Aside from solely finding wealth, investors can benefit from learning how to improve their overall lifestyle which is what we aim to help with for our Accredited Lifestyle Investor audience. In this section, you will find content related to lifestyle improvement tips for passive investors. Ranging from physical and mental health, good habits, and personal growth tips, we’re excited to provide lifestyle content for the wealthy passive investor.

Top 7 Productivity Tools for Syndicators

Top 7 Productivity Tools for Syndicators

If you are into real estate and want to boost your results to another level, consider using productivity tools to reach your goals. Productivity tools let you work much faster and reach the outcome for which you have been searching. If you don’t know what productivity tools are best for you, keep an eye on the latest trends. You should have no trouble uncovering a tool that works for your passive investing system.

 

Evernote

Evernote is a powerful resource for any real estate agent, and you will be happy when you see what it can do for you. You have several sections you can use to organize your notes and optimize your passive income. For example, you can keep your passive income plans in one section and your wealth building strategy in another. Evernote lets you add pictures to your notes so that you can bring your plans to life. Your passive investing plan goes to new heights when you use Evernote with your investing plan.

If the other benefits are not enough, consider that Evernote works well with a range of other apps. Evernote easily integrates with other productivity apps to give you even better results than you once thought. You can view and update your notes from a range of other tools, allowing you to work from any platform. One of the best features is document scanning. If you want to save a hard copy of your notes to Evernote, take a picture of them from your smartphone or another portable device. Evernote automatically saves your notes to your device for later viewing.

 

Google Tasks

Google Tasks is simple and straightforward when it comes to your wealth plan. With it, you create to-do lists and check them off as you complete them. You can update your list at any time and add more items if needed. Google Tasks connects to your Gmail so that you can add tasks as they come to you.

The simple layout makes it easy for anyone to use no matter their experience. You pin your tasks to your desktop to ensure you don’t forget anything during the day. In addition to working on your desktop, Google Tasks also works well from your smartphone or another portable device.

 

Calendly

Calendly is a fantastic scheduling tool that lets you schedule meetings, events and appointments with ease. This tool lets you set up meetings with your clients or your team when you want to reach the goal you had in mind. Your wealth building plan works well when you schedule with confidence.

This application works with up to seven calendar tools to ensure you get appointment reminders and other alerts that keep you focused and on track. Calendly makes it simple for you to boost your passive investor strategy. You can set up appointments and let it take care of the rest, and you will be happy with the outcome you get.

 

Trello

As far as many people are concerned, Trello is one of the top passive investor platforms you could hope to find. It lets you set up tasks and schedule appointments without much trouble, making your life easier than ever before with a few clicks of the mouse.

Trello lets you stay on track with rule-based triggers and workflow automation tools that do the job right the first time, and you will be pleased with the outcome. You add tasks to your calendar and update your appointments with peace of mind. Trello works wonders for your wealth building system. Watch your profits rise to the next level when you use this tool to keep your company on the path to success.

 

MeisterTask

MeisterTask is a task management platform with plenty of extra features. With MeisterTask, you manage your appointments and other business tasks without the hassle. You can even set up recurring tasks so that you don’t have to keep implementing tasks you do all the time. Some task management platforms don’t carry over to other devices, making it hard to work when you are away from your computer.

MeisterTask defeats that issue and lets you work from almost any device. You get trusted cloud services that store your tasks on a remote server. This lets you access your tasks from any location. MeisterTask lets your team collaborate from different locations so that they complete tasks with minimal disruption.

 

Expensify

Expensify is a tool you use to track your expenses. Use it to track the things you buy online and in person, and you will be glad you did. From the mobile application, take a picture of your recipes to load them to Expensify. You can then create expense reports and track your deductions.

Expensify is a great platform for businesses of all sizes, but it’s even better for small businesses that don’t have the budget for more expensive software. If you run a small business, Expensify has everything you need to manage your business without much trouble. You get the tools you need without breaking your budget along the way.

 

Zapier

Zapier is the next tool you are going to explore. Its simple interface works well and takes your productivity to a whole new level. When you use Zapier, you connect it to other applications for the best results. You set triggers that automatically load Zapier and perform the tasks you have in mind. For example, set it to load when you get important emails or text messages, and you ensure you never miss an important task.

