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Buy payphones and retire

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Re: Buy payphones and retire

#81

Post by markus_zhang »

notatoad wrote: post #65
andrewla wrote: post #57

The concept of "passive income" is almost a scissor concept. Or maybe only if you couple it with the categorical imperitive. On the one hand, it's so obviously true that it would be great to have passive income. Draw the salary you're drawing now, with some growth, and not have to work. On the other hand, if everyone had access to this capability then society and civilization would grind to a halt. People make things…

"passive income", in it's original iteration, wasn't the idea that you could make money by doing nothing. The idea was that you made something or did something that you were uniquely able to make or do, and then the result of your labour would make money for you while you put in minimal continued effort. the version of passive income where you don't do anything productive at all, ever, and just put up some initial ca…

Yeah, nowadays "passive income" is basically debt interests (like bonds) or rental income, both of which actually need a lot of work.

I rarely traded financial instruments so cannot say for that, but as a small landlord I wish I never entered the business. Like, all businesses need initial investment AND a lot of continuous effort and learning, and are probably boring (or VERY barricaded) because otherwise people are going to swarm in. I need to know the market, the laws and regulations, and some other stuffs, most of which are extremely boring and not really "hackable" (as for hackers) because accountants and governments already sorted everything up to make sure it's hard for small businesses to evade tax -- You can learn which parts are expenses in an afternoon, and then you have to deal with a lot of headaches.

I know some people who own gas stations and large depanneurs (in QC they are independent convenient shops), which are luxurious on face, but they either have to pick a remote one (away from competition from supermarkets) or/and work 7 days without hiring an extra hand. They grind for 10 years and sell the business when time is good.

Re: Buy payphones and retire

#82

Post by potato3732842 »

maxwell wrote: post #27
stult wrote: post #18

Earlier quoted context omitted.

It's easier to launder money with services than goods anyway because you don't need to dispose of excess merchandise to make the books balance. Like if you want to claim to have sold 10000 cans of soda despite only selling 1000, you need to buy 10000 cans of soda or even the most superficial review of your accounts will reveal the scheme. The ideal laundering mechanism is a service with a high ratio of price to varia…

I was thinking the other day that self-storage facilities seem ideal: you don't even need to account for discrepancies in utility usage, as in missing water at car washes and laundromats. Just say units are rented and paid in cash. Not aware of any KYC laws but haven't looked recently.

There are no KYC laws for self storage because it's already standard practice so you can sue the person who pays cash for one month of storage and then crams the locker floor to ceiling with hazmat.

Re: Buy payphones and retire

#83

Post by markus_zhang »

andai wrote: post #75
notatoad wrote: post #65

Earlier quoted context omitted.

"passive income", in it's original iteration, wasn't the idea that you could make money by doing nothing. The idea was that you made something or did something that you were uniquely able to make or do, and then the result of your labour would make money for you while you put in minimal continued effort. the version of passive income where you don't do anything productive at all, ever, and just put up some initial ca…

>just put up some initial capital in exchange for even more money back Isn't that how index funds work?

People believe in index funds because of multi-decades of globalization and (in general) cheaper money, which has been less and less true since 10 years ago.

Even if you bought some during the 90s, you still need a tremendous belief in yourself and the market to hold them for 30 years. It's not that easy. I know many people put the fund into a retirement fund, but 1) is every body consistently doing that for 30 years? and 2) what if the market sucks when you retire?

I still think that's not a bad idea, maybe one of the best for lay persons.

Re: Buy payphones and retire

#84

Post by shnock »

hifromwork wrote: post #78
notatoad wrote: post #65

Earlier quoted context omitted.

"passive income", in it's original iteration, wasn't the idea that you could make money by doing nothing. The idea was that you made something or did something that you were uniquely able to make or do, and then the result of your labour would make money for you while you put in minimal continued effort. the version of passive income where you don't do anything productive at all, ever, and just put up some initial ca…

>just put up some initial capital in exchange for even more money back, is always a scam. some people might come out ahead sometimes, but more people will lose than win. How so? My all-world index funds are doing pretty well. For more risk averse, almost every buyer of USA governmental bonds gets "even more money back" in exchange for the initial capital. I don't think that's a scam either.

Not everyone can buy USA bonds. Is the population of winners and losers all humanity?

Re: Buy payphones and retire

#85

Post by apeescape »

andai wrote: post #75
notatoad wrote: post #65

Earlier quoted context omitted.

"passive income", in it's original iteration, wasn't the idea that you could make money by doing nothing. The idea was that you made something or did something that you were uniquely able to make or do, and then the result of your labour would make money for you while you put in minimal continued effort. the version of passive income where you don't do anything productive at all, ever, and just put up some initial ca…

>just put up some initial capital in exchange for even more money back Isn't that how index funds work?

