Reality of investments on practice

[uneng]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

Once they manage doing this first step, then passive income investments start looking more attractive.

[Alpha Marine]

I think this is in line with saying people should focus on getting more sources of income or a better source of income instead of focusing on how to invest. You can't invest what you don't have, and you'll only have to invest when you have a reasonable source of income.

This is one reason I always say Bitcoin kind of gives normal people something to work with. A lot of us, including myself, would not have a passive investment right now if it were not for Bitcoin. With Bitcoin, I can keep accumulating, and in 4 to 5 years, that would have been worth something. If you are able to hold for 8 to 10 years, it will be worth even more. I don't think I would have any financial investment right now without bitcoin.

[Hewlet]

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

the reality is that most  investors don't always have the means of investing with an amount that is relative high enough for most of he popular investment option we know of. that is the reason why a lot of them easily get frustrated because when you do the analysis of what you have and look at what returns you might be getting in the short run from the available investment option, it is just enough to give up even before starting because for the most part, smaller profit does not always yield a reasonable return for most investment option.

diversification is not always a bad idea if done the right way but if not properly followed, it is better to rely on investing in an asset you are familiar with rather than trying out so many things you have little or no knowledge of.

[Fortify]

I'm not sure you have much knowledge about "passive investments" in general if you are talking about monthly returns because nobody who has done even a basic amount of investing in stocks would talk about it that way - it's always the annual return. You ignore the fact of compounding over the lifetime of the investment as well, because most people will keep adding over 20 or 30 years, so dividends and company profits create a massive return by the end of it. If you're extracting a few hundred a month instead of building a fortune, you're most likely at the wind down phase of your life or have drastically misunderstood the amount you would need for a comfortable retirement. What do you even mean by "non-passive investment" because you breeze past that without even defining it. I'd worry for people taking financial advice from such logic that is full of holes.

[Ultegra134]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

Once they manage doing this first step, then passive income investments start looking more attractive.

I'm sorry but 0.6% monthly profit is approximately 7.5% APY (Yearly). That's not too bad, quite the opposite. Moreover, $600 isn't a petty amount of money, it's a quite substantial monthly income if you ask me. It certainly depends on where you live, but that's more than half of an average salary in Greece, thus, having such a passive income on a monthly basis doesn't sound as bad as you make it to be.

It'll take approximately 3.20 years to break even, it may sound a lot, but in reality, it's not. You could take a loan, pay anywhere from $300 to $500 per month and receive $600 per month in return.

[red4slash]

When talking about stocks or other things of course we are not only about discussing about monthly profits but in other conditions we know that apart from the profits of rising stocks of course for our owners we will obviously get dividends that we can use as another form of profit.

In addition, the context of investment is clearly for the long term as well but when you say this there may be an urge to be in bitcoin, right? being in bitcoin even sometimes will not be too certain because of short-term risks (especially if we only use monthly as a benchmark) then obviously we can get losses so in this case we have to know what we are doing including understanding the concept of investment we want and the risks we will face.
It all comes back to good planning and we know that even though bitcoin is worth it, in the end it is only good for the long term and not everyone can be in bitcoin because of this and the risks they do not expect.

[Kagaru]

Actually passive investments do often feel slow especially when you’re starting with smaller amounts, It’s true that building meaningful returns takes time unless you already have significant capital. For beginners focusing on higher effort, but higher reward strategies like side hustles, skill building  or active investing might make more sense early on and yhe idea of growing your initial capital faster before shifting to passive income later is smart.

That said even small passive investments can compound over time, so balancing both approaches could work too, It’s all about finding what fits your goals and patience level.

[Richbased]

In the end, human wants are unlimited because even if someone who is starting their financial journey gets into non-passive investment just to maximize their profits and earnings, it will never be enough as they will keep on looking for more income generating source that can enable them balance their financial needs. The problem with people now is that everyone just want to get quick rich and don't even care what it will take them. There is nothing bad in starting small and maintaining consistency till you have achieve enough funds to establish more sources of income that will aid your financial journey.

