Looking for advice for newbie investor

[Nikki Ruble]

I am a newbie investor and looking for guidance. My goal is to have $11,000 or more in passive income per month in the near future. Any recommendations on doing that with $1,000,000 in cash to invest? I currently have one STR that nets $2000 per month. I am open to long term rentals, STRs, stocks, etc.

[Scott E.]

$11,000 per month in passive income is $132,000 per year, meaning you need a 13.2% cash on cash return on your $1,000,000. That's pretty aggressive, but it's possible in some markets.

The tricky part about this goal is you say you want passive income. 13.2% is going to be very hard to achieve passively.

In real estate, the most passive you can get is going to be NNN commercial deals that are locked into 5+ year leases. But with those offering such attractive lease terms, the cap rates run lower (5-7% in my market).

In stocks, there are some funds like IEP or QYLD that pay dividends close to your target, but the share values decay over time. So I would not recommend somebody dump more than ~10% of their net worth into a fund like this.

Plan to diversify, and as you start pursuing deals I think you will learn that you either need to

  1. Be open to being more of an active investor if you want such a higher return

     or

  2. Be open to a lower return if you want true passive income