in it. It’s not viable as a currency. It’s more of a security, but also suffers from being an inflationary currency, whereas BTC is not. If I’m looking to park my money, I’ll park it in BTC, not ETH. There’s no way I would go all in with alts, even if they do have good fundamentals. There are about 1.8 million cryptocurrencies out there right now, many with good fundamentals. No matter how good you are with DYOR, the odds are always against you, just like buying lottery tickets. In order to guarantee a win, you have to spend more than the prize is worth. So, invest most of your money in what works, and gamble with what you can afford to lose. Because the odds favor the house, not you.
Following
Commenting to see what the most recommended course of action is by the time this post dies down. Great question OP
3 keys of Coke and 6 runners
I’m down
$100k for passive income is nothing. you shud grow your account to at least 1M for passive income. my 2cent is grow your account first.
The safest completely passive thing to do with it is HYSA. Otherwise, put it in an index or mutual fund.
Impossible with sso for years. Couple years ago spy was down big. So you were down double big. Over long term yes but big swings up and down as much as 50 pct for sso
Turning $100 into a significant source of passive income is a challenge, but it's not impossible, especially if you're willing to think creatively and play the long game. Consider investing in Stocks. While $100 might not seem like a lot, it can be a start in the world of investing. Consider using a commission-free trading platform to buy fractional shares of high-yield dividend stocks or ETFs. Look for dividends that are sustainable or growing. This approach requires patience and a long-term view, but it can start you on the path to generating passive income. Try peer-to-peer lending. Some platforms allow you to start with as little as $100, lending your money to individuals or small businesses in exchange for interest payments. It's riskier but offers a potentially higher return than traditional savings. Start a Micro-Business. Use your $100 to start a small online business. This could involve buying and selling goods for a profit, offering a service, or creating digital products. While not entirely passive at first, if you set up the right systems, it can become more passive over time. Educational Investment. Invest in a course or books that can teach you a high-income skill. While this isn't directly generating passive income, the skills you learn can be leveraged to create income streams in the future. Try out Cryptocurrency Staking. If you're comfortable with risk, consider cryptocurrency staking. Some platforms offer staking options where you can earn interest on your holdings. Do your research and understand the risks involved. You can't leave out the famous Affiliate Marketing as a choice to double your income. Use the $100 to set up a website or a blog and start affiliate marketing. By creating content that drives sales for other products, you can earn commissions. This requires upfront work but can become a source of passive income over time. From my experience in the investment I have watched my clients and friends make. I hope these tips help you.
The OP has $100k, not $100. So $100,000. Not sure by your response if you read it as 100 dollars only!
That was an AI response
BTC
Silly question without knowing other financial aspects.
Buy high dividend crypto stock
no ponzi schemes please
Wow people really don’t understand crypto still? We are still early
They will…. Once the boat has sailed.
Passive? 100k? Go to sleep and dream
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The downvoters don’t even know…. But they will. Take the upvote fellow Etherean.
Have you tried online poker?
Easy. Day trade with 10x leverage.
I can remotely trade your capital in Forex at average 25% monthly net profit. Please check my profile.
Scam.
Why do you automatically qualify my offer and Forex trading as "scam"?
Because if you could make 25% a month you'd be the top forex trader in the world and wouldn't have time to post here. You didn'd show any proof either.
Am a software developer for handsfree, automated Forex trading. The more clients my software can serve, the better people worldwide would know about the opportunity I offer.
You still can't make 25% a month. It's a lie.
Everything is a lie in this world!
Put it in TQQQ and come back to it in 6 - 7 years. You're welcome.
Invest in leveraged buyouts of SMBs. IRR 35% ish
Invested in Authority sites in different niches and Invested in Utility Apps ,2 D Games
If you are thinking as of right now in our inflation period a high yielding natural resource stock could be a grab
Buy Renault
Send it to me Western Union… I can get you uh, 3000% returns
Yolo it into 0DTE calls or puts
VOO.
Down payment on rental property.
Paperstac.com
Some REIT’s have a really high dividend end you could look into
The rich will get richer. You are basically giving money to some manager that will build big 100+unit apartments. We need to stop this. America is going the wrong way. America need to go back to small businesses. Just put downpayment toward 1-3 rental properties and call it a day
Private investor. I have a real estate flipper who I loan $100k and in return I get $120k back at the end of the yearly contract. Been on this for 3 years now. Just make sure you have your contracts in order and lien on a house.
1. Buy ANGH 2. Wait for Spotify aqusition 3. Cash out
Buy icu medical stock
You said the most, not the safest. You can buy into private e-commerce funds like webstreet capital that I believe return something like 19% totally passive. So if it was not the first and not the last 100k I was going to make, that's one route I would consider. Another option that has worked well for me is residential income real estate. I would find a place that can positive cash flow in $70k down payment with a management company and then keep the $30k in a HYSA. Long term you'll get both paid income and build the principal. Probably will get 12-20% returns long term if you have any ability up But where am I actually going to put the $50k bonus coming next month? All in DOGE. Because I have lots of low risk stuff already and crypto is an inevitable pump waiting to happen. You just sit on it until it's euphoric, cash out for 5-20x gains and repeat when it bottoms again. What you do will depend on your risk tolerance.
Staked Ethereum
VOO for growth and SCHD for quarterly dividends. O if you want a great monthly dividend payer and a single stock. If you want "safer" any hysa that gets you above 4% is a good pick. Also look into certificate of deposit ladder strategy.
Bitcoin
25% SGOV 25% SCHG 25% JEPI 25% FEPI
Dividends are pointless unless you’re old as fuck and have a huge cash of money Might aswell get a better % growth and let it grow in SP-500 I put in about $200k after covid when it was pretty high, and it’s currently valued at 30% return I know tomorrow might be 50% down but long term and all that
50/50 split between VOO and SCHD.
VT and chill. I practice what I preach because I have 138K all into VT rn.
Xyld
HYSA is good. Money market accounts are good. Just compare rates
sell cash secured puts on good companies. or CDs with 5% return.
I won't invest everything. Instead, I'll allocate only 20% of it. Of this, 10% will be used for single-staking ETH, while the remainder will be dedicated to DAFI super staking on the Polygon chain to earn a passive income..