Monday 12 October 2015

The Allure And Alternative Path To Passive Income - Part 1 of 2

There's fashion in investing circles too.

For those of us above 40, we can remember a time (before Rich Dad Poor Dad) where every other investing/trading book,seminar, or workshop will tout Millionaire this, Millionaire that.

Now? It's Passive Income this, Passive Income that...   

Just like low-rise hipster pants were the rage a few years back, its now replaced by high-rise pants that accentuates the waist over the hip, this Passive Income popularity will too be replaced by another flavour of the decade. You just wait.

The Allure of Passive Income

Of course it's attractive! 

Who doesn't want something without lifting a single finger for it? Can someone carry my fullpack? It's so heavy!

Who doesn't want a beautiful body without exercising and dieting for it? Just lie down and upon waking up... Wah lah!

That's where people forget... 

Liposuction and guy Friday do cost money. 

Passive Income is neither special nor elusive

The average working person riding the ComfortDelgro bus upon reaching 55, just need to make 1 out of 3 choices, and upon 65, will have "passive income" for life!!!

No lighting, no thunder.  

That's why I am confident when everyone and anyone has passive income, it will go out of fashion...

A bit like being a Millionaire in Indonesian Rupiah terms.

An exercise on reading skills

Before I share with you the alternative path to Passive Income in my next post, here's a fun exercise for you to try out:

1)  Those Passive Income opinion leaders you follow, can you tell apart those who are climbing up the mountain from those who are coming down the mountain?

2)  If yes, notice the difference in goal setting and strategy employed between them?

3)  Most of those who are coming down the mountain have been quite forthright in how they accumulated their capital from which their "passive incomes" were based on. 

Now try identifying what are the different sources and how much of it were based on a Passive Income strategy?


  1. Replies
    1. CW,


      You know in movies, the original is always the best... The next series are usually not so fantastic... I was so disappointed with the Hobbit :(

      Keep expectations low to avoid disappointments ;)

  2. Hi SMOL,

    I've written this a long time ago regarding the whims and fashions of the investing world :

    My take is that you can never have a passive income by only doing passive income. That is, if you want a dividend coming in 'passively' every month, you cannot just do dividend all the way. Your dividends will never be high enough to make it because your capital is never enough. At some point in time, you must focus on building up your capital by any means, passive or active.

    I'm still young. I'll focus on capital building by active work first lol

    1. LP,

      Wow! Talk about a blast from the past! 2008 no less!

      That's why you are the Tavern master for quite a few financial bloggers out there (including me).

      We started out as readers, progressed to participants in your cbox, and finally branched out to have our own blogs.

      I trace my school of kung fu blogging to your Shaolin tavern ;)

      This coming Dec would be my 5th year of blogging!?

      Where did all that time went?

      Lucky I still handsome ;)

  3. I always believe we need to spend more time building our human capital or actually "character" when we are younger, while having a great awareness on investment. But we cannot keep in our 20s thinking about getting rich just by pure investing of your own money.

    But when I advocate building of human capital patiently, I definitely will receive so many laughter and cynicism that they will retire before 35 while I will carry on working until 60? haha maybe 50?

    1. Rolf,

      For me, it was stumbling onto my "character" rather than something I had planned to develop....

      But I agree with what you say.

      Without the right "character", even if we got a windfall, we won't be able to maintain and grow it - just look at those lottery winners who lost everything within 2 years...

      During my time, to retire at 40 was the thing to aim for. I guess to the new generation of today, its now 35 ;)

      At this rate, the next next generation will shoot for retiring at 30!?


    2. oh dear then only the old are working while the young is retiring. imagine an economy driven by the old only!

    3. That's why we need more foreign talent ;)

      After saying this, I don't know whether to laugh or to cry...

  4. temperament,

    Of course its possible!

    There are already a few bloggers within our community, who are in their 30s, where working is optional ;)

    But their initial pot of gold is usually not earned through investing.

    Investing is more to maintain and grow their exiting wealth; just like any other high net worth accredited investors ;)

    Singapore is like any other cosmopolitan cities like New York, London, Hong Kong, Shanghai, etc.

    If we can make it here, we can make it ANYWHERE!

  5. temperament,

    The first generation built up the wealth.

    The 2nd generation expanded on that wealth.

    The 3rd generation squandered it all since it's passive income and wealth mah ;)

    3 generations from shirt sleeves to shirt sleeves; 富不过三代。

  6. Hi SMOL

    People above 60 are talking about a chance to take aeroplane. Look at people at 40s, they talked about being millionaire. haha. People above 70s talked about world peace after ww2.

    1. Frugal Daddy,

      If we talk to the young (and some of my generation), there can be an appalling lack of knowledge on our recent history....

      Thankfully there were no 3rd World War; but after WWII, too many local and regional conflicts continued and further erupted till today.

      A word of thanks to China for invading Vietnam in 1979 to "punish" Vietnam for overthrowing the Khmer Rouge of Cambodia - who was then under China's protection; just as Vietnam was under the protection of the then Soviet Union. Thankfully, the communists were divided!

      By drawing Vietnam's best and battle-harden regiments north of their borders, this gave ASEAN the space and time to marshal our defences (military, economic, and political) to avoid the falling dominoes that so many feared.

      We were fortunate once again with the rise of Suharto in 1965 and replacing Sukarno in 1967; it ended Konfrontasi with Malaysia and Singapore.

      Without this peace and stability in the region, Singapore's economic miracle would not have the soil, sun, and water to germinate...

      Yes, peace - just like passive income - can easily be taken for granted.

      Just sit back and relax? That's how nations and the wealthy fall...

  7. I bet living a leisurely life will the next fashion. :)
    I am up for it... any tips..

    1. GP Blogger,

      1) Born into wealth.

      2) Marry rich.

      3) Strike Toto.

      4) If all else fails, work your ass off!


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