Two More Powerful Examples of Low Expected Stock Returns: LOOK OUT.

This will be a short post but I cannot help but share this with you:

1) Chris Brigthman, Chief Investment Officer of Research Affiliates (no small feat to achieve that particular position at that company), stated recently that over the next decade a 60% large US stock/40% US bond portfolio is expect to return just 4.3% annually, and only 1.3% after inflation! That is crazy low returns.  Investor, take heed.

2) From the WSJ recently, Robert Shiller's cyclically adjusted price/earnings ratio (known as the CAPE ratio) stands at 27.1.  It's long term average is 16.  SIXTEEN.  Crazy high currently. Note the following, and definitely take heed: "today's valuation falls into the top tenth of historical observations, since data from the 1880s. When CAPE is in the top decile, as it is now, the S&P 500 subsequently averages about 4% annually for the next 10 years."

What do you think will happen? I personally only believe there are small pockets of value left.  Otherwise, the only solution is to hold cash, or switch to real estate!

Passive Income Dude

Why Cash Flow is Better Than Big Salaries: An Example from the NFL

I don't have millions of dollars of cash.  In fact, I've probably never seen more than a few hundred dollars of cash together at one time.

But I imagine this picture to the left is close to what MILLIONS OF DOLLARS OF CASH looks like.

Pretty cool.  I'd love to somehow receive a giant lump sum of cash all at one point one day and turn it into wads of bills like this.  I'm sure we all would.  But consider what I just read the other day:

Did anyone miss that? 

78% of NFL players go broke within three years of retirement?  That seems ridiculously high.  And almost 16% file for bankruptcy at some point in the future?  How can that be? Again I ask, how can that be?  And here is specifically why I ask the question "how can that be":

The LOWEST annual salary allowed by the league in the NFL in 2016 is $435,000.  Divide that by twelve, and you get $36,250 PER MONTH!!!!!  How is it possible to go broke within three years of NFL retirement, if you were making close to $36K per month for over three years(!) as an NFL player?

New Page: PID's Mortgages!

Hi all,

I'm excited to share a new page with you titled, "PID's Mortgages".

First, I love the picture to the left because I think it can be interpreted two ways:

1) Your mortgage is literally about to crush you, like an ant.

Or, 2) You are using mortgage debt to make a lot of money and are now Superman proudly showing it off by lifting an entire house, made out of money, over your head.

On this page I will show you why I believe having rental properties helps you achieve the second interpretation. Specifically, I will highlight the major benefits of buy-and-hold rental property real estate, the current market value of Passive Income Dude's rental properties, as well as the current mortgage values against them.

To start, one of the biggest benefits of real estate is being able to lock in fixed rate debt for a very long period of time. Primarily because of the following four key reasons:

1) Inflation slowly erodes your mortgage debt for you. Without you doing anything.  This is the hidden wealth creator of real estate - borrowing whole, real dollars TODAY that become very cheap to repay 20 or 30 years from now. Do not miss this powerful wealth creator.

2) You can highly lever your initial investment, resulting in massive gains over time.

3) Mortgage debt, or as I like to call it, cheap capital for you, is very, very inexpensive to obtain and to lock for decades.

4) Finally, once you 'outsource' your mortgage payment to your tenants, you receive the three benefits listed above and literally have a gold mine investment on your hands that gets stronger and stronger each month.

Let me give you an example of its strength increasing, passively each month:  my 'equity paydown' total, just to show one of the benefits of real estate, has now increased more than $20 per month since the start of this year, 2016.  Without doing anything. To be clear: what I am saying is that every month, literally forever, my equity paydown will be $20 more than it was at the start of this year, without me doing anything, and it will only get bigger and better, each month. Forever. Without doing anything.  Very exciting, and you can follow the same strategy and benefit from it as well!

All of that said, listed below is the current status of my mortgages and home values, etc., in detail:

Note that the 'monthly equity paydown' and 'debt reduced' columns listed above are PER MONTH. EVERY MONTH my mortgage debt is lowered by over $1200, with zero dollars paid for by me - all paid for by my tenants.  What a benefit!

Check out the full page here to see PID's Mortgages in even greater detail.  I'm interested to know what you, as fellow smart investors think?  Please comment below!

Thanks for reading,

Passive Income Dude

YouTube Intelligence: The Strangest Secret, best 31 minutes on YouTube

I just listened again to one of my all-time favorite videos on YouTube.

This one is an audio recording called "The Strangest Secret" by Earl Nightingale, recorded way back in 1950.  If you have not listened to this, you need to NOW. Trust me when I say, stop what you're doing or ensure you carve out some time to listen to this today. It is going to change your life for the better.  There is so much wisdom and knowledge in this short video about becoming wealthy, about goals, and about success that it's almost crazy.  But it is DIFFERENT from all of the other 'get rich' ideas that are out there that are not worth your time.  This is a timeless, foundational classic, video on success that you can't pass up.

Definitely worth your time.



Video Length: 31 minutes of audio.
Video Link: https://www.youtube.com/watch?v=mU_PExRRb38

My review: the best 30 minutes you'll spend (apart obviously from reading the Bible).  But do not think you don't need this information.  Throw some headphones in and listen to it while you work or do some other activity.  Just ensure you do it.  I don't benefit from it at all personally if you do, but I think it will help you if you listen.

You won't be disappointed.



What do you think of Earl Nightingale's The Strangest Secret?

Thanks for reading,

Passive Income Dude

New Page: YouTube Intelligence

Hi all,

I'm very excited to announce that I'm adding a new page titled, "YouTube Intelligence."

Intelligence: The ability to acquire knowledge and skills.

YouTube: Let's be honest, we all know what YouTube is.

Ok, ok, bad joke. Sorry!

