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January 07, 2013


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Great post!

So many people get caught up in the dream of living on easy street with "passive income". While it is possible, it is also a lot of hard work to get there and most of the time it isn't as passive as you would like it to be.

I am getting to a point now where I am generating about 10% of my normal wage as passive income, but I am far too reliant on Google for my liking and so I am branching out into other areas in order to become more diversified.

" Whichever the case may be, deep down, I suspect these women would give up everything if they had someone to share their lives with."

Besides ending a sentence with "with", where's the data to back up this claim for all those poor, pathetic, high-powered single people?

as a big advocate and practitioner of passive income principles, i agree that nothing is truly 100% passive. it comes down to what type of work we want to do, how much of it and when - the option/flexibility. lifestyle is a big component as well.

most of what i do today is passive by many means. however i still spend some time daily/weekly/monthly tending to my endeavors - i.e. shuffling money from one bucket to another.

i am happy to see more discourses online on realistic scenarios. the hype is just ridiculous.

Great post! I quit my job about 8 months ago and these are all things I looked at. Truth be told, my wife had started the business 2 1/2 years ago and I left my job to help her manage it as she was getting too much business to be able to do it all. For those that think it's the way to easy street or that you can do whatever you want they're not thinking realistically. It is a ton of hard work and it's all up to you. The thing that makes it so worth while to me is that it's so rewarding. Not of it's really possible though without a solid foundation and structure in place.

If you quit your job you will die alone? Am I reading this correctly? Ridiculous.

seems like some factual errors

Hi Jim,

There were links to my chapter that are no longer here in this post. If I may highlight this link here in the comments on Quit Your Job And Die Alone. It talks about how people underestimate how much it takes to make a sustainable amount of money. Entrepreneurship or early retirement is not easy.



Sunil - I'm with you. The hype to just quit your job and live a life of freedom with no planning, and no runway to build your income streams and savings leads failure.

The whole "lifestyle design" movement was born out of the 2008-2010 economic crisis where folks were getting fired left and right. Instead of just saying they were getting let go, they were making it seem like they left their jobs out of choice and for others to be like them and "follow their passion." Surely, there were some who left by choice, but most did not.

It's important to PLAN and plan some more. Give ourselves enough of a cushion to take the leap first.


Thank you, Jessica! I thought the same thing when I read this. Talk about stereotyping!

Jessica / Brooklyn Money - Probably best not to stereotype people as "poor, pathetic, and single." There are plenty of single people who are doing well in their careers and are rich.

I retired from a 36 year career as an aerospace engineer in September 1992. The first thing I did was to consolidate all of our investments at Fidelity. The second thing I did was to subscribe to a proprietary mutual fund database system that also came with some comprehensive software for comparing and ranking mutual funds. I still use the system every day and for a while I used to go to their annual seminars in different cities and make a presentation on my techniques. This is their website:

September 1992 was a very propitious time for me to retire and to start managing our money. The first reason was that the Cold War had recently ended, my company wanted to downsize, and they offered all salaried workers a Golden Handshake to take early retirement. The second reason was that the government had agreed to allow the DARPA network used by the military to be the model for a network that you all know as the Internet. What few realized was the gigantic impact that the Internet would have on our lives in the years to come. The Internet spawned the DOT.COM bubble and produced one of the most explosive growth patterns in computer related areas and businesses of many types, particularly those that were listed in the Nasdaq and the Nasdaq 100 indexes.

I started managing our $320,000 investment portfolio on 12/28/1992 and on 2/8/1993 I started using the proprietary mutual fund database system that I still use to this day. The first time I heard about the system was from an advertisment in the Wall St. Journal that I started subscribing to after I retired.

By 3/6/2000, thanks to the Internet Bubble, our investment portfolio had grown to $3.3M. The rise had been so fast that I was waiting for the peak to occur and when it did I got out over 4 market days and decided to wait it out by investing in high-yield (i.e junk) bond funds. The next major milestone came in mid October 2007 when my market indicators were projecting a period of severe doom and gloom. By then our portfolio had grown to $5.8M and I made the decision that it was time to move into the slow lane and become a Passive Investor.

I then put our IRAs into 5% CDs and corporate bunds generating tax deferred income. I also put our Trust account 100% into individual municipal bonds generating federally tax free income. As of today our portfolio has grown to $7.2M and is almost all passive income. For 2012 I made 5.3% which equates to about $380,000 of passive income. I do own one mutual fund in our IRAs. It is called PIMIX, Pimco's Income fund, and for 2012 it made 22.4% and had extremely low volatility.

Passive doesn't mean there is NO work involved. I track our portfolio every day and reinvest income as it arrives very predictably, and if a bond or CD matures or is called then I reinvest the proceeds.

