There will never be short of debates on passive income vs capital gain. No absolutely right or wrong method.
I like both but treat them differently. My income from stock dividend just forms part of the minimum sum of Yearly Earning Goal.
Yearly Earning Goal = Stock Dividends + Capital Gains
I split my portfolio into two parts:
Passive Investing: Passive Income from stock dividends
Active Investing: Active Income from capital gains.
Passive Income forms part of the safety net if I fail to make Active Income from capital gain in any year.
In good times, the bigger part of the yearly earning goal will come from capital gains due to compounding effects after each successful trade.
Here is the case study and let do the maths. Read more...
[caption id="attachment_1277" align="alignright" width="150" caption="Photo by Jef Poskanzer"][/caption]
Buy And Hold - Is this the best use of limited capital?