What's up BFI,

I'm a 26 year old guy that has dabbled a little bit with investing, and I'm trying to learn more about all the different options out there. The problem is, I only really know about the traditional forms of investing (i.e. real estate, stocks, etc).

I'm sure there are different types of investments that people have made with their money, and I want to hear more about it. Have you put money into a high-risk business that paid off? Have you invested in a friends startup? Did you buy a piece of land in some third-world country? Just looking to hear a bit more about the non-traditional investment vehicles out there.

So, without further ado, what passive income investment in your life has paid off the most???

I'll start off to show the format:

What did you buy? Joined a friend's startup, bought stock options (private company)
How much did you buy it for? $10k
How much did you sell it for? $33k
What was your reasoning behind the purchase? The company was doing really well and I felt that the price of the stock was almost certainly going to increase. $10k was a big part of my roll but I was pretty confident that I would someday see that money again.
What was the biggest lesson you learned? That the people who work for really fast-growing companies have an opportunity to increase their net-worth really quickly if things go well for said company.

I bought a bunch of books to read and learn. I probably got 1000x return from these books.

Moral of story? You're 26. Invest in yourself until you're the most competent guy you know. Once you have a lot of money, put it in an index funds. That's probably the most effective way to achieve a massive amount of passive income.

Also, there's nothing passive about passive income. There's tons of work in the beginning that no one wants to read about.

For example, I've built a few cash generating vehicles that give me a decent monthly income and I rarely do anything. Yay, 4-hour work week ftw. However, before these projects become cash generating vehicles, I put in a lot of time and effort to learn and then execute and got lucky. But who wants to hear that.

Yeah, i understand that "Passive" income isn't really "passive," but it was just the best word to use to describe the type of situation I'm describing. Basically any way that makes money that doesn't require constant focus (like your day job).

Also, not really looking into index funds- as mentioned in OP, trying to look into more non-traditional routes, even if they are higher risk. If anything, I just want to hear about some people making decent money off of things that I never would have thought of.

+1 for passive income is bull****.

There are very good hourly rates though, it's possible to achieve $1k+/hour with a lot of flexibility in terms of picking it up and putting it down. Most things will decay if you don't touch them for for a month or more. Most investments pay off more substantially the more you've put in to learning the space.

I value flexibility and enjoyment of my work over the actual hourly rate which is line with the idea of passive income IMO. I actively try and create processes around my opportunities and delegate.

The biggest payoff I've had in my career is learning how businesses work on the internet on a very deep level. This has led to lots of jobs, projects, opportunities to invest in great spots.

So your going to mention you read books that you figure you've gotten "1000x" return from then not mention what they are? C'mon bro

Nice post. Do you think you could expand a bit further with an example?

Too many books to list. Here's a list on my dormant blog: http://www.onegeargo.com/reading-list/

Practicing what you learn is key though. Don't be an armchair quarterback. Put your money where your mouth is. Be aware from advice that don't.

+1!!!!!!!!!

I bought real estate because I wanted to make more "passive" money then my bills were (aka robert kiyosaki's get out of the rat race board game style rich).

What I learned? Real estate is NOT passive. There isn't a day that goes by that I don't have to deal with some bull **** drama. (the upside, the returns are better then one originally thinks, because 90% of people in real estate are fish, so getting above average returns is easy)

How are people in real estate fish that helps you earn a higher return? Do you exploit them by having them overpay for your properties or what?

So towards the end of my poker career I started trying to launch "internet businesses" things like MFA sites (made for Adwords), usual affiliate sites, things like that. I learned a good amount about SEO and the building of websites but they all inevitably failed, I mostly just lost time though.

Eventually, I realized poker was ending for me and that the opportunities I liked were drying up and so I left officially to take a job at a small website getting an entry level job involved with the website (off the back of my personal project experience).

It was a pretty big hit to the ego from playing poker, this job was a step above minimum wage but I took it seriously. The real value though is that I got access to real world problems with websites, how businesses think about their websites and most importantly why valuable changes to websites don't get made. I also taught myself to code from scratch.

Around the one year mark (I had it in my head one year was a critical minimum for a resume) I started looking for my next position. I got hired by a well respected SEO agency moving from Las Vegas to NYC and finally was being paid well. This is where everything took off, two of my coworkers in this newly opened NYC branch of our agency were just incredible business talents (one now in the laudable Google Creative Team, the other an exec at the agency).

Basically, they helped me take my technical skill and start applying it in business situations. Pitching, selling, negotiating, building business relationships. After about 12-18 months I was really confident in the space, I had worked with hot startups, Fortune 500 companies, international brands and everything in between (super profitable niche medium sized businesses).

It's progressed from this point and now I have an understanding of what makes a profitable business operation. How do you structure teams, how do you structure their interactions and what metrics should be used to judge performance. And what you can do with that is really boundless.

So far, I've received very big job offers, investment deal flow, partnerships of every sort. A lot of them I've had to say no to because I don't want to work 80 hours a week but I've made more money every year by multiples so I'm happy with the progress.

I'll continue to build a team to help me take advantage of this access I've received and I'll continue to focus on growing my access to bigger and more valuable problems.

