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Imagine if you just had two individual sources earning you $250 paychecks ($500 total) each month with no doing additional work. And these sources simply paid for your automobile expense.
Perhaps you have beaten this concept to departure at this point Great. Rich Dad Poor Dad tattooed this concept onto my brain. The concept is exactly what Real Estate Investors predict Cashflow.
Again, I understood that I DID NOT want to become wealthy when I was 65 when it cost me my life during my younger years... I'd rather have a healthy amount of money coming in each month from various sources and retire early. Or at least do WHATEVER I wanted after the military without having to consider the paycheck coming from my new hobby, job, or even occupation as a portion of the equation.
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Both conditions"residual income" and"passive income" try to capture the identical concept of,"making money automatically." For the sake of brevity, I will only be using both terms interchangeably.
After hearing the words"passive income,", many of us immediately start having romantic visions of lounging on a yacht in the Caribbean Sea and occasionally checking our growing bank account. You immediately snap into it, have a sip of your Monster Energy drink, and try to stay awake while on your 24-hour duty at the barracks. .
An asset is something which puts money in your pocket each month. It's a lifestyle and prosperity multiplier.
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A liability is something which takes money from you each month. It may be a temporary lifestyle enhancer, however a long-term way of life and prosperity killer.
Teach yourself to the point which you can find and buy American Real Estate which you rents at a higher cost that all of its expenses and there's still a significant amount left over. The residual cash is that stream of income or cash flow.  Finally, when we begin looking at these income flows collectively, it becomes known as"residual income" .
Admittedly, setting up your own Real Estate Investing Business is NOT easy... however, with the proper education, Real Estate Investing does NOT need to be hard. But you have to learn and act.
Now, in case you all of the above makes sense, a funny thing will begin happening. When you begin talking to folks about finances you will soon begin to understand that there are two different kinds of people in this world: those that understand the difference between an asset and a liability, and the ones that will NEVER be wealthy. .
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Each of these entities are money making systems. They produce income while costing very minimal personal effort or time. Even though one of those ended up costing me a million dollars a month but produced two million dollars a month, it's an advantage.
Honestly, who cares how much you are spending on an asset every month if it earns you more than their explanation what you spend Now let us take it one step further... what if the spending was automatic and so was that the earning
If there was a machine that spit out two dollar bills once you gave it a single dollar bill, you would be glued to this machine all day! In addition, you wouldn't care whether this machine charged you 50 percent interest on your buck prior to generating you the two dollars it spit out. .
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Because passive income inherently means that I do not have to spend the most expensive thing in life, time, in order to earn a certain amount of residual income.
Because some people who hear the word get disappointed when they realize there is a lot of education and a few significant set up needed on the front end of their journey to find out here now financial freedom (our"Why"). Again, this isn't a get rich quick scheme, but it's a hell of a lot better than what I had been taught by some of my military and veteran mentors. .
As members of the army, we often think it would be exceedingly difficult, or maybe even impossible, for us to find time to earn extra income. As far as our professional prioritiesour military support should be at the very top. So how can we ensure that we're setting our new property investing business up for enormous success How do we make sure that it doesn't produce more anxiety than enjoyment.
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The trick is to leverage our VA benefits, minimize our personal housing expenses, and focus all our savings towards producing resources... a.k.a. rental properties.