Let me take from the example you gave, $100,000 is a lot of money but even if it can only bring $600 returns at the end of the month, i see no problem with that if you don't have workers who will be part of your profits. If it's an investment or business you can manage alone it's fine. $600 is also an amount that can serve a family (in my country) in a month and they will still be left with money for other things. If the business keeps being in good shape then in a year it can generate capital for another investment, from there you start growing gradually than looking for non-passive investment that will drain your strength, stress you a lot such that you might even end up using more than half of your income on healthcare. The real deal is to have a steady flow of income and with time you will still reach that level you want.

[coupable]

Regardless of the type of investment, if you're starting with a small budget, don't expect significant returns over the long term. The problem, I believe, is that some investors, or a large segment of them, want a safe (lower-risk) investment with good returns, which is only possible in a few rare exceptions, when the investor is very lucky.

When it comes to investing, the principle of risk must be taken into account. You want lower risk, so you should diversify your investment portfolio, which means investing the largest possible amount and generating returns from different investments that can generate relatively good profits. Alternatively, if you have a small budget, there's no point in traditional, safe investments, and your best option is Bitcoin. Despite its high risk, Bitcoin is considered the safest investment in the digital asset market.

[slapper]

Nobody talks about the slow suffocation of optimism as well as looking at those numbers: 0.6% per month, barely enough to get a cheap phone plan. "Passive income" sounds like a dream until you realize that it is a slow-motion crawl, and yes, you need a mountain of cash just to buy a cup of coffee every day. Most individuals who hustle on small investments are being sold an idea that is mathematically stacked against them before they even start. It is not cynicism, it is compounding versus inflation versus the cost of living in the modern world

The passive investing is sold as "set and forget", safety, freedom. However, to novices, it only brings the illusion of improvement, a scoreboard that only counts up when you are already ahead. Then, is going full active the right thing to do? Sometimes, absolutely. When you are just starting out, perhaps by grinding it out doing freelance, or a microbusiness, or flipping collectibles, whatever. At least the profits are visible, the game is not rigged against the already-wealthy

Still, people forget that risk is a reality, and "active" sometimes implies that you can lose quicker. The financial world is constructed out of problems: "how do I get rich with 300 dollars and an app?" as though the world owes you a 10x. The majority of people are still playing survival, not growth. Therefore, yes, sometimes you have to get off the passive escalator, experiment, fail, and build your way up, and perhaps circle back when you have a higher baseline. Not instructions, only the game board. No one will tell you that it is all mostly luck and endless trial-and-error, but hey, forums are the final place where you can say that aloud

[Despairo]

Yeah I do know, that's why it's cringe when I see motivators or someone talk about Average Joe cam reach financial freedom by only investing from their hard earned money. This also include with Bitcoin, it might be higher than 0.6%, but it's still not that much.

Active income is always better than passive income, having higher active income has higher chance to get rich, but in order to get rich, it's require a combination of both active income and passive income.

We're talking about Average Joe who starting their career, not someone who born from rich parents.

[Samlucky O]

The truth is that not everyone that can comfortably invest or involve in passive income generation knowing how slow and risky it may be at times. Most people are not business oriented and have lost their fund couple of times into passive income business, and now will prefer an automated investment that will yeald a constant profile per month in respective of the low percentage in return in a month.

I will have said that it is good for people to practice a passive income business than automated, but I see that there is an individual differences in terms of business. some will prefer passive income while some will prefer a stable income just as most will prefer to work and get paid and some will prefer self employment.

The choice of anyone to become successful or not, lies in their hands. That's why we have the rich and the poor, do to the choices they made.

[davis196]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

Putting stocks in the low profit margin investment category is a bit of a stretch. Some stocks can generate high dividends and insane capital gains for their owners, while other stocks don't generate dividends(the companies don't generate enough profits to pay out dividends) and their price is going down. Not all stocks are created equal, so please don't put all stocks in one category.
Six hundred bucks a month is 7,200 USD per year, which is 7,2% yearly profit, which is actually high. Most low interest/low dividend investments generate less than 5% per year.
I guess that crypto trading and investing helped in creating unrealistic expectations about investing in general.

[tabas]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

For someone who's got a larger capital, this is way better than making that money sleep on the bank. It's a low risk and low reward ratio but more assured because that's how it works with the real estate rental. But don't just look at the rent and profit, look also at the appreciation of the property.

