Read? Does Your Account Size Matter? - Part 3
You can't really get rich with it!
When your account size is not extremely large, you can't get rich with passive income ONLY. Passive income from property rentals, stock dividends or bond coupons. However, it may be possible; but it will take decades of doing it right to become rich.
To Get Rich = Getting more and more Total Return
Total Return = Capital Gain + Passive Income.
Passive income is generated from the "utility" of property, stock or bond. It is an expected form of return from this "utility".
So where does Capital Gain come from?
The Greater Fool theory!
Your capital gain must come from "Greater Fool" in the market who will hand over part of their hard earned money from their jobs to you in the form of speculation. The large Capital Gain in the market must come from many Greater Fools speculating and handing over part of their hard earned money from their jobs slowly to the Better Fools. When more and more Greater Fools start chasing it you can become rich pretty fast.
"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder
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1 hour ago
Hi CW,
ReplyDeletei concur with what you have posted. So it seems those who are "Better Fools" are blood-suckers. And the market is a zero sum game. No?
Have the best of both world. Go for both capital gains and dividends. Winning! ^^
ReplyDeleteWhere there are money to be made and lost, there will always be a Greater Fool Theory :)
ReplyDeletePassive income is absolutely the way to go. That means owning low PE, high dividend stocks with a low debt to equity ratio, or else alternative investments that also throw off income. Beats betting on bubbles like linkedin at a PE of 1000!
ReplyDeleteI like this post!
ReplyDeleteBut I am biased. I belong to the Growth and Income school. LOL!
Yes, the market is not our mother.
hi temperament i cannot install MS Money on my windows 7!
ReplyDeletehi Drizzt,
DeleteMS MONEY have several versions. If you want to install from the net, it will show a 2005 UK version and international version. And this US version USMONEYDLXSunset.
i have installed all version sucessfully.
hi Temperament, when i tried installing it says "corrupted autorun.inf" i downloaded the sunsets from Microsoft directly
Deletehi Dritzz,
ReplyDeleteTry to install the 2005 UK or international version. Actually there are many other versions. Micro-Soft keep on updating the version until they discontinue this software. It's has become a freeware now.
i think it's a pity if you are unable to share your opinion of this software. i am sure many bloggers like to hear your opinion.
i read it somewhere that Micro-Soft discontinued this software and allow it to become a freeware because there are many similar or almost the same freewares you can download from the internet.
i have tried some but i am so use to MicroSoft Money. After all i have been using it for more than 23 years.
Cheers!