Clean and Simple: That’s How I Like My Passive Investments to Be


I’m going to preface this article by saying that there’s nothing wrong with getting your hands dirty.  There’s absolutely nothing wrong with wanting to physically “be there.”  However, when it comes to investing I want no part of any of that.  You may feel comfortable with investments that require time, effort, presence and even thought.  I, however, do not and that’s exactly what I want to talk about today.  Keep in mind I’m talking about investments, not a career.  By investments I mean money you put away for retirement and more immediate money that you save.  So if I want no part of thought, effort or presence what does this mean exactly?  It’s a phrase I call “clean” investments.  It’s not a special phrase or anything like that.  I just couldn’t think of a better word than clean.  Clean investing means that you have to do as little work as possible which basically means once you put your money in you literally do nothing with the exceptional glance at your account once in a while (monthly or even quarterly is good enough).  Does investing like this exist?  Yes, it absolutely does.  Here are the caveats though, if you want to be involved in clean investing you probably want to keep your risk relatively low and even then, know that money is still technically at risk.  If you have high risk the emotional and thought factor may become too great.  So what investments fit my “clean” criteria?  Funny you should ask.  Here are the “cleanest” and simplest types of investments that I know of.

Stocks and Bonds

Not all stocks and bonds are clean investments.  Some stocks and some bonds are too volatile and they take up way too much head space.  If I’m invested in a stock that’s going up and down 10% everyday I simply do not have the discipline to not be affected.  However, when it comes to investing in the overall stock market I’m perfectly fine with a long term horizon.  So if we’re talking investing in overall indexes?  To me that’s about as clean as they come.  As far as my opinions for the safest and cleanest of the safe and clean stocks?  I’d go with any S&P 500 Index.  I’d go with any overall Bond Market Index.  I’d go with any World Stock Index.  And finally I’d go with either a U.S. or Foreign REIT Index.   As far as physical bonds these still exist i.e. treasuries.  Speaking of REITs….

Real Estate Investment Trusts (REITS)

You want to invest in real estate but not manage any properties i.e. not have to deal with tenants, repairs, paperwork, and all that garbage?  Simple, just invest in a company who already does all that stuff.  REITs or Real Estate Investment Trusts are large companies (usually publicly traded) that purchase and manage huge amounts of properties.  They’re known for paying high dividends and having a decently low volatility (though watch out when interest rates change).   You can purchase REITs that specialize in specific types of properties like Healthcare Buildings, Commercial Properties, Residential Properties, you name it.  Me personally?  I just invest in the overall REIT index which covers them all.  You get the same benefits of returns on real estate but no hassle of having to own anything.  The only downside here is that you don’t have the leverage that physical properties have i.e. spending a down payment to own something worth 80 times your investment.  Whatever you spend on a REIT stock or index, that’s what you have, period.  Still though, I love REITs.

Real Estate Syndication Deals

This is kind of like investing in a REIT but it’s a little more managed and a little more private.  In a real estate syndication deal you need to find a group of investors who pool their money and invest into some kind of real estate deal.  For example, a real estate developer is looking to develop a large property and instead of seeking a loan (or if they are raising funds for a loan), they’ll seek out private investors who can help them purchase the property.  In exchange the investors get a percentage of the properties and usually get dividend payouts based on rental income.  The negative here is that your investments are usually non liquid for at least a holding period of 3-5 years but if you have money you don’t need, this is a great clean investment where you literally do nothing but put up money.

Crowdfunding Platforms – these can come in multiple industries.

These are becoming and are already huge on the internet.  A crowdfunding platform is usually a website that raises money in specific industries where tons of investors pool money to fund an investment.  A great example?  Real Estate.  If you want to get your hands on a 500 unit apartment building that you never had access to before, now there are platforms allow you to do so for as little as $1,000.  Let’s say you wanted to invest in a startup company.  There are crowdfunding platforms for that too.  This industry is growing in a huge way.  The pitfall?  Same as real estate syndication deals.  Your money is generally tied up for a while.

Peer to Peer Lending

Ever wanted to act like a bank and loan out money to people?  Now you can.  Peer to peer lending started gaining in popularity about 10 years ago and is now an accepted and almost mainstream vehicle which people borrow and lend money.  I myself have a few thousand invested in one of these types of websites.  The way it works is simple.  Someone seeks out a loan of say $5,000 for home repairs.  The website analyzes their credit, calculated their odds of paying the loan back and assigns them an interest rate on the loan.  Investors can then invest as little as $25 into this loan.  Once the $5,000 is met, the loan is given and the borrower then has to pay it back over a term of 3-5 years.  All the while investors get tiny payments in interest.  The nice thing here is that you can spread your investment over many many loans to reduce risk.  You’ll also likely get a higher interest rate than a savings bank.  The less risky loans usually generate 5-7% and the more risky up to 30% but remember, those are super risky.  Negatives?  Money’s tied up for the duration of the loan.  But all the while your interest payments go into a cash account (or you can reinvest the interest in more loans).


Certificate of deposit.  BORING.  Still though, it’s guaranteed money so you really can’t complain.   You invest your money for a set amount of time and get a locked in interest rate.  The negative?  Rates are pretty low and your money is tied up for the length of the term.  The positive?  It’s guaranteed money.  If you want to make out here then you’ll need a ton of principal to make it worth your while.

Interest bearing Saving Accounts

This is simply a bank account that pays interest each month.  But in today’s day and age there are online options that are paying up to 2.65% which is pretty nice.  Ally Bank and Marcus are good options.   The benefits is that these are very liquid so you can move money in and out whenever you want.

Money Markets

These aren’t all that different from Interest accounts only these are backed by the treasury.  Risk is very low and the only chance you get screwed here is if the government pretty much goes broke or has a major financial crisis.

Private Investments – Angel investing

These are extremely risky but I mark them as “clean” because once that money’s invested, that’s it.  Nothing to do but wait.   These are very tough and very speculative but if you have a friend who starts a business, needs some capital, and you think they’ll make it big, sometimes it makes sense to put a few bucks into it.

Have I missed anything?

Probably but this is a really good start.

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