Thursday, 23 March 2017

86. Passive income

Passive income.. A legendary dream for most of us, but the initial investment appears to be quite significant. Having passed some good deals earlier this week, a real sustainable income source is still nowhere to be found. But how hard will this be?

Having established that quick money is usually fairy tales, I’ve engaged in putting together a quick calculation sheet to see what re investing actually pulls together.
Taking one of my golden-egg-laying-chickens as an example:


(NASDAQ:PSEC)


Currently trading for 9.02USD, this share has proven to pay out a reasonably stable dividend (yielding around 11%).


Details on the company, and why it is a smart choice to trust them. Actually, having seen their web page, my overall gut-feel ‘o-meter went a bit further towards red.. Crazy what a few pictures and commercial one-liners do to a person’s perception of a company but hey.


Not taking into account any provision to my brokers (or fluctuations in share price and dividend strategy), this share should be well capable to earn me over 5.000 USD per year. After 10 years of consistently reinvesting my earnings of this share only that is.


Time;
A healthy company;
Consistent reinvesting (but don’t burn it all on broker’s provisions!);


The magical ingredients for exponential growth.


What’s your view?