Passive Investment Ideas - got any others?

[punziekate]

I’m looking to learn success of others relating to passive (or active investing). I’m happy to share what’s worked for us if it helps.

Profile: 39 yrs. 2 kids. Wife at home. Owner of three small businesses. Former fintech / data tech exec; former CA/CPA. Graduated Queen’s U >$30K in debt. Semi- retired with liquid investments and with no debt.

Q - what are the best PASSIVE yielding investments out there? Real experiences only please!

Other Investments (more active than I want - these are very active typically - SKIP as you like this is for background and for anyone else looking for ideas for themselves):

-career - won’t bore you. Moved up fast via sales and then management at a global tech company after hating working as a Chartered Accountant for Deloitte out of school. Last corporate role was as CEO of a 350 person tech company. Became an entrepreneur from there on out.

-leveraged buyout of a small biz. This was after being CEO of a B2B date/tech company. I found a b2b services company in the health & wellness space and bought it for about 4x cash flow. 1x cash down, 1x via the seller lending (vendor take back), and 2x borrowed from BDC (business development bank of Canada - I highly recommend them because while they’re hard to borrow from they are the friendliest $ around and they work with you if there’s an issue). Biz was a TURD. I had to fire 100% of professional staff and 95% of customers. We built our way out of it and branched into new revenue verticals. Today it’s worth 2x what we paid for it, but because it was 5x leveraged, if selling you make 10x (2x value x 5x leverage) less debt borrowed. BDC has been paid back (paid back month 12 of a 24 month balloon note). We have work to do still before we call this one a big success.

-bought and turned around a dying sports injury clinic. Expanded, now am in the middle of possibly buying the building the clinic is in and makes up 25% of (75% rented out on a 10-year lease) —> putting 15% down for a BDC-backed “owner occupied” real estate deal. Creates amazing returns with only 15% down. Yield is >2x the financing % plus we add a doctor clinic beside the injury clinic for added revenue in the retail biz. This is a small project where we will buy a second clinic opposite side of town and rinse & repeat with real estate and fixing the retail biz we buy. More people should consider these. We are buying a $3M commercial building yielding $200K before financing. Putting $450K down this is a big yield annually while you ride possible real estate appreciation while yielding the whole time you own it. Highly recommended if you can keep a little business alive in it as a tenant.

-stocks. I missed out on Netflix in my mid 20s. Was buying call options on them but got scared and never went for it. Missed an enormous return. Learned my lesson and caught the entire ride of Tesla. Even more because I put a bunch into options. Found Square early too, and other tech names I felt would be industry dominators (Opendoor is my next biggest position - they’ll eat residential real estate - IMO only).

-RE - bought a cottage on 600 feet of waterfront on 6 acres 2 hrs north of Toronto.

I have $ in the market but want to have a higher % of my $ in fairly safe, yielding assets that can provide cash flows. I have a little team to do work, find companies, etc, but I’m always in search of other ideas out there.

Any successful stories you care to share? Thx

 

[freezbuy]

@punziekate bought some LCID calls, turned 200 into 6K in an afternoon. Does that count as success?

Jokes aside, folks with your net worth are hard to come by in this sub.

 

[coffeecake67]

@punziekate Write a book for me to read

 

[ennzxooooo]

@punziekate Take a look at Mortgage Inestment Corps. Well managed one will yield 8%. Your choice to take the monthly cash flow or reinvest for compounding.

 

[punziekate]

@ennzxooooo Will check them out. I have tried actually doing private lending but don’t like the personal side of it. Prefer to do via a fund like this assuming they’re good people and not preying on the poor.

 

[sadastronaut]

@punziekate The background info you provided will worsen the answers you get, it’s a distraction.

Try posting on r/Canadianinvestor or someplace else that can provide a bunch of random ideas for you to pick.

 

[punziekate]

@sadastronaut I don’t lost these sorts of things usually so thx for directing.

 

[beemer345]

@punziekate I may recommend r/fatfire for your question.

