Here’s the complete tutorial to make $100 Per Day in Passive Income by Investing in Index Funds – Enjoy! Add me on Instagram: GPStephan
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Being able to make $100 per day passively, from an easy investment that ANY can make, is going to take time. The GOOD NEWS is that it’s not difficult, there’s NOTHING complicated about it…but, you’ll need to be okay building this up, and not rushing the process to try to make as much money as fast as possible…otherwise, it’s not going to work.
The first, and probably MOST COMMON approach that most people automatically think of – is DIVIDENDS.
Generally, they’ll range anywhere from 2.5% if you’re buying into a real estate index fund, 1.26% if you’re buying the SP500, 1.2% if you’re buying the entire market…or, if you’re really wanting to GO FOR IT…as high as 7% if you’re ONLY buying a high yield dividend fund. Overall, though – across MOST index funds, you’ll find an annual dividend payment of anywhere from 1.2-2.5% annually, and ALL OF THAT is probably going to be the easiest passive income you’re ever going to make in your entire life.
The second approach to earning passive income with Index Funds is simply – GROWTH.
An investment in something like a Total Stock Market Index Fund is literally an investment that the entire economy will continue growing, businesses will become more efficient, and other people will invest to become a part of that…and, historically, those investments have gone up above 8% per year. If we go back EVEN FURTHER than that, just within the US…throughout the last 100 years, the SP500 has seen a 10% annualized return with dividends reinvested.
And the BEST part with this is that – you won’t be taxed on this growth and profit UNTIL YOU DECIDE TO SELL. That means, essentially, your money continues growing tax free – up until the point where you want to spend the principle. At THAT point, you’ll be taxed at long term capital gains rate…which means, you can strategically sell your investments at different times to make sure you’re in the lowest tax bracket possible.
If you JUST look at this OBJECTIVELY from the perspective of dividends…it’s a lot. If you average a 2% dividend paid to you annually…you’ll need $1,850,000 invested to make $100 per day from an index fund. Now, this isn’t impossible…and, by investing an average of $17 per day…your investment should grow to that amount within 40 years. Bump that up to $30 per day and you’ll get there in 33 years, and if you can invest $50 per day…you’ll get there in 27 years.
But if you invest for a combination of dividends AND growth: assuming that you could periodically SELL 4% of your portfolio every year as passive income…you could achieve your goal of $100 per day by having a total of $920,000 invested in a broad fund covering the entire stock market.
Investing $10 per day will bring you to that amount in 38 years….it’s a long time, I know…but, $10 per day is amount that most of us could do on auto-pilot without given it a second thought – and, by the time you’re about to retire – you will have hit that goal with almost no effort whatsoever.
However, at $20 per day…you’ll reach this goal in 30 years. With $30 per day, it’s 25 years… at $50 per day, it’s 20 years, and if you can swing $100 per day…you’re just 13 years away from making that a reality, and everything after that is purely passive.
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Index funds are a popular investment option for individuals looking to grow their wealth over time. These funds consist of a diverse portfolio of stocks, bonds, or other assets that mirror a particular market index, such as the S&P 500. One of the key benefits of index funds is their potential to provide consistent returns. If you are interested in making $100 per day with index funds, here are some steps to follow.
1. Research and Choose the Right Index Fund: Before you start investing, spend time researching different index funds that align with your investment goals. Look for funds with low expense ratios and a solid track record of performance. Popular index funds include the Vanguard Total Stock Market Index Fund and the iShares Core S&P 500 ETF.
2. Set Up an Investment Account: To invest in index funds, you will need to open an investment account with a brokerage firm or a robo-advisor. Consider factors such as fees, customer service, and user-friendly platforms when selecting a provider. Many brokerage firms offer commission-free trading for certain index funds.
3. Determine Your Investment Horizon and Risk Tolerance: It is essential to assess your investment horizon and risk tolerance before investing in index funds. If you have a shorter investment horizon, you may want to allocate more funds to bond index funds, which are generally less volatile. On the other hand, if you have a longer investment horizon, you can afford to take more risks and allocate a higher percentage to stock index funds.
4. Determine Your Investment Amount: To make $100 per day with index funds, you will need to calculate the total amount you need to invest. The amount will depend on the average annual return of the index fund. For example, if the fund has historically provided an annual return of 7%, you will need to invest approximately $52,000 to generate $100 per day.
