passive income versus your day job ... what to do???

I wrote a pretty lengthy comment at MillionDollarJourney, so I thought it would make a good post on its own :-)

Here’s my counter point to passive income: it takes a very long time (or excellent skills or luck) to build a decent passive income stream. Yes you can point to some cases of great success but that’s like looking at rich and successful CEOs: yes everybody can get there in theory, but not everybody will. All that time and energy is wasted diversifying for small returns when specializing on your job would bring big returns (how many bloggers can beat an annual performance bonus at the job for example?) I went through a period of dissatisfaction at my work where I started trying to make more money quickly in stocks and building dividend based income only to realize I was playing with fire and neglecting the real problem: I was not happy at work. I changed position and things started to be much better. I then sold all non-RRSP stocks to pay my mortgage faster. Now I’m happy at work, less in debt and still investing in good old index ETFs (always maxing out the RRSP as well). So I’m trying to generate a higher revenue now with focus in order to have more to invest. Ultimately, I believe that this will lead to earlier retirement (compounding a bigger amount for a longer time with less risk). And as a conclusion: isn’t being happy at work the ultimate form of passive income? :-)

That said, I completely understand that for some people, life balance will be found in seeking multiple income streams. I still blog once in a while but I do it only as a hobby and I find that has made it much more enjoyable. I also don’t expect everybody to agree with me and please bear in mind that I respect your point of view.

rebtel.com -> free your cell phone!

I've found this great web site idea in Business 2.0: rebtel.com ...

The idea is simple: you add a long distance contact on rebtel.com and you get a local phone number for that contact. You can now start calling that person a dirt cheap rates instead of the astronomic fees your cell phone operator charges you. For example, I now pay 2 cents (CAD) a minute to call anybody in North America. The more free local minutes you get in your contract, the better this works out.

It gets even better! The person you are calling can call you anytime at the permanent local phone number they caught on their call display when you called them. You then still only pay 2 cents a minute.

It gets even better!! (warning: read this slowly ..it can be confusing) you can call long distance for FREE on your cell phone (works on landlines too actually) by doing the following:

• use your local phone number for your contact to call them
• they answer
• thell them to hang up before 10 seconds have elapsed at the number they see on their call display
• DO NOT HANG UP
• you will hear a message that tells you to wait
• a few seconds later, you're talking to your long distance contact for FREE

it works well .. I've been trying it for a few weeks now

NOTE: I am NOT being paid for this post and I'm NOT selling anything ... this is only a review of a useful web site and service

link: 20 timeless money rules from CNNMoney

These are good basic rules that one should always keep in mind when dealing with personal finance matters.

And since we're on CNNMoney, out 5 five money fears, here's an interesting one about the fear of being penniless. Some people fear it so much that they hoard cash and miss out on life's pleasures.

Life insurance with work: conversion privilege

Having a baby coming soon to the family, I've been thinking about term insurance (as suggested on Canadian Capitalist for example). I've been getting quotes from different brokers and it's still pretty expansive (almost 100$ a month for a million dollar for the two of us). So I went back to look at what I can get through work. Although I can't get up to 1M$, I still have the option to add up to three times my salary to the existing two times I already have. So I could get five times my salary in coverage. I think that might be good enough if I count my other assets (I'll have to double-check that assumption obviously). I was worried about losing that insurance if I lost my work (and maybe not being insurable by then) but I found this neat little clause in the contract:

Conversion Privilege

All Optional Group Term Life Insurance includes a conversion privilege which allows you, during the 31 days following termination of employment or attainment of age 65, to convert the Group Term Life Insurance to one of a number of Sun Life’s individual policies without providing evidence of good health. The premium would be the same as would ordinarily be paid if an individual policy had been applied for at that time.

Basically, I would start paying bigger premiums directly to the insurance company, but at least I would still be insured. The critical thing is that you don't have to prove you are in good health.

Staying with my work insurance, would save me close to 85$ a month. It's a big enough amount to consider this option very strongly. I've also surveyed a lot of co-workers and many of them are doing only that as well.