 

Final Thoughts

If you have an investing plan and want to get the most from your real estate business, it’s critical you follow the correct path. You also need productivity tools that do the job and make sense for your bottom line, and you will be pleased with the outcome when you see the results you get.

Productivity tools keep your projects organized and make sure you don’t face unnecessary problems along the way. Review these tools with your needs in mind for the best results possible, and you will be glad you did. You enhance your wealth and earn the outcome you had in mind, and you will know you made a wise investment.

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Tips for setting goals as passive investors

Passive investing is a strategy that’s designed for the clear purpose of maximizing the returns that you obtain by effectively minimizing any buying and selling. In many situations, passive investments are considered to be long-term investments that you hold for a lengthy period of time before selling. For instance, it’s possible for a passive investor to make investments in art pieces.

No matter the strategy you use for making passive investments, it’s important to set goals that will guide your decision-making in the months and years to come. However, setting goals with this form of investing can be tricky when the returns are difficult to calculate. This guide offers some tips on how you can properly set goals when utilizing passive investments.

What Is Passive Investing?

This is a portfolio strategy that centers around buying and holding investments until they have appreciated in value. Because of its flexibility, there are many types of investments that can be made with this strategy. It’s common for investments to be held onto for a very long time. Keep in mind that this type of strategy hardly uses any market trading.

Likely the most common type of this investment is index investing, which centers around replicating and holding a market index or indices. The primary benefits of using this investment strategy is that it’s considerably less expensive and less complicated when compared to an active investment strategy. Additional benefits associated with passive investments include:

  • Very low fees because of much less oversight
  • Your capital gains tax should be low each year
  • It’s far easier to create an effective strategy with these investments when compared to active investments
  • Can help you diversify your portfolio

How to Properly Set Goals As a Passive Investor

When you want to make passive investments, it’s important that you understand how to properly set goals for your portfolio. If your expectations are unrealistic, you could be disappointed in the returns on your investments. While the returns that come with passive investments aren’t exceedingly high, they can help you bring in passive income and increase your wealth. Before you start implementing a passive investment strategy, take a look at the following tips that can help you along the way.

Make Sure That You Set Modest Investment Return Goals

When you engage in passive investing, your main goal should be to obtain modest investment returns. In fact, you should rarely expect to get high returns that beat the market. While this form of investment comes with much less risk than the majority of active investments, it’s important to understand that the returns are generally random. Even though the returns for passive property investments are somewhat predictable, not all passive opportunities can be calculated beforehand. If you set modest investment return goals, you’re portfolio should be able to withstand a slightly worse return than you expected.

Use the Right Strategy

There are many different types of passive income investments that you can make, the primary of which include real estate, dividend stocks, index funds, and peer-to-peer lending. The strategy that you choose depends largely on your preference and your knowledge of the investment in question. Real estate investments are very popular because of the ongoing rise in property values that has occurred in most locations over the past 10 years. If you want to obtain long-term returns that you can count on, this shouldn’t be a bad investment.

If you invest your money into real estate for the purpose of bringing in passive income, you can gain ongoing income source from rental properties. You could also invest in REITs, which are designed to pay out around 90 percent of taxable income to investors as dividends. Crowdfunding is another great option that gives you the full tax benefits of being a property owner.

If you’re not interested in making investments in properties, you could look into dividend stocks, which are an easy way to generate income. When public companies earn profits, these profits are sent to investors as dividends. You could then choose to purchase additional shares with dividends or cash out. Keep in mind that the yields that can be obtained with dividend stocks vary with each company. Consider searching for companies that are classified as dividend aristocrats, which indicates that significant dividends have been paid out for at least 25 years.

As touched upon previously, among the more popular types of passive investments are index funds, which are mutual funds that are linked to a market index. Index funds are passively managed and won’t change significantly unless the underlying structure of the index changes. Management costs are very low with index funds. The fourth type of passive investment strategy that you should consider is peer-to-peer lending, which is also known as crowdfunding. Currently, crowdfunding is highly popular and is used for everything from buying properties to funding different types of loans.

Crowdfunding involves numerous investors lending money to a business entity or person via an online platform that connects the borrowers and lenders. These platforms include Lending Club and Prosper. Aside from funding the actual loan, you aren’t required to do much in regards to managing the fund. You can expect a return that ranges from 6-12 percent when making crowdfunding investments, which can help you with your wealth building efforts.