5. Automate Your Investments: To stay consistent and disciplined in your investment approach, consider setting up automatic contributions to your index funds. This allows you to take advantage of dollar-cost averaging, which helps mitigate the impact of short-term market fluctuations.
6. Diversify Your Portfolio: Along with investing in a single index fund, diversify your portfolio by adding other types of index funds, such as international index funds or bond index funds. This diversification strategy helps spread risk and increases the chances of achieving consistent returns.
7. Rebalance Your Portfolio Periodically: Over time, the value of different index funds in your portfolio may change. To maintain your desired asset allocation, review and rebalance your portfolio periodically. This not only helps manage risk but also ensures that your investments stay aligned with your goals.
8. Monitor and Stay Informed: Stay updated on the performance of your index funds and any changes in the market. Regularly review financial news, reports, and quarterly statements. This knowledge will help you make informed decisions about your investments and adjust your strategy as needed.
9. Be Patient and Think Long-Term: Investing in index funds is a long-term strategy, and it is essential to have patience. While some days or months may see losses, over the long run, index funds have historically provided positive returns. Stick to your investment plan, even during market downturns, and do not be swayed by short-term fluctuations.
In conclusion, making $100 per day with index funds requires careful research, assessing your risk tolerance, and having a long-term investment horizon. By following these steps and maintaining a disciplined approach, you can potentially achieve consistent returns and grow your wealth over time. Remember that investing always carries some level of risk, and it is advisable to consult a financial advisor before making any investment decisions.
Making money is not the same as keeping it there is a reason why investments aren't well taught in schools, the examples you gave are well stationed, the market crisis gave me my first millions, people shy away from hard times, I embrace them.. well at least my advisor does lol
I lost a piece of my kids college fund listening to this advice
Is there any reason you use mutual funds rather than ETFs?
better to start a small business before you do this..
I rather wait 10 years for 2k a month than take risk and lose 2k a year
Tell me about the fees and how that, works.
Genius I’m going to do this.
Takes too long to actually start until 1:35 minuteish but still watched video
I've noticed a a few videos Graham says the introduction like "What's up Graham, its guys here" LOL
That California sounded personal XD
(05:04) LoL
Yeah anything more than a few years really seems unobtainable to most. It's basically like planning your retirement. I use index funds in place of a savings account. Very rarely have I seen it loose money, and even if it does just give it a month or two for the prices to go back up. It's not making me rich but it beats the bank's 1-2% interest.
Do I want my capital gain to be high or not ?
Still dont see the proof, all talking only about numbers and calculating on apps.. that is useless video just talks, show ur own charts or something how u acumulating money and getting real pasive incomes
I've been investing heavily during the pandemic and I've been making quite a bit of money. Passive income is great since once you've built your nest egg, the money will continue to come in passively. I am focusing on a hybrid of dividend and growth since I think that both routes are really intelligent. All credits to Zach Micah Demers my advisor
1mil to get $100 passively? Don't all you need is just $140,000 to get $1,000 dividend?
Beautiful journey, one that folks really need to watch, your channel has really made my life better. I’m 48, retired a while ago. I have 35% of my capital investments in an IRA, 25% in index funds, and the balance spread across other investment accounts, in cumulative of over $1M. I receive income from my rental properties too. Zero debt and all is going accordingly. my advice for newbies is consistency, that's what separates the rich from the poor, the ability to keep going. Goodluck
I found this at 18. I might just be the rich old dad bod guy on yatch someday
It sounds like daily index funds are received by reinvesting dividends.
Explanatory video, one that folks really need to watch. I’m 50, retired a while at 45. I have 35% of my capital invstments in an IRA, 25% in index funds, and the balance spread across other investment accts, in cumulative of over $ 5M. I receive income from my rental properties too. Zero debt and all is going accordingly. My financial consultant has been patient and has done a wonderful job for me throughout the years.
i lost everything yikes
I actually didn't know about the difference in stock tax …thank you
did anybody else realise he said what up graham is guys here or was that just me?
What's your take on this now? (1.8.23)
Very helpful video on investing in index funds.
what's the best index fund to buy for a beginner looking to make money quick? I'm thinking of signing up for fidelity.
Maybe I kind of missed something in the video, where am I going to get $100 a day to invest, if I was 10 years old, I wouldn't even have $20 a day to invest