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What if you just had two separate sources earning you $250 paychecks ($500 total) each month with no doing additional work. And those resources simply paid for your automobile expense.
Perhaps you have beaten this concept to death at this point Great. Rich Dad Poor Dad tattooed this concept onto my brain. The concept is exactly what Real Estate Investors call Cashflow.
Again, I realized that I DID NOT want to become wealthy when I was 65 if it cost me my lifestyle during my younger years... I'd rather have a wholesome amount of cash coming in each month from various sources and retire early. Or do WHATEVER I wanted after the army without having to consider the paycheck coming from my new hobby, job, or even occupation as a portion of this equation.
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Both conditions"residual income" and"passive income" attempt 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 instantly start 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, have a sip of your Monster Energy drink, and try to remain alert while on your own 24-hour responsibility in the barracks. .
An asset is something which puts money in your pocket each month. It's a lifestyle and wealth multiplier.
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A liability is something that takes money away from you each month. It may be a temporary lifestyle enhancer, however a long-term way of life and wealth killer.
Teach yourself to this 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 . The leftover cash is that flow of income or cash flow.  Finally, when we begin 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 hard. But you must 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 there are two different kinds of people in the world: those who 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 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 made two million dollars each month, it's an asset.
Honestly, who cares how much you are look what i found spending on an advantage every month if it earns you more than what you spend Now let us take it one step further... what should the spending was automatic and so was the earning
When there was a machine that spit out two dollar bills once you gave it a single dollar bill, you'd be glued to this machine all day! Moreover, you wouldn't care whether that machine charged you 50% interest on your buck prior to generating one of the two dollars it spit out. .
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Since passive income inherently means 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 that hear the term get disappointed when they realize there's a great deal of education and some 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 exceedingly hard, or perhaps even impossible, for us to find time to earn additional income. So far as our professional prioritiesour military service should be at the very top. So how can we ensure that we are setting our new real estate investing business up for massive success How do we make certain that it doesn't produce more anxiety than enjoyment.
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They key is to leverage our VA benefits, minimize our personal housing expenses, and concentrate all of our savings towards producing assets... a.k.a. rental properties.