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Secondary Steam of Income

Discussion in 'General Investing Discussion' started by Michael_Johnson, 7th Apr, 2009.

  1. Michael_Johnson

    Michael_Johnson Member

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    Hi,

    I have been wondering for some time now about a secondary stream of income. I know that in shares you can earn income from dividends, and earn capital growth provided the market plays it so.

    I know with rentals you can earn passive income, and also earn capital gains based on supply and demand drivers. With business, you can earn an income from your daily business dealings, minus your expenses, provided the economic climate is right, also supply and demand.

    With the internet, i know you can do affiliate marketing and earn commissions on the salesmanship of other peoples products. I am still wondering however, what is a good sensible avenue, that could be applied long term for creating a second stream of income?

    Im not entirely sure if a managed fund would enable this or not, but am somewhat open to discussion regarding this. I have good knowledge of the before mentioned fields, but am just wondering if anyone here earns a second stream of income from investments, and what would they recommend as a good avenue.

    If this falls into the category of 'financial advice' of which cannot be given, if you could perhaps point in an appropriate direction, it would be much appreciated.

    Thank you.
     
  2. Tropo

    Tropo Well-Known Member

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    “I am still wondering however, what is a good sensible avenue, that could be applied long term for creating a second stream of income?”

    Trading.:cool:
     
  3. Michael_Johnson

    Michael_Johnson Member

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    Ive read and heard alot about trading. So many different things you can trade - efts, eminis, cds, warrants, options, shares themselves - im sure there are others.

    Ive done some research into both technical and fundamental analysis - trend reading etc, paying attention to news reports - i even have an etrade account all set up to trade.

    I had a package sent to me a while ago, regarding trading - the man grabbed a member of the audience and showed him how to trade correctly. Learning when to buy in, and the moment it dips, exiting the trade, as an example.

    Do you trade yourself tropo?
     
  4. Tropo

    Tropo Well-Known Member

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  5. Michael_Johnson

    Michael_Johnson Member

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    Im currently watching a webinar by andrew baxtor. Elite traders is what its called. So far, it seems impressive in what they are offering. Im just waiting to see the education plan, and overall cost of the service.

    I will get days off while im working, so something to do during those days off instead of meandering around the house would be good. So thanks for the idea tropo, will be using it in my research and hopefully actions. :)
     
  6. Tropo

    Tropo Well-Known Member

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  7. Michael_Johnson

    Michael_Johnson Member

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    Interesting article. What i get from that is to have a system, keep to your system and know your markets. Dont let anyone else tell you how to do it, and learn from your experiences. Furthermore, you dont get anything out of the markets unless you go into the markets to gain.

    Thanks for that :)
     
  8. Tropo

    Tropo Well-Known Member

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    You hit the nail on the head...:D
    Without a system you are another loser
     
  9. Michael_Johnson

    Michael_Johnson Member

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    So it looks like when i get the avaliable cash, which will be soon, i might go with that elite trading group. Seems to have a good education foundation, furthermore proven systems and princples at work. Seems like a good investment if i want to make a little extra cash.

    The other thing i like is the fact that they have professionals or at least what they call professionals trading live with you in the trading room. Looks good. Do i care if its imperfect. Nope. The way i look at it, if you are right 80% of the time, thats good enough.
     
  10. Tropo

    Tropo Well-Known Member

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    Michael,

    Before you do anything, ask yourself why you want to be a trader.
    Next...get a couple of good books about trading (written only by pro traders!!!!!) and get some basic understanding of this business.
    A lot of guys call themselves professionals (incl. taxi drivers), so make sure you deal with a right people.
    Do not forget that statistically approx. 7 traders out of 10 are consistently losing money.
    You must have a good knowledge and experience to survive in the market.
    PS - If you are able to get it right 80% of the time, you will become a super trader... ;)
     
  11. Michael_Johnson

    Michael_Johnson Member

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    Ill have a good think about it. Cheers mate.
     
  12. Chris C

    Chris C Well-Known Member

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    I make a good "passive" income from websites and selling advertising and of late doing some on the side consulting in regards to online marketing.

    Though like anything the term "passive" isn't really appropriate given that like building or buying any asset, be it websites, shares or IPs that produces "passive" income, initially requires hard work and some smarts. Of course you do get to a point where you can rest on your lorals, but ultimately all assets, be it websites, IPs, etc, will also depreciate if you don't maintain them...
     
  13. Michael_Johnson

    Michael_Johnson Member

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    It just seems that the term passive income really isnt all that passive. You are right in that at some point, you are going to have to work hard and use your smarts to understand and work the asset.

    Everything requires work in it at some point. Whether you are trading, running a business or doing internet marketing. It all requires work. I suppose for me it was about dispeling the myth about buying something and having the money come in through ownership.

    Nothing is that easy. I will be working 50 hours a week, so finding the spare time to actually do other things may be a bit challenging. I may have to settle for real estate investment, which is not a bad thing at all. It would give me a chance to use the knowledge ive earned as of late regarding it.

