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Imagine if you had two individual sources earning you $250 paychecks ($500 total) each month without you doing additional work. And these resources just paid for your automobile expense.
Have I beaten this concept to death at this point Great. Rich Dad Poor Dad tattooed this concept onto my brain. The concept is what Real Estate Investors predict Cashflow.
Again, I realized that I DID NOT want to be rich when I was 65 if it cost me my lifestyle during my younger years... I would rather have a wholesome amount of cash coming in every month from several sources and retire early. Or at least do WHATEVER I wanted after the army without having to consider the paycheck coming from my new hobby, project, or even occupation as a portion of this equation.
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Both terms"residual income" and"passive income" attempt to capture the same concept of,"making money mechanically." For the sake of brevity, I will only be using both terms interchangeably.
After hearing the words"passive income,", many of us immediately begin having romantic visions of lounging on a yacht in the Caribbean Sea and occasionally checking our growing bank account. You quickly snap back into it, take a sip of your Monster Energy drink, and try to remain awake while on your 24-hour responsibility at the barracks. .
An asset is something which puts money in your pocket each month. It is a lifestyle and wealth 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 wealth killer.
Teach yourself to the point that you can find and buy American Real Estate that you rents in a higher price that all of its expenses and there's still a significant amount left over. The residual money is that flow of income or cash flow. Finally, when we start looking at these income streams collectively, it becomes known as"residual income" .
Ironically, setting up your own Real Estate Investing Business is NOT simple... however, with the correct education, Real Estate Investing does NOT need to be difficult. However, you have to learn and act.
Now, in case you all of the above makes sense, a funny thing will start happening. When you start talking to people check here about finances you'll soon begin to realize there are two different kinds of people in the 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 those entities are money making systems. They create income while costing quite minimal personal effort or time. Even if one of those ended up costing me a million dollars each month but produced two million dollars each month, it is an asset.
Honestly, who cares how much you are spending on an asset every month if it earns you more than what you spend Now let's take it one step further... what if the spending was automatic and so was that the earning
When there was a machine that spit out two dollar bills after you gave it a single dollar bill, you'd be glued to this machine daily! Moreover, you wouldn't care whether this machine charged you 50% interest on your dollar before generating you the two bucks it spit out. .
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Since passive income inherently means I do not need 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 recognize there is a great deal of education and a few significant set up required on the front end of their journey to financial freedom (our"Why"). Again, this isn't a get rich fast scheme, but it's a hell of a lot better than what I had been taught by a number of my army and veteran mentors. .
As members of the army, we often think it would be very hard, or maybe even impossible, for us to find time to earn extra income. So far as our professional prioritiesour military service must be in the very top. So how can we ensure that we are setting our new property investing business up for enormous success How can we make certain it doesn't create more anxiety than enjoyment.
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They key is to leverage our VA benefits, minimize our personal housing expenses, and focus all our savings towards producing resources... a.k.a. rental properties.