People react to incentives, so when Active Income (ie me working for 12 hrs/day, getting on a plane on a Sunday night, dealing with yellers) is taxed at a higher rate than Passive Income, (ie, we watching my portfolio between episodes of Jersey Shore), it only makes sense I start putting more effort in Passive Income.
The most awesome form of tax-advantaged investment is real estate, as I recently discovered. Like the leverage combined with 500K capital gains tax protection (for marrieds, 250k for singles). Leverage + tax advantage => I get it.
For all of administration's attack on the rich, they haven't attacked this tax sanctuary for rich people. Not that I want it to change, I mean, no fair changing the rules once you start playing.
Subscribe to:
Post Comments (Atom)
One form of passive income I've been dabbling in recently is lendingclub.com. You can buy shares in individual loans, and get pretty good interest rates. I know it sounds a LOT like the mortgage bundling that caused the the financial crisis, but I think it's different. For one, it's a lot simpler. Instead of buying multiple shares consisting of slices of hundreds of home loans, you're buying one slice at a time, and you can review each loan and view the rating of the applicant. Also, the loans are not mortgages, they're much smaller -- averaging around 10K.
ReplyDeleteit sounds like prosper. its basically microfinance on high tech. So I get it.
ReplyDeletewhat type of returns have you been getting? how can you avoid people trying to game it with a lot of little transactions and then cheating on a big transaction?