Passive income (242)

A conversation on our excellent community group had me wondering why we've never dedicated a whole Fat Wallet to finding passive income streams outside of investments. It took about ten minutes for the realisation to dawn on me: true passive income is a myth. 

We often talk about side-hustles. "Hustle" is the operative word there, because we're describing a second job. The appeal of working in your free time is the diversification of income streams and the potential to eventually earn your monthly income doing something you enjoy instead of your day job.

True passive income means you work at nothing but capital for the initial investment. It's important to remember capital can be physical or it can refer to your time. We discuss the potential of online businesses and the enormous amount of time required to get any sort of momentum. We talk about rental income, having an Uber fleet and selling products online and in each case talk about the work required to truly make it work.

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Win of the week: Kay

I stumbled across your podcast Sep 2019, via Sam Beckbessinger's book. I binged listened to all the episodes in a rather short space of time.

I got a much clearer understanding of TFSA, and opened one immediately. My fear of stocks (which was more a lack of understanding) disappeared.

Took my ostrich head out of the ground, and looked at my liberty RA. Ouch.  That got shifted out, can't say immediately, but Liberty did eventually let me go.  

I started pumping money into an emergency fund. Life had taken an interesting turn in early 2019, and my income was more than halved. Come 2020 I had an emergency fund, which has saved my ass (or more like my animal's asses....pet insurance is definitely a future consideration with younger animals ) more times than I thought I could possibly ever need to use an emergency fund.

If I had not discovered your podcast before 2020, I shudder to think what may have been in 2020.

Once again, thank you for all that the two of you have done. It really has been life changing.

I have a feeling once I finally retire, and I am able to still drink a fairly decent whiskey, I will think back to the early days of The Fat Wallet Show, and think thank goodness I discovered the podcast.

On a side note, does Simon get to keep all the future donations that will be sent once we all have it made?

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Inge 

I currently hold Ashburton 1200 and Satrix top 40. Now, with SATRIX I am guessing I am not taxed on dividends as these are SA stocks and fall under SARS, so they can't shaft me here.

But do I pay tax on dividends and gains in the Ashburton 1200? Is there any benefit to holding it in my TFSA or should it just be a discretionary investment?

Should do a 50% , 50% split between these two? OR because I have a local RA, do I max my offshore in the TFSA and do a 70 ash / 30 satrix split?

I am torn between putting extra into my bond to reduce the term (and amount of compound interest paid) vs putting money into my RA/TFSA for the future. Currently my bond is also my emergency and travel savings fund.

My current strategy is- 

RA: maintain and only do standard annual increase. 

Bond: pay in an extra 50%, 

I take about the same amount I put into my bond and put 2/3 into a TFSA and 1/3 into an FNB share account.

Do I pump up that bond and get it done, or maintain the current strategy?

Do you have any suggestions of what calculator to use to show someone the value of time in the market?<