Anyways I created a lot of wealth through promotions in the corporate world, real estate and stock trading.

I would recommend the S&P 500 index snd also buying higher end (luxury) townhomes / condos to rent. Very passive investments that require little work.

You are correct though, you cannot cheap your way into wealth. Which I see many people here do. Which means be super frugal so one day 40 years I can be wealthy…. That is not Wealth, because when that person gets to retirement they won’t spend it as the frugalness is too ingrained in them. So why not look at ways to build your income as well.

 

[jjp297]

@punziekate Invest in a passive ETF portfolio, get your distributions every quarter, and no thinking or effort required.

 

[punziekate]

@jjp297 Nah. That’s for if you know nothing or want to be totally passive without thinking. I want to think, I just don’t want to carry a bag over my shoulder. I don’t even want to supervise much of an operation. Private stuff. Otherwise public but I’d use low cost leverage and manufacture myself a better yield machine. I know how to do this already I’m just really looking for specific ideas. Thanks. All good.

 

[vb73]

@punziekate It could be argued what you are looking for are not passive investments at all.

 

[punziekate]

@vb73 What I have done is active. What I’m seeking is more passive. A passive asset you control is hard to be as “passive” as say an ETF. But for these purposes I’ll define passive as

 

[resjudicata]

@punziekate Very interesting and thanks for sharing. You don’t see too many decent stories lately, most just people whining and feeling entitled perhaps..

Out of curiosity, what kind of returns are you after?

 

[punziekate]

@resjudicata Yield depends on work and risk. If I can add leverage easily then 5-7% is ok. If I would be investing straight cash then 8-10% ideally.

If I’m actively working on it, I’d want to make a lot more. But this is for larger sums that I don’t want to have blow up on me.

For example (stock example versus the privates I’m more thinking of) I sometimes keep $$ in NYSE:NRZ. Yields 8.8%. Founded by a guy from BAML responsible for some of the MBS debacle. NRZ manages loans and buys them from banks for pennies on the $.

 

[john96]

@punziekate Following

 

[philliphawley]

@punziekate Any other tickers you have your eye on? Great write up, but I'm too amateur to offer any advice.

 

[punziekate]

@philliphawley I have massive positions in Square, Opendoor, and Tesla. @RonMadison11 on Twitter. I go on Reddit less now bc it’s a needle in a haystack finding interesting information. Or perhaps I am bad at searching for it.

 

[freezbuy]

@punziekate what is your take on the whole GME run up and the general meme stock culture on reddit? Have you thought of profiting from this?

 

[punziekate]

@freezbuy I have some thoughts on it:
-I think socially led investment movements are excellent and challenging our corrupt institutionally-dominated markets.
-GME and AMC are both companies with a bleak outlook that are both being disrupted greatly (already are disrupted). I stay clear if these meme stocks bc the end game is ugly. AMC’s CEO is a two-bit pirate who sells shares when he can and doesn’t pay his leases or even try to negotiate…he’s not smart and eventually will blow up. But with the market price so high and with cash it’ll last for a long time. A waste of time. GME is a similar idea.
-market makers manipulate these stocks even more than regular stocks. And hedge funds have tools to better gauge social media sentiment so you still end up losing against the same bad actors.
-I’m not invested in these. However when Goldman was upgrading the fixed income at AMC in the summer of 2020 it was trading at $4-$5 and I bought $7 September calls knowing that they’d at least be able to raise dilutive equity. At this time Gary Black was tweeting about it on Twitter and it caught wind with the Reddit and WSB crowd and it erupted. I made 6x in 24 hours and sold. Could have been a way higher gain but I was putting in real $$ so didn’t want to lose anything. And this isn’t my usual thing so I tend to stick to what I’m stronger with.

 

[philliphawley]

@punziekate I definitely missed the TSLA run up.. going to open a position in Opendoor after you caused me to do some research. I'll look into Square as well! Sincerely appreciate it.