    The course i was looking at is worth $6997 and to be honest with you, i dont feel like commiting to another payment plan for the next 2 years. I think i am more of a conservative inverstor, someone who likes to take their time, research and strategise for long term.

    I feel better about being that type of investor. Which i guess for myself means my interest is in capital growth, and not just income. Although it would be nice to earn a secondary income stream, i think i am struggling to see how i am going to squeeze it all in with my partner, friends, work, r & r and family commitments.

    I think i will just take my time.

    Edit - im talking with a friend at the moment who has a large group of his friends who are quite wealthy who do trading of all kinds. Im just not rushing into this i have done with previous systems. Need more information. :)
     
    Last edited by a moderator: 8th Apr, 2009
  14. AsxBroker

    AsxBroker Well-Known Member

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    Hi Mike,

    This is definitely the best thing to do!

    Cheers,

    Dan
     
  15. Michael_Johnson

    Michael_Johnson Member

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    Real estate:

    1. They aren’t making any more land.
    2. Properties more often than not rise in value.
    3. You can add value through renovations.
    4. Rental returns are often good provided you do sound checks on people.
    5. Equity is increased through renovations which means you can gain more properties through that increased value.
    6. You can invest worldwide with property.
    7. The key component THEY ARENT MAKING MORE LAND!
    8. Property is a solid investment provided a)Mortgage is under control b)People look after the property c)You have good insurance.
    9. The capital gains are a long term benefit, and not something you immediately see unless you do the appropriate renovation.
    10. Provided you have sound income, and some equity base to begin with, you can buy more properties through leverage. Of which you can lead yourself to financial success.

    Real estate is my investment choice based on these facts. I have put alot of thought into investing over the last 3 years, looked at many different areas. I have read and read, talked and talked, and can honestly say that i am still none the wiser, except based on the above facts.

    Shares i can only really give myself about 12% return via dividends, but then again, whats to be said about company stability? At least with property i know i have insurance if someone damages the property, and with a small fee, i can get a real estate agent to manage the tenants.

    With the internet, i cannot be bothered putting in the required work to 'find a hungry crowd' to service. However, with real estate, i have no problem driving the suburb, checking out home opens and i do enjoy all the checking you have to do before purchasing a property.

    Trading seems like fun, but at the same time, i could just work with basic money principles i.e. paying down bad debt, funding good debt, and putting into practice good basic money management to end up with more money in my pocket. I see now to focus on my career more so.

    Capital gains seems to be a market demand factor, i.e. renovations to a kitchen and bathroom, finding out what really makes the market tick in this respect, and discussing floor plan designs etc, all seem like really good ways to build capital growth. The passive income side of it is more in my favour, when the debt ratio is down, therefore making it a green property.

    The leverage with tax you have with property is also very favourable. The fact that interest and other associated costs with an investment property can either be claimed in full or as a depreciation over 5 years. I can chop and change a property, whereas i cannot chop and change a company for better performance.

    People will always need houses - and there will always be a demand for houses in the future. The key factor that drives this is that the population of the world isnt getting smaller yet, which means there is going to be a demand for property. Furthermore, there are all these little developments happening around Australia, so there is good money to be made through property.

    I dont care too much about the ups and downs of the market, or for that matter the troubles of the world. If you keep your head down, mind your own business, put to work a good strategy and adapt yourself to things, progress will and more often than not is made. I am not worried anymore.
     
  16. Tropo

    Tropo Well-Known Member

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    "Trading seems like fun........."

    If you think that trading is a fun – play bridge instead! :rolleyes:
     
  17. Michael_Johnson

    Michael_Johnson Member

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    Everyone i have watched who has hocked the program goes IT IS FUN!!! I was just quoting what i had seen, tis all. ;)
     
  18. TROM

    TROM Active Member

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    Quote by Chris -I make a good "passive" income from websites and selling advertising and of late doing some on the side consulting in regards to online marketing.

    Though like anything the term "passive" isn't really appropriate given that like building or buying any asset, be it websites, shares or IPs that produces "passive" income, initially requires hard work and some smarts. Of course you do get to a point where you can rest on your lorals, but ultimately all assets, be it websites, IPs, etc, will also depreciate if you don't maintain them...

    Hey Chris care to give some advice on how to set up Internet business how much would it realistically cost to set up and how long before money does really come into the picture!
     
  19. Chris C

    Chris C Well-Known Member

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    When it comes to websites they cost very little to setup, run and manage... but the true cost of getting involved with websites is not a financial one; it's the time costs that are enormous.

    In my experience I would say it takes most people a year or two before they really see any significant returns when it comes to their website ventures, largely because there is such a big learning curve to go through. There are always ways to fast track your learning, but of course this also costs money and still has time requirements.

    My advice to most people is if you are going to get involved with websites make sure you are doing it because you want to (ie make the site about something you are passionate about) not because you think you can make some easy money, because in life there is no such thing as a free lunch, websites are no different, so you may as well enjoy what you do.