Passive Income – Your Secret Weapon To Financial Freedom
When you generate Passive Income you put your money to work for you.
This may be more important as you approach retirement. But keep in mind that retirement is more about a state of mind than an age.
Passive income generates income without activity on your part. Active income requires your effort to generate the income.
Rental properties and many Private Free Market assets are good examples of Passive Income assets. You own the asset and you receive income generated by the rental property or other asset.
A job or traditional business are examples of Active Income. Each requires activity to generate income. And if the activity stops, so does the income. Even professionals, such as doctors, dentists and lawyers, require activity to generate income. They just happen to be paid more per hour than many others for their effort.
When you manage a rental property this is a form of active income, not passive income. It’s really just another job.
Our goal is not to get you another job, but to show you how you can profit from passive income generation.
Passive Income frees up your time so you are no longer getting paid by the hour.
This concept is so powerful that many people miss it. It is truly the Key to Financial Freedom.
Most people look at retirement as an age rather than what you do with your circumstances. We would like to challenge your thinking on retirement to look at it differently and see the possibilities.
How do you view retirement?
-Is it based on someone else’s idea of retirement or are you open to other possibilities?
-Passive income generation may allow you to retire earlier than planned. How would this change things for you and your family?
-What will you do with your retirement? What plans do you have?
-Do you intend to stay active by starting a business, volunteering or traveling?
Your retirement doesn’t have to be about an age if you invest wisely. Many entrepreneurs consider themselves to be retired when the leave their jobs, even while they are still working by building a business, doing something they enjoy.
And one of the benefits to entrepreneurship is you can choose when, how and where to build your business.
Sources of Passive Income
Passive Income can come from several sources and here are some of the best ideas to get you thinking:
-Investment real estate (turnkey cash-flow rental properties)
-Private Free Market investments (part ownership in a private business, private lending and private equity funds are good examples)
-Non-traditional business ownership (as opposed to a hardware store, restaurant or professional firm that produces no income unless you are there – these businesses are more like jobs as they require activity to produce income). Non-traditional businesses can often be scaled independently of your time and effort to produce unparalleled results.
So the type of passive income that will work best for you depends on your desires and situation.
For many investors like you the right kind of Passive Cash-Flow Real Estate may be the best asset for passive income generation.
In fact, we have found that turnkey cash-flow rental properties will form the best foundation of your portfolio.
But you should also round out your portfolio with other Passive Income producing assets.
Diversify With Multiple Income Steams
Cash-Flow Rental Properties can provide you with income of 10-12% per year or more and require no management on your part. There are a few pitfalls to avoid, such as finding the right partners to rehab the property and manage it. This is often where most real estate investors fail, but we can provide access to experienced teams that will maximize your cash-flow with quality properties and little up-front effort on your part.
Private Free Markets (PFM) are opening up new opportunities for most investors. Prior to passage of the JOBS act in 2012, you usually had to be an accredited investor to participate in PFM transactions.
The JOBS Act is changing that, especially as the next phase kicks in in May 2016. Now, nearly any investor can invest in private businesses, lending, commercial real estate and private equities. The next few years will be exciting to see as these new opportunities expand investment options.
Business ownership requires a great deal of effort and learning curve before most people find success, but it can also be the most rewarding. It just depends on whether you are willing to pay the price.
The good news for you is that the internet has leveled the playing field for entrepreneurs. So now nearly anyone with some drive and entrepreneurial spirit can succeed with less investment than ever before.
Wealth vs Riches
The difference between Passive Income and Active Income can also be the difference between Wealth and Riches. The key is ownership as this example illustrates:
Kobe Bryant played basketball for the LA Lakers and made over $30 million per year. For the most part, Kobe Bryant’s income was Active, because if he stopped playing (at least for a long period of time), he would no longer be paid. His playing is his Asset, which requires Activity to have value.
In contrast, the owners of the LA Lakers, Jim and Jeanie Buss, made a profit on Kobe Bryant’s playing. And the Busses profit whether or not they have any direct activity with the team (Kobe Bryant also makes a profit by being paid a salary – profit is mutually beneficial in a free market).
So whether Kobe Bryant played or not, the Busses still made a profit (whether it goes up or down is not the point). As owners, the Busses make Passive Income from the LA Lakers, their Asset that generates the passive income.
In 2013, the Lakers had an Asset value of $1 billion with profits of $48 million. So not only did the Busses generate Passive Income of $48 million (after expenses, of course!), they also own the Asset worth $1 billion.
So Kobe Bryant may be Rich, but the Buss family is Wealthy and the key to wealth is ownership. See the difference?
After retiring from the NBA, Kobe Bryant when on to start his own business, Kobe Inc. I don’t know how successful he is, but maybe you can see how owning Passive Income producing assets is one key to financial freedom.