I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"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

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down

Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Saturday, 23 June 2012

Investing Made Simple by Uncle8888 (34)

Read? Investing Made Simple by Uncle8888 (33)

Read? Active Income and Passive Income

What is passive income?

Passive income is money received on a regular basis, with little effort required to maintain it.

The three key words: regular, little effort. and maintain

What is active income?

Active Income will require significant effort and time to acquire with services performed.

Simply, it just means that we have to frequently use our human asset, significant effort and time to get the payouts from these activities. The frequency to execute these activities is often measured in term of minutes, hours, days, or week to receive the expected financial rewards.

What is passive income from stocks?

The conventional and traditional wisdom on passive income is based on these three key words: regular, little effort, and maintain will lead retail investors to think of dividend play stocks and especially S-REITs for their high yield - Can recommend some high yield dividend stocks for passive income?

What is regular???

Most retail investors will define "regular" to mean receiving cash flow from stocks in the form of stock dividends or cash DPUs via quarterly, semi and annual basis.

What is passive income from stocks?

Most retail passive income investors will refer to stock dividends and cash DPUs as primary source of passive income from stocks and realized gains from stocks as passive income is hardly found in their investing dictionary.

What is cash flow from stocks?

Cash flow from stocks can come from either or both (1) stock dividends/DPU AND (2) realized gains from partial or full divestment of stocks.

What is really passive income from stocks?

Please read again the above question.

If we may personally want to re-define passive income from stocks to mean:

To receive cash flow from stocks with little effort required to maintain it. (This definition will almost exclude you from becoming an active trader who will need lots of effort and close attention to profit from short-term market and stock price movement)

By removing the time element from this definition of passive income from stocks and focusing on little effort required to maintain it, you may flip your investing mind to revise your investing strategies for a mixed portfolio over long-term investing to meet your investing goals and avoid falling into dividend traps.

Read? Current Dividend Yield is good but avoid falling into potential Dividend Traps (5)

It is especially true for the younger investors in their 20s, 30s and may be even for early 40s. (as Uncle8888 also started quite late in getting very serious in the stock market)

Get it???

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