What I like about my technique is that I don't have to deal with people. I have always liked dealing with computers rather than with people and that's one reason why I chose not to invest in income property.
I have also never had a losing year with my investments.

@Financial Samurai

I think Jessica was being facetious.


My understanding of the post, while it doesn't state it in a very nice way, is saying that people who have good full time jobs are more desirable than those who decide to quit the fast-paced, corporate lifestyle and live a frugal life supplemented by passive or side income.

I would agree with the statement because most (notice I said most) women/men would much rather pick the well-off and successful person vs someone who decides to live a more frugal lifestyle and be self-employed. I would think it would be harder to find a mate for guys vs girls because many women already want to stay at home and run a household.

Sam, an article with a few anecdotal examples of people who's business plans haven't panned out doesn't equate to "dying alone". One example you give is Adam Baker who is married. I guess I get your point that a failed business owner isn't a great prospective mate in the eyes of many but the anecdotal evidence isn't convincing and the "die alone" bit is pretty extreme and unsubstantiated conclusion. I'm not arguing with your general thesis here but the 'die alone' but is over the top and I don't even know if its true at all.

We all hope that our wife/husband married or marries us for who we are and not just our finances. Sadly this isn't always the case. Either way, if he/she sticks with you during the worst of times, then they will likely be there during the best. If they can not withstand the worst and leave, then you are probably better off without them anyway.

It is one thing to take a calculated risk and it fail and times be tough, but as long as the family has the basics covered then where is the harm? If the spouse is unhappy that they cannot drive the newest car or live in the biggest house on the block because the risk did not pan out then that person did not understand the risk to begin with. There is much to be desired in dreamers and entrepreneurship, people who diligently try to make their lives better and by their own means, this is why even those people don't always "die alone".


Sam's point was that there are a lot of people who see full-time bloggers "making a ton of money" with their websites, when in fact their finances are not ideal. The truth is that very few make money and probably work a lot more than 40 hours a week. Far too many bloggers have the opinion that those of us who have traditional jobs are foolish for "working for the man" and really hate our lives. I constantly read about bloggers who are beside themselves about their blog and seem to think they will eventually be able to quit their day job and become rich. They rave about how they are now generating passive income when in fact they spend more time on their blogs than I do at work, including my commute. They also "roll their eyes" when I state that I could not be happier at my corporate job as if I must be lying. I guess if blogging makes them happy, that's great. For the majority, I don't see how being self-employed is viable.

There are pros and cons about both corporate and entrepreneurial careers. I've seen a bit of both as I have my own side business and also work in the mainstream corporate world. Corporate benefits are one example of being an employee that are often underappreciated until they disappear or we lose them. Plus there is usually always someone available to cover for us if we are sick or want to take a vacation. As an entrepreneur one has to find and pay for benefits entirely on their own and if you want to take time off, sure you have flexibility but your work will all be waiting for you when you come back.

I think you cover a lot of great points Sam. There are a lot of things to consider before any career change and being an entrepreneur is fun but also incredibly hard! And yes there are so many more taxes! (Esp in California)

Noah, I get the idea that self employment is challenging. But the article Sam pointed to in response to me is actually titled "Quit Your Job and Die Alone". I am questioning the "die alone" part of it. I don't see how a failed blog means you'll die alone. Plus 3 of the bloggers Sam points to are married. Thats an even worse argument.


Good point! I didn't even read the title because the link read "quit-your-job-and-self-destruct-like-an-idiot". My mistake.

The issue I have with the "Die Alone" section is that it reads as if career-driven women are pathetic because they're clearly so single and lonely. But in the very next paragraph, in the same section, the writer seems to switch gears and say that leaving the workplace or transitioning will lead to loneliness and dying alone because a potential mate wants a confident, stable, monied partner.

I don't want to misread here, but I think the advice only makes sense if you read it as applying differently to men and women. Ladies, don't be career driven because you'll end up alone. Gentlemen, don't leave your jobs without money/a plan/whatever because women won't date guys without money.

Survival of the fittest means rich guys always get the girl? Really? What's the point of being anything but alone when you think so little of your potential mate?

If I've misread, please someone correct me.

Thanks for sharing this exert. I'm glad to see this book looks at both sides of the coin and gives a fair shake towards the reasons why this may not work out for everyone. Too often I read blog posts or books that make it seem like any idiot could be a millionaire or write a successful blog or rent out apartments or whatever. But that's just not in the cards for everyone, and I think we all need to take a serious look at ourselves before we make these kinds of life-altering decisions.

Hope everybody got to read the latest post on FMF arguing the other side.

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