So, here's why I just added my YouTube Intelligence page: One of the incredible things about living in today's society is our readily available access to information.  Those of us in the blogging community recognize this fact perhaps, but I would venture to say that many people around the world still take for granted the awesome power that today we can literally learn almost anything via the internet.  And that's partly why I love the definition of intelligence found above.  We can ALL acquire knowledge and skills.

I believe the challenge now, however, comes in finding the critical, useful information amidst all of the time wasting, distracting, and dare I say pointless, material that is also readily available.

As such, I decided to create a consolidated location of YouTube videos that I think are very valuable to your life.  I love using YouTube for learning and growing intelligence, so the videos I chose will be centered around specifically what we care about: investing, dividends, success, motivation, real estate, goals, Financial Independence, etc. 

One thing I will guarantee you is that each video that makes the page will be worth your time. I'll continue to build out this page over the next month or so and into the future.

Check it out HERE.

Passive Income Dude

Income/Expenses: July 2016

One of my favorite posts of the month! It's very personal and helps keep me extremely accountable!

I think it takes a little bit of guts to share your income and expenses openly with the world. But that said, I think there is value for both of us in reading this post. I will do a similar article every month.

Listed below is a detailed display of all income and expenses for the month of July 2016. Much more normal than June, but still great progress.  See what you think!

Me in a Lamborghini!

If you haven't seen Dave Ramsey's "Free Cars for Life" video, also titled "Drive Free Retire Rich", it is definitely worth watching.

I have a few small issues with his video in today's investing environment, which I'll detail below, but overall there are some very sound principles in this video to be successful with how you manage your personal car buying system.

But first, to give some motivation for this post, I wanted to share a picture of me in my favorite of all cars, the Lamborghini Huracan. Yep, that's right, that is me. For my 30th birthday this year my wife got me the best birthday present a man can get (other than getting the actual car) - 3 laps on the track in this sweet, oh so sweet, ride: the V-10 602 horsepower Lamborghini Huracan.

Needless to say, this was a very fast and very cool experience.  So with that experience in mind, here's what I think about the Drive Free Retire Rich video and why you should watch it:

Why Amazon (AMZN) Isn't Always The Best

In this post I am going to explain why Amazon (AMZN) is not always the best.

Pictured to the left is my one and a half year old son with his lawn mower.

Now please understand, his lawn mower is by far his favorite toy.  He loves mowing the grass with dad, and is always asking "go outside, go mow grass?".

So, as a result, I. mow. my. grass. Often.   Read on!

"GATES-LIKE" MONEY. What If You Gained The Whole World?

Over the last few weeks I've really been spending a lot of time looking at other dividend investors' websites, learning from them, trying to rejoin the community after a 4 year break from blogging, and also trying to promote some awareness of my website a little. Let's be honest - it's great to be back in the community of investor/dividend bloggers, and as a result I'm trying not to just sit back in my shell and keep to myself - I'm trying to re-assimilate with some very incredible, motivated people.

Well, this morning I again found myself surfing around many people's websites, just reviewing everyone's July Income Reports (these dividend reports seem to be a standard monthly post for us bloggers, huh?) and after awhile I really started to get discouraged. Some people I saw were making $1K (or even more, in varying currencies) per month while others were just starting out with only a few dollars, or even $100 each month.  Frankly, the specific amounts don't matter because the spectrum of results is pretty wide. Even in the little dividend bloggers community.  

Well, as I was going through this exercise I also found myself starting to compare my results ($587 last month) to all of these other people's results.  Here is where the discouragement started to set in. Thankfully I noticed what was going on with my attitude while I was comparing myself to other people, and that got me thinking about the richest men in the world, and what it would be like to be at that level. Let's be honest, there are times when thoughts like that suggest it WOULD BE REALLY COOL.  These individuals make BILLIONS per month some times.

Here is the Forbes list of the Top 5 richest people in the World currently:

• #1Bill Gates$75 B
• #2Amancio Ortega$67 B
• #3Warren Buffett$60.8 B
• #4Carlos Slim Helu$50 B
• #5Jeff Bezos$45.2 B

And don't get me wrong, I aspire to be very wealthy myself.  But this morning it hit me: Matthew 16:26.  Man. I had to go back and look at it again to read it word-for-word.  It states:

"What good will it be for someone to gain the whole world, yet forfeit their soul?"

A different translation states:

And what do you benefit if you gain the whole world but lose your own soul.  Is anything worth more than your soul?

This was pretty convicting for me personally. Don't miss its power.  The men pictured above can easily have "the whole world." But what if they've been so busy building their own kingdoms here on earth that they lose their souls. Yikes.

Readers, please hear me, riches, dividend income, passive income, Lamborghinis (my personal favorite of the super cars), net worth, rental income, millions, financial independence, mansions, early retirement, billions, all of it is great to have, but what if we miss the point of being here on earth because of our pursuit?

I've never seen this particular Latin phrase in my life, until of course, at another website this same morning (funny how that works out as I'm about to write this post): Memento Mori. It's worth looking up its meaning. Memento Mori. 

Thanks for reading,

Passive Income Dude

Updates to Portfolio Page

Hi all.  Just wanted to let you know in a very quick post that I updated my Portfolio holdings to reflect this month's current data, and to also let you know that I made a decent number of improvements to the Portfolio page itself.  Now it does a better job clearly displaying my portfolio than what I had shown previously.

Feel free to check it out here!

Onwards!

Passive Income Dude

Passive Income Report: July 2016

It is time again for my monthly Passive Income Report.

In these posts I review a summary of all dividends I received, the rental income I received, and any purchases I made from that particular month.

This monthly report covers July 2016.  

I hope you enjoy these posts and that we can learn how to grow our passive income streams and build real long-term wealth together! 

Read More to see how I earned $587 this month in passive income...