It's not guaranteed that you get more money back from an index fund (unless you've found an arbitrage, but that's a corner case). Even the bigger and stabler indexes like the S&P500 have their ups and downs, both on a daily level but also over longer time spans. The long-term trend has been positive for these types of indexes, but remember that past performance doesn't guarantee future profits :)

Re: Buy payphones and retire

#86

Post by nostromo »

hyperhopper wrote: post #38
0cf8612b2e1e wrote: post #19

Earlier quoted context omitted.

I have also heard that vending machine locations are highly contested. You can buy the machine, but you are not going to have the pull to deploy it at the airport. Those contracts were signed long ago.

Then why are there so few? And containing such a small variety of goods? In Japan anywhere from a busy subway to a remote park, there will be rows of vending machines everywhere, with more varieties of sodas, coffees, soups, ice creams, candies, hell even clothes or meat! And those are just the common types. You're never far from what you want in an automated fashion. Why are we so behind in America when there seemin…

Crime and theft is why.

Japan has a whole host of nice things we can’t have in the US because we let bad actors run wild.

Re: Buy payphones and retire

#88

Post by warner25 »

WalterBright wrote: post #72
ChrisMarshallNY wrote: post #47

When I was a kid, we stole a payphone. Those bastards are tough . We whacked on it for an hour, with a 15-lb sledgehammer. When it finally broke open, it yielded about $1.50.

I once had a storage unit, and lost the key to the padlock. The manager said no problem, and we went to the unit. He pulled out a battery operated angle grinder, and cut through the hasp in a few seconds.

This reminds me of storing equipment and supplies at the platoon level in the Army. The Army owns a huge number of shipping containers, like they're pervasive on any Army base, just part of the landscape. Basically every platoon keeps most of its stuff in these containers instead of proper buildings (minus weapons and ammunition, unless deployed somewhere, and then the shipping containers become arms rooms too). It also just makes it easier to deploy all the stuff, because it's already loaded up to go. Anyway, they're all "secured" with padlocks. Because of personnel turnover and poor bookkeeping, the right keys always seemed to be missing, so every platoon also had a set of bolt cutters. The padlocks were constantly being chopped off whenever people needed to look for things, conduct an inventory, etc. and then replaced with new padlocks. Taking a step back, it was crazy and didn't instill much confidence.

Re: Buy payphones and retire

#89

Post by seizethecheese »

andrewla wrote: post #57

The concept of "passive income" is almost a scissor concept. Or maybe only if you couple it with the categorical imperitive. On the one hand, it's so obviously true that it would be great to have passive income. Draw the salary you're drawing now, with some growth, and not have to work. On the other hand, if everyone had access to this capability then society and civilization would grind to a halt. People make things…

> The categorical imperative roughly says that something is moral only if its universal adoption would benefit society.

Really? I actually don’t think that’s right at all. For example: nobody should be a philosopher, because if I everyone were, society would collapse. Surely, Kant did not believe that.

My understanding is that the categorical imperative is more like: it’s only moral if you would accept a random roll of the dice into any of society’s roles. In this case, I’m not sure society would be better off if passive income did not exist, but perhaps it should be “earned” passive income, in the entrepreneurial sense, rather than just pure rents for high status people.

Re: Buy payphones and retire

#90

Post by SirMaster »

markus_zhang wrote: post #81
notatoad wrote: post #65

Earlier quoted context omitted.

"passive income", in it's original iteration, wasn't the idea that you could make money by doing nothing. The idea was that you made something or did something that you were uniquely able to make or do, and then the result of your labour would make money for you while you put in minimal continued effort. the version of passive income where you don't do anything productive at all, ever, and just put up some initial ca…

Yeah, nowadays "passive income" is basically debt interests (like bonds) or rental income, both of which actually need a lot of work. I rarely traded financial instruments so cannot say for that, but as a small landlord I wish I never entered the business. Like, all businesses need initial investment AND a lot of continuous effort and learning, and are probably boring (or VERY barricaded) because otherwise people are…

Rental income doesn't need any work if you are just an investor though.

I don't do a single thing. The people who are managing the deal are the ones who do the work and hire the workers to work on site and such. They of course get an even better return during the sale, but I am happy with what I get for doing nothing.

My rental properties are paying me a decent passive income of about 6%, and additionally the total investment about doubles in roughly 5 years. Also the tax advantages are pretty huge with the depreciation and the ability to take the money from a sale and put it into a new property with no tax.

So say you start with an initial $100K investment. That pays back about 6K a year for 5 years and then turns into about 200K after 5 years which you then put into a new property and make 12K a year, and so on and so on.

So if you start with 100K when you are say 25, then when you are 50, you will have around 1.6M in property assets making you about 96K a year in passive income, where the depreciation on the property value and the assets in the property outweigh the tax on the income, so that income is all tax free. And that calculation is assuming you don't put even more capital in from some other source. Of course it's a roughly average return assumption. Some properties will do better and others will do worse, but it's been my experience that it's about right.

Of course this is only one of my investment baskets. I allocate roughly half of the income that I can invest into real-estate like this and the other half into low cost index funds.

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