Original question from Quora:

What is the best passive investment strategy?

My Answer:

Whenever I hear someone ask for the best or the “one” way to do something, I cringe. Even though this is a well meaning question, it fundamentally misunderstands things.

Allow me to explain…

There is rarely if ever one best way to do anything in life and what is best today will often not be best tomorrow. So, finding the best passive income strategy is a fool’s errand.

Instead of trying to chase the best strategy, only to be switching strategies every year when your financial planner decides to sell you a new mutual fund…

You would be better served learning a few principles of smart investing that can last you a lifetime.

  1. Save 10% of your money and put it into an account that you NEVER TOUCH.
  2. Give 10% to your church, favorite charity, or something that makes the world a better place.
  3. Educate yourself. Do your own research. Most financial advisors and planners are really financial and insurance salesmen in disguise.
  4. Keep your investment costs as low as possible.
  5. Keep it simple. Stick to something like Margaritaville.
  6. Wealth is what you keep, not what you earn.
  7. Keep your cost of living well below your means.
  8. 1 > 0. Any positive return is better than a loss.
  9. The best investment is in making yourself more valuable.
  10. Play the long game.

When you do all of those things in your life and in your investments, you will have plenty to invest, plenty of income to live on, and you won’t feel like your world depends on getting the maximum return.

The truth is, you probably aren’t going to get rich investing in the market. If you are going to get rich, it will be from something else and any money you make in the market is bonus.

-Brian

P.S. I unpack more ideas in Creative Genius.