I got lucky lots of times throughout this story and made plenty of mistakes. The key I think has always been a flexible mindset. I have no restrictions on what I'm willing to try, work on, learn. If something I invested a lot into fails I usually feel the knowledge I gained compensates for it because I choose where to put my energy carefully. Every time I do something new I try and do it better or else make it a process and focus my energy elsewhere.

Bought Goldman stock at $40 a share during the banking crisis.

There's tons of ways.

1.) If their marketing of vacancies is worse then mine, I'll snatch up the quality tenants before they do.

2.) If they don't keep their properties well maintained their quality tenants will leave and come to my properties.

It's the free market. If my competitors are inferior, there's thousands of examples I can give.

Each landlord is pursuing a strategy that plays on their strengths, and fits into their overall life goals. No one is necessarily outsmarting anyone. They're just playing a different game.

This is basically why RE is so easy to get started in. New entrants are often playing in the kiddie pool, they can always outwork the pros (sweat equity), and take on deals that don't make financial sense for bigger guys with more overhead. The biggest potential problem is liquidity (which is usually where your day job comes in.) And if you get sick of it, you can often/usually exit without taking any financial loses. (unless your strategy was highly leveraged and/or highly speculative.)

It's not like the financial markets where there are huge pools of people going after the same money with similar strategies and essentially the same information.

bought house for 140k
40k deposit with 100k mortgage
10k renovations
14k rental income
6k mortgage bill

=
win

Domain names.

Like others have said, it was a lot of work getting to the passive part, but it's passive for me now, for the most part.

This is pretty interesting.

1) Could you explain how you got into bidding for domain names?
2) What would you recommend for a beginner?
3) How much money do you need to start this?
4) And how much did you put in before you started making money?

I go to urgent care clinics, community health centers, and doctors offices all over the big city I live in and I distribute free prescription discount cards to these places. The cards don't expire and can be used unlimitedly. Everytime someone uses one and saves money I get 2$ per claim.

It is a pure volume play and the thousands and thousands of more cards I get into the marketplace the bigger my checks keep getting. I consider this as close to passive income as passive income gets. Once the cards are out there they do the work over and over. Obviously I do need to keep working because there will be attrition, and it is a huge grind when driving everywhere.

Somehow I found namepros, which is basically 2+2 for domains.

Head over to namepros or dnforum then read and read and read and read some more. The longer you can delay buying a domain, the fewer rookie mistakes you'll make.

There isn't really a minimum. You can buy a domain for $9.

I don't know the answer to that but it was probably in the ballpark of $10k. I'm not playing the $9 game though. The domains I buy and sell are nearly always $1k or more.

The question you didn't ask, probably because you didn't know to ask it, is which niche in domaining am I operating in:

I buy domains that get natural traffic and monetize them through domain parking. Finding good ones for a good price is not easy - but it's the most passive form of investing I've ever found. After I buy them, I do literally nothing other than renew the domains each year. Optimizing them is even automated (with Above.com).

You'd think these 2 would be obvious. I think what OP had in mind was how specifically are they making mistakes in regards to the buying/selling process and how do you exploit them?

Bitcoin - thought it was interesting.

Learned not to day trade an asset that has a tendency to go up about 1,000 percent a year.

Please start a thread on this I'd love to at least learn the basics and hear your insight

If that $14K is gross rental income, this actually isn't a great deal. You'll spend between 45-55% of that income on expenses/vacancy/rent-loss/capex, leaving you with $6-8K in net operating income (NOI). Subtract out the $6K in mortgage, and your cash flow is no more than $2K/year.

You've invested $50K into the property, so your $2K cash flow represents a maximum 4% cash-on-cash return. You can get almost that much in a long-term CD...and it will compound for you, unlike the real estate cash flow.

Where are you putting your money in for the next Bitcoin? =P

If hes making money then hes someone who can be learned from- and that hes suggesting 1K names and not coupon code domains suggests he at least knows something- but one signal that his insight might have weaknesses is that hes suggesting Namepros, which is not a place where you learn to win at domain name speculating.

This is also a pretty turbulent time in that game since there's divestiture going on given model shifts that have occurred (in parking, type-in traffic and people getting ahead of market changes that may occur with the new TLDs weakening the lower end of .com domains that used to be 'speculation grade' once upon a time but may not be anymore)

Its a complicated game and a minefield of bad advice, including from some dumbasses who bought prime stuff in the 90s but retain very anachronistic perspectives on how to succeed in domain speculating now, in the year 2014.

A really good parallel we can all relate to would be people who won at poker in 2004 but are losers in 2014 now that the game is vastly more efficient. Basically the exact same thing happened in domain speculating. The game really changed but a few 'old heroes' don't realize it. I did it successfully on the side from 2004 to about 2009, made money but quickly realized that the sort of people who are cut out for successful domain speculating now are going to be smart enough to be successful at much, much more lucrative stuff. Its not like it was in the 90s when all you had to be was a relatively shrewd bum.

Buy silver regularly....

The silver/housing ratip is wwwwwaaayyyyyy too high. It is like 5 or 6 thousand ounces of silver to buy a median priced home outright. Wait for the next inevitable housing collapse. And scoop up a bunch of properties outright for 500 to 1000 oz of silver when that ratio goes down.

Rent out and sit back and drink pina coladas.