Short question is: if we invest in solid companies' stocks and buy some put options or inverse-index ETF, does it allow us to "let other people run the business for us", and so we can travel, have more "peace of mind", instead of having 3 rental houses and always worry about the maintenance and how the tenants are paying rent, moving out, or possibly some damages to the house?
Some people proposed, if we have 4 houses, and live in one of them, rent free, and the other 3 houses can get rental income, and since usually, rent is about 1/3 of a person's salary, so that means a person can live in a house rent-free, and get the salary of a usual job, and therefore retire.
But this also involves a lot of maintenance or worrying what if the tenants has water or fire damage to the house, what if the tenant doesn't pay rent, etc. Management companies can handle them, but it'd still would be a lot of things to take care of for 3 houses... let's say even if it is just to replace the roof, or replace the water heater every 8 years. It is just a lot of things to worry about.
So instead of us "running the business", how about if we just invest in companies that runs the business for us. Say, if we are to invest in Apple, Google, GE, or Wells Fargo, just some big companies that have decent business and they should know what they are doing, and then buy some put options or inverse-index ETF such as PSQ to protect against big market drop, wouldn't it be a lot more "peace of mind"? Especially, if the companies give out 2% dividend per year, and the stocks are assumed to even just appreciate modestly 3 to 5% (considering we have the costs of the put options or inverse-index ETF).
So suppose instead of having 4 houses, it is
4 x $750k = $3 million of stock investment, then the $3 million with a 7% return per year would be $210k, or at 5% return, at $150k, would be similar to a decent salary already.
I think this has the effect of: instead of us running the business of 3 houses, we let the companies run the business for us, which they do anyways. And nowadays, some companies run their business 8 hours in USA, and then 8 hours in Europe, and 8 hours in Asia, so then it is like 3 persons running a business 24 hours for us, instead of us just one person running a business and can be wearing us out.