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

Once they manage doing this first step, then passive income investments start looking more attractive.

I agree, for the younger ones and who can do more. Choose more aggressive returns but not to the point of looking at ponzi schemes and such. Always assess the risk if they're normal and fine. But in today's world, if you're up to the safe side of having the cash, there are safer ways of making money with that amount. Personally, I'll choose to put that into Bitcoin and stable coins, yield with some of it through appreciation and price increase for Bitcoin while I'll look for some opportunity with stable coins that I can take the risk it asks.

[Dunamisx]

Have you ever had the perception passive investments in general (stocks, real estate funds...) generate a very low profit margin?

It stays around 0,6% monthly profit, what means you need 100,000$ invested in order to generate 600$ bucks a month.

This is something already known and there is limit to how we can earn from all these investment plans with stocks and other markets commodities under a centralized system, but now that we are more involved and attached to the era of a decentralized digital economy, bitcoin has provided with more bigger prospect on this than we had over the years in all the aforementioned assets of investments, unlike when its crypto and bitcoin in consideration, where we have no boarder to the extent on how we can go in bitcoin investment to make profits.

[fredericktaylor]

Yeah I do know, that's why it's cringe when I see motivators or someone talk about Average Joe cam reach financial freedom by only investing from their hard earned money. This also include with Bitcoin, it might be higher than 0.6%, but it's still not that much.

Active income is always better than passive income, having higher active income has higher chance to get rich, but in order to get rich, it's require a combination of both active income and passive income.

We're talking about Average Joe who starting their career, not someone who born from rich parents.

You are right, active income is definitely more reasonable than passive income because to make passive income you need to have a lot of money which most people do not have. from my point of view, after deducting expenses from our income, if we invest some amount of money in Bitcoin every month and are patient for 5/6 years, then at the end of the year we will see a lot of Bitcoin deposited in the wallet.

Passive income requires money which not everyone has but if we can save Bitcoin through this process then we can get involved in passive income at some point but this process takes time to reach the destination but it can be safe. this can be an easy way to generate passive income. even if we don't have passive income, we can still be rich or prosperous through active income.

[MArsland]

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

Once they manage doing this first step, then passive income investments start looking more attractive.

Yes it is a risk taking for the current investment era, because our generation will find it difficult to align with old investors in the stable asset sector, the existence of bitcoin and other cryptos is an alternative as long as they are able to manage the right investment budget. Only then can we slowly start to align ourselves with those who have been investing in passive income for years.

[Roseline492]

You are right, active income is definitely more reasonable than passive income because to make passive income you need to have a lot of money which most people do not have. from my point of view, after deducting expenses from our income,

No other type of income can have the same importance of stable income because just the way it comes that's how it plays a financial stability role on the person because with it there will be no lack of source of income, however I think you have not stated well on the context of the things that gives passive income because from what I'm seeing you are saying that before someone could be privileged for anything like passive income they would have to spend a lot of money, actually that's not the way of passive income because you can get it even when you did not spend anything from your pocket because is like a thing gotten with ease.

[peter0425]

For the average investor who is saving pennies or few hundreds of dollars every month on the best scenario, it will take a long time until he reaches somewhere in this financial world.

That is why passive investments are called passive. They are meant to work in the background or on the side while you do something else. Usually, people will invest passively while also working or having a business which is what will generate money for everyday expenses.

Therefore, for those who are starting their financial journey just now, maybe it's more advisable to allocate their funds on non-passive investments, what means they won't have a source of automatic profit, but at least they can pursue superior returns to maximize the potential of their money to generate further monthly income.

If possible to do both, why not? If you are just starting out you can allocate only some amount to investments while you do something else with your time.

[pooya87]

You should also consider the risks involved in any type of investment. On paper it is easy to say using other methods would generate you more profit, but in reality they also come with a higher risk that can put in a loss instead of profit. Even more so if you are not experienced in how to work in those markets.

Take bitcoin market for example. On paper the profit is fantastic. It was only a couple of years ago when price was $3000 and it is now $100,000 so the profit is massive but does everyone make that kind of profit or are many traders lose money in this market?

This is why low profit percent investments including passive ones, are popular. They come with a low risk meaning the chances of your money going poof is low!