Each of the four aforementioned strategies has its own positives and negatives that you will need to take into account. With the right approach, all four options can provide you with sizable returns that you can use to increase your wealth or to open up additional investment opportunities. The goals that you make can be dictated by the strategy you choose.

Identify How Much Money You Should Save

Whether you want to make passive investments to bolster your wealth building efforts or to increase the amount of money that you have for retirement, it’s important that you set a goal for the total amount of money that you want to earn and save from your investments. When saving for retirement, it’s recommended that you set aside enough money to cover 70-85 percent of the income that you bring in before retirement.

If you want to travel the world upon retirement or invest in a new hobby, your savings may need to be even higher. Other investment firms recommend that you save around 10 times the amount of income you generate in a single year by the time that you turn 67. If you earn $100,000 per year, this means that you should have around $1 million in savings by the time that you’re 67. Once you know how much you want to save, you will have a better idea of what your goals should be.

Know How to Overcome Investment Hurdles

There will always be hurdles and challenges that you will be required to overcome when making passive investments. If you want to reach the goals that you set for your investments, it’s important that you know how to overcome any challenges that you face. Even though passive investments are less risky than active ones, it’s still possible to lose money on your investments. Keep in mind that this type of investment is meant to be a long-term strategy, which means that you will want to sell your investments when they have reached an acceptable value that will allow you to generate a sizable return.

Along the way, you may notice that the investment dips in value at one time or another. Some investors will panic in these situations and choose to sell, which is typically a bad idea. Passive investments aren’t meant to fluctuate substantially in value, which is why you should be patient while awaiting favorable returns. The key to a successful investment is to react to volatility in the markets with a calm and measured approach.

Set a Clear Timeline With Each Investment

It’s highly recommended that you set a clear timeline with the goals that you have for each investment. If you want to net a return of 10 percent after 10 years of holding an investment, you should stick close to the timeline that you’ve set. By creating a clear timeline, it should be easier for you to avoid selling too early or to hold on too long while you await higher returns. Keep in mind that the right passive investments can be held until well after retirement age. If you set these timelines as early in your life as possible, it’s more likely that you will earn enough income to reach your goals.

If you want to be a successful investor, making passive investments is a great way to diversify your portfolio. Most of these investments are simple and easy to manage, which helps to reduce overall risk. Though goals aren’t always easy to define with passive investments, setting some basic ones should help you avoid making costly mistakes when you invest your money. With patience, the income that you generate could be higher than anticipated.

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Building a wine collection

Do you remember the circumstances that surrounded your becoming an oenophile? Perhaps it was while drinking a glass at a riverside restaurant amidst a jovial or relaxed atmosphere. Or maybe it was more of a gradual occurrence; one day, you realized just how interested you are in it. Regardless of how it came about, thoughts of building a wine collection have likely now come to mind. Should you do it? If you love it and love learning about it, that is reason enough, and your next step should be focused on learning how to do so. With that said, you could also take into account that this can serve as an investment opportunity as well.

Should you build a cellar?

Storing a selection of wines in a cellar is a commonly used option. Building one is also a great way to utilize the benefits of generational wealth or wealth attained via passive investing or other types of investing. Doing so will allow you easy access to your collection for those times when you want to be able to bring one or more bottles up for a gathering, for personal use or for other reasons. A cellar can also serve as an interesting stop on a house tour.

However, a significant amount of planning should go into this process to ensure that your wines are being kept at an optimal temperature and in otherwise optimal conditions for the years that they will likely be there.

You should ensure that your cellar is kept between 50-60 degrees, as close to 55 as possible, and that the temperature does not vary much. If it must be warmer than that temperature range, note that anything about 68 degrees is likely going to cause a considerable increase in the aging process and may even cook your bottles’ contents, so to speak, resulting in flatter flavors and aromas than had been intended. Regardless of what the temperature is in there, keeping it from fluctuating should remain a focus.

Also, it should be between 65-75% relative humidity in your storage facility so that your corks do not deteriorate. For example, too little humidity can lead to a cork drying out and oxygen passing through the now-brittle cork and into the bottle, which would, in most cases, result in its contents oxidizing or otherwise spoiling.

Light must also be kept away from your collection as it has been shown to adversely affect flavors due to light-induced premature aging. This light-avoidance focus is also why many bottles come in green or brown colors.

Ensuring that your bottles do not experience more than minimal vibration is important as well. This is because this act breaks up chemical bonds within the substance. It is understandable and expected that vibrations will be experienced during transport, but once your bottles are settled in your cellar or elsewhere, they should be kept in a non-vibrating environment so that those bonds are not continuously breaking apart and reattaching.

Other storage options to consider

Another option to consider is a wine refrigerator. This is often preferred by those who want to build a collection but do not wish to create or use the space necessary for a cellar. Note that this type of refrigerator offers benefits specific to its intended purpose, such as doors that block out light, an ideal temperature setting and a locked door to keep heat variations and vibrations to a minimum. However, many believe that this is not the best option if you are looking to store bottles for a considerable amount of time – i.e. years.

Conversely, you could use the services of a storage facility that is dedicated to keeping bottles in the conditions that will allow them to age as intended for extended periods of time and with no further effort necessary on your part. This is a great option if you want to solely focus on building a collection without actually storing it yourself. However, one con to consider is that access will not be as easy as going downstairs to your cellar to pick up a bottle.

Building your collection

A couple of the most important aspects related to building your collection are your own knowledge and what interests you. Regardless of how much wealth you have, you want to ensure that what you are purchasing is being bought at a fair price and that it coincides with the types of wines that you want to collect. If necessary, consider paying for the services of a personal buyer or consultant.

You should also consider which wines go well with foods that you tend to eat, and buy more of the types that you are apt to consume in general as well.

Deciding on your budget is another important step in this process, and it can vary significantly. If you purchase bottles that have already aged as intended for years or decades, you will be spending considerably more than if you are instead focusing on newer bottles with an intent to age them yourself. In fact, some aged bottles sell for hundreds of thousands of dollars.

When you make any purchases, ensure that you or someone you trust can effectively assess the trustworthiness of the seller or the auction house that is providing the wines. Most important is making sure that you avoid unintentionally buying counterfeit versions. As far as research goes, also consider information such as a winery’s history, ideology and wine-making processes.

Once you start to build your collection, you should keep records of exactly what you have and where it is being stored. You want to be able to quickly get to what you need when the time comes, and you want to know when the best time to open a bottle is. Also make sure to store items such as receipts, seller details, auction catalogs and pictures of the bottles upon purchase. Note that many of these records are essential to selling any bottles in your collection for the highest price possible.

You should also strongly consider getting insurance that covers bottles’ shipping and things such as breakage and theft that could occur while it is being stored.

Regardless, you should make sure that your collection matches your interests and personality. It is a reflection of you. The only exception to this general rule occurs if you are purchasing various wines with the sole focus of engaging in wealth building as a result of doing that and selling them on at a later time, hopefully for a profit. Of course, you could always incorporate a combination of these factors and build a collection that both interests you and will, you believe, turn a profit.

Investing and other considerations

Although investing in a collection can result in a considerable profit, you should keep in mind that this is one of the least predictable ways to engage in wealth building. That is one of the reasons why you may want to have your collection assessed and appraised on a frequent basis, to keep up to date on the value of it and if you are earning or losing money as a result of the latest trends related to what is in your collection.

Due to these factors, most believe that you should have a passion for wine and be willing to lose any money that you have put into it. Diversifying your collection is one way that you could limit any monetary damage that may result.

With that said, also consider some other potential benefits that come with building a collection.

As you attend wine-related events, take part in auctions and do the research necessary to smartly purchase rare wines, you will be interacting with others who share your interests, and those connections will not only improve your knowledge of various types of wines, but they may bring you connections that could ultimately prove to be monetarily beneficial.

Also, a cellar has the potential for benefits related to real estate. A well built and maintained one can significantly improve the real estate value of a home, and a quality collection in that cellar, if you are willing to part with it, would cause that value to further increase a considerable amount.

Plus, note that this alternative way of engaging in passive investing could result in you passing on generational wealth in the form of bottles that may be of considerable value to future generations.

There are several reasons why you may want to start a collection. However, many believe that the best one is to create memories. Seeing one of your bottles may spark thoughts of where you were and what you were doing when you purchased it. The same is true of when you open it and consume it, if that is what you ultimately decide to do with it.

In fact, building a collection, particularly if its contents are especially personal to you, may end up becoming one of your favorite ways to use your wealth.

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How to Practice Your Golf Game During the Winter

When the days grow shorter and colder, you might really start to miss golfing. The sport offers fresh air, scenery, companionship, and fun. It can also improve your concentration and relieve negative stress. Indeed, for those with generational wealth and many others as well, it’s hard to imagine life without this genteel game.

Not to mention, golf can be handy in terms of growing wealth. After all, fairways are great places to network, discuss real estate, discover new passive investing ideas and other wealth building opportunities, and forge stronger relationships with partners, investors, and clients.

For many people, winter takes all of that away. Even worse, after a few months of not playing, you might find that your skills are rusty. And, if you perform poorly on the links come spring, you certainly won’t impress your fellow businesspeople.

Fortunately, there’s no reason to put those clubs away for the entire winter. Instead, if you give the following ideas a try, you can putt and swing away those cold-weather blues.

1. Take a Vacation

To start with, you could fly south, rent a car or hire a driver, and hit as many courses as possible during your trip. You might turn this vacation into a multistate adventure as you visit courses you’ve long dreamed of playing. And all of that sunshine will be rejuvenating.

If you have enough time, you might attend a camp or school in Florida, Southern California, Hawaii, or another exciting destination. It could last a few days or even longer. If you go to a camp with a great reputation, you’ll receive a wealth of useful tips and lots of personal attention. Plus, you can make new friends among your fellow enthusiasts.

Indeed, there are camps for every level of player. Beginners can work on the basics, while advanced golfers can refine their skills to gain an extra competitive edge.

2. Just Keep Swinging

If you don’t own a weighted golf club, you might pick one up or ask for one as a holiday present. You can use it to practice your swing for about three to five minutes per day — or longer if you prefer — in your gym, home gym, or garage. On warmer winter days, you can do this exercise in your yard. It will keep your swing sharp while maintaining your arm strength.

Of course, you’ll want to hit actual balls on occasion. To do so, head to the nearest indoor driving range whenever you have the free time. Indoor ranges offer various benefits. They’re quiet, warm, and private, with no wind or other distractions. You can also receive data and feedback from an instructor or a state-of-the-art software program.

In fact, you might enjoy your indoor driving range so much that you keep visiting it even when the weather gets warmer.

3. A Driving Range of Your Own

Have you ever thought about building an outdoor driving range? It might be ideal for those less frigid winter days. Naturally, this solution works better in places with milder climates. If you live in, say, northern Maine or northern Minnesota, it probably won’t be too helpful.

Obviously, you’ll need disposable income for this expensive setup as well as plenty of real estate, preferably a huge backyard with some woods behind it.

Creating a home driving range starts with investing in a large golfing net. You could position it behind your home, near the edge of your property. Then you could buy a mat with a tee. With these pieces of equipment in place, you can hit balls to your heart’s content on certain days.

Also, once your driving range is ready, you might find that your friends and neighbors start spending a lot more time at your house.

4. Get a Grip

You can use those winter months to work on your grip as well as your swing.

Maybe you’ve developed some bad gripping habits in recent years. Perhaps your hand positioning has always needed a little work. Well, there’s no shame in that! The coldest part of the year is the perfect time to correct this shortcoming.

You could work with a private instructor or a close friend with an excellent grip. Or you could rely on outstanding instructional videos online. Once you learn the right grips for different situations, you can grab a club whenever you have a spare moment and practice them. Soon enough, they’ll be second nature to you.

5. Don’t Forget to Putt

If you’re a typical golfer, more than 40 percent of your strokes are putts. Thus, although it’s easy to overlook putting at times, working on this complex and delicate skill can really improve your game. Fortunately, during the winter, it’s easier to practice your putts than your long drives.

How does investing in a putting mat sound? You could consult a professional or scan internet reviews to find a mat that’s high in quality.

You could lay your mat inside your home, anyplace where you have enough extra space. Then you could putt while you watch TV, talk on a speaker phone, or listen to a podcast. Your dog might even get a kick out of watching you practice. For sure, putting time can be enjoyable and relaxing.

If you’re ever in a pinch, you could do without the putting mat. For example, if you’re at a relative’s house or staying in a hotel, all you need is your club, a ball, a length of bare carpet, and a coffee mug turned onto its side, standing in for the hole. With those items, you can get in a little putting practice.

To make it even more fun, you could ask a family member or friend to join you. If you keep score, the competition could quickly become intense.

Note that indoor driving ranges often have putting greens you can use as well.

6. The Joy of Simulators

One of the most pleasurable ways to practice your game is to use a simulator. It’s like an advanced arcade game. If you’ve never tried one before, it works as follows: You stand on a piece of artificial grass in front of a large screen. You swing a real club, but you hit an imaginary ball. The screen then displays a computer-generated ball flying through the air.

Depending on your stance, how much force you apply, and other factors, the software program estimates where your ball would land in real life. It can also provide you with specific feedback to improve your game.

Indoor driving ranges often have these simulators, and you might even want to buy one of your own. Here’s an example of generational wealth coming in handy!

Furthermore, these devices can replicate many real-life scenarios, including rain, gusts of wind, and crowd noises. They provide a variety of courses and scenery, which makes practicing more engaging and stimulating. They allow you to try out every type of shot. And this software keeps getting more realistic, subtle, and sophisticated all the time.

Additionally, with a simulator, you can view a course from practically every angle, including looking down at it from high above. As a result, you can examine your ball’s different positions and figure out a range of strategies. Doing this analysis should help you become a sharper and more precise player overall.

7. Stay in Shape

Obviously, no matter which sports you enjoy playing, you must remain in peak physical condition to perform at the highest possible levels. Therefore, try to maintain your in-season fitness schedule and nutritional regimen throughout the winter.

Visit your local gym or work out at home at least four times a week, and do plenty of cardiovascular exercises in addition to strength training. In the winter, your personal trainer can be your best friend.

A Few Extra Tips

On top of everything else, you can satisfy your appetite for the sport by reading books about it and watching pros on television.

Plus, it might be a good idea to spend a week or two totally avoiding the sport. That’s right: Don’t watch it. Don’t read about it. Don’t practice. Instead, focus on other things: new hobbies, your passive investing and other wealth building strategies, teaching your cat a trick, or taking care of your houseplants. Anything that takes your mind off the subject will work.

When you take a vacation from the game, you can recharge your mental batteries and gain some perspective. Then, when you go back to practicing once again, you’ll feel refreshed and renewed. And, with your mind cleared, you might realize that you’ve been making certain mistakes, and you should be able to correct them.

As you can see, the winter doesn’t have to be a season that’s devoid of golf. Rather, with dedication and creativity, you can use those months to hone your skills and fix any bad habits you’ve acquired. You’ll return to the links in the spring a new golfer, and your friends and business associates might be amazed by the swinging, chipping, and putting that you’re doing.

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13 ways to create multiple sources of income

The prospect of having multiple sources of income is undoubtedly enticing, but turning your money into more money is a tricky and daring undertaking to pursue. However, entrepreneurs, financial advisors, and business moguls alike maintain that with patience, persistence, and innovation, anyone can master the art of wealth building. If you’re interested in earning more cash while keeping your day job, below are some ways you can build wealth without compromising your career or adopting an unhealthy work-life balance.

Create A YouTube Channel
Social media influencers are often mocked, but the power of having a strong online presence is not to be underestimated. With YouTube, creators can express themselves while making a quick buck. In other words, thanks to AdSense, online influencers can monetize their content. In essence, for every view that your video receives, you have the potential to make money.

The more engaging your videos are, the more likely you are to earn a substantial income. Contrary to popular belief, being a YouTuber isn’t as simple as uploading a haphazardly edited video. Viewers want captivating, eccentric, and even informational content that allows them to escape from reality. If you wish to embark on this endeavor, these are critical elements to bear in mind as you create videos for the masses.

Start A Blog
While blogging has long been considered a mindless hobby, many are discovering that this pastime can reap financial benefits. The beauty of blogging is that there isn’t a one-size-fits-all approach. Some choose to use their blog as a digital diary. Others wish to discuss their passions with like-minded audiences.

Whatever you decide, make sure that you’re authentic, consistent with your uploads, and eager for feedback. These are the key ingredients to a successful blog, and the more traction you receive, the better your chances are of becoming an affiliate marketer. Simply put, an affiliate marketer is someone who promotes a brand’s products or services, so if your blog is performing well, more companies will be keen to work with you.

Resell Products On Amazon
Much like its name suggests, reselling on Amazon consists of advertising products on this e-commerce platform. To make a profit, resellers tend to purchase goods in bulk. This practice was so sought-after that in 2010, resellers single-handedly took over the Amazon marketplace. While reselling products on Amazon sounds simple enough, you don’t want to make the resale value too low. Not only will this hurt your profits, but it’ll also make consumers suspicious. If a deal seems too good to be true, people generally wonder what the catch is. With that in mind, price your items reasonably.

Etsy
Etsy is a beloved e-commerce website where online shopping meets personal creativity. Offering an extensive collection of handmade items, Etsy makes it possible for sellers to display their artistic abilities, gain clients, and increase revenue. The most intriguing aspect of Etsy is that it appeals to an assortment of buyers. Whether you make vintage jewelry, personalized picture frames, or home decor, Etsy attracts a wide variety of shoppers. It’s for this reason why Etsy is the ideal place for individual sellers. Simply put, on Etsy, you can flex your creative muscles, establish a clientele, and find a rewarding side hustle.

Social Media
Whether you love it or loathe it, there’s no denying that social media is king. It’s this irrefutable truth that has inspired so many to gain a following on these platforms. From Twitter and Instagram to Facebook and TikTok, there are so many digital domains where you can showcase your talents. Much like YouTube, the more support you receive, the more brands will want to collaborate with you. If you find success in the social media stratosphere, companies will pay you the big bucks to sell their products and services to your audience. A look into how popular influencer marketing has become highlights the possibilities that social media offers.

Unleash Your Inner Entrepreneur
The most obvious way to create another stream of income is to start your own business. With a sensible strategy and some savvy investing, you can fill a void in the ever-expanding marketplace. Consumers are always looking for the next best thing, and though your idea may seem far-fetched, you never know when a novel concept can breed enduring wealth. After all, I’m sure the masterminds behind Snuggie, Chia Pet, and Reddit never thought they’d take the world by storm. Yet, in a stunning turn of events, their newfangled notions helped them generate generational wealth.

Consider Fiverr
Fiverr is an online marketplace for ambitious freelancers. This platform takes a modern approach to business, encouraging freelancers to unveil their unique gifts to customers worldwide. Like most, you might be thinking that websites like Fiverr are already saturated with eager entrepreneurs who will inevitably outperform you. Fortunately, Fiverr is always welcoming new talent, and there’s no shortage of skills they won’t accept. For instance, you can sing show tunes, provide fitness lessons, and offer tarot readings on Fiverr. With that said, as unusual as your expertise may seem, Fiverr will embrace and market it.

Become A Contractor
Being an independent contractor promises many perks. Not only are companies willing to pay more for your specialties because they don’t come with employee expenses, but being a contractor also lets you set your own price. The more competitive your rates are, the more work you’ll receive. Above all else, if you yearn for independence, becoming a contractor will appeal to you. Autonomy is the hallmark of this line of work, so if you want to make more money while satisfying your individual needs, this profession will be right up your alley.

Start A Retirement Fund
With a 401(k) plan, you can set yourself up for financial stability, acquire capital as you age, and put forth little effort while accomplishing both. Though you’ll have to make contributions over the years, you’ll have exceptionally deep pockets by the time you’re ready to retire. For an optimal outcome, familiarize yourself with this form of investing. In some cases, your employer may match your contributions. If they don’t, a Roth IRA might prove more beneficial. The takeaway here is that when you invest in yourself, a steady flow of income is promised for years to come.

Buy Stocks
The stock market, while fickle, presents an excellent opportunity to maximize income, build wealth, and safeguard your money from inflation. Seasoned investors are fond of index funds because there’s minimal buying and selling involved. This strategy is known as passive investing, and it’s a tried-and-true approach that some regard as less risky. If you pursue this type of passive investing, rest assured that you won’t have to concern yourself with rebalancing your portfolio, selecting investments, or buying and selling at the right time.

Purchase Property
Buying real estate is the gift that keeps on giving. Those who purchase property have a world of possibilities at their disposal, and no matter what you decide, it’ll pay dividends. Some investors have found such success on this front that their income comes solely from renters. In other words, all they have to do to make a living is maintain the property they bought. With the funds that they receive from their tenants, they lead a comfortable, cushy life.

Invest In REITs
Better known as real estate investment trusts, REITs are described as mutual funds that require little involvement from you. Essentially, professionals oversee the fund, taking the stress and hassle out of these affairs. Wealth building and REITs go hand in hand, which is why many prefer them to stocks, bonds, and bank investments. Best of all, you can sell your interest in a REIT whