The question is about passive income, and, given interest rates, there aren't really any good options. If you're able to generate significant passive income at the ~2-3% rates[1], well, you probably already have a lot of money already, and should just focus on whatever you were doing to get that much.
Way too many comments in the thread branching off yours are answering the wrong question -- "how to grow your money in general" -- which is not the same as passive income.
I'm party to this thread branching of which you speak, but yes, it's predicated on not answering the question and using a principle similar to what you're saying: save, invest passively, and get back to work doing what you do. It's probably as a good a strategy or better than chasing returns in other ways that may also end up requiring a lot of work, depending on skillset, demand, and financial conditions.
I have no problem with people giving that advice, and agree with it myself.
However, if you're going to dispute the premise of the question, you need to explicitly say so and connect it to the alternate point you're making rather than expect readers to see the connection; otherwise, it looks like you're just being non-responsive.
And indeed, that's what the thread looks like now.
But invested money is not really something that creates an income, unless it is really really much, right? Income in the sense of money that you can freely dispose.
The Permanent Portfolio [1]. The plan is based on very simple economic theory, and historically it generates market-competitive returns in the long run with much lower volatility than stock indexes or 60/40 portfolios.
As in the peer thread on stock funds, this plan is not a great income generator because it's designed more for capital preservation and long term capital gains. (Unless you have half a million dollars in there and interest rates are favorable for the bonds or cash holdings.) But for me it's a great way to carve out savings and get some real compounding going. The longest drawdown in the past 40 years is 2-3 years, so I'm comfortable using it with any savings I don't expect to need to use in the next five or more years.
Implementation could hardly be simpler for the robustness that it offers. You put the money in and divide it into four parts. Once a year take a look at the balances and rebalance if any category is too far out of alignment.
For resources, Harry Browne's book mentioned in [1] is awesome for general investment sense and lays out the basics of the plan. Another book by Roland and Lawson [2] goes into much more of the nuts and bolts of implementation using different account types, tax status, and many other factors in individual situations.
Vanguard had very low fee reit index funds. If you want to generate income it is a good option (as opposed to stock index funds) because reits are required to pay 90% of their income as dividends. You can look at all the historical dividend data on the website
I parked some money in a vanguard reit a year ago as an experiment, and to create more of a balanced portfolio. Yes, it has paid quarterly dividends but it's also down -11% in total. So as usual, it all depends...
In terms of throwing off a lot of passive income, they just aren't very good though. Looking mainly at income-generating investments, the best index one might be Vanguard LifeStrategy income (with provides income and moderate capital appreciation to protect against inflation).
The yield? 2.1% Nothing to write home about. [1]
Is there some high-yielding, regular-income fund I should know about? Even allowing for sorta-irregular funds, you probably can't do much better in this environment, though I'd like to be proven wrong.
I found Choosing The Right Dividend ETF [1], which discusses several dividend funds and mechanisms they use to predict which companies will continue paying high dividends. A poster on another forum [2] warned that you should watch out for companies that prop up a dividend and then tank but don't roll out of the index right away. I guess that's where the more conservative filtering ETFs come into play (or you can screen stocks from the index yourself and monitor them).
The chart in [3] shows a few funds against the S&P 500. Prices seem to largely track the S&P index. Maybe there's a way to chart the dividend yield over time, too.
I use betterment for automated investing. It's pretty straightforward, they provide a tech wrapper around vanguard index funds. I agree with their portfolio allocation, so it works great for me.
This is essentially what Personal Capital, Wealthfront, Betterment, etc., do for you. I don't use those services because I enjoy learning about personal finance and I think the work required on my part is pretty easy. Your mileage may vary.
In the past 12 months, I've been up as much as 4% and am currently down 11%. The allocations in foreign stocks, emerging markets, and natural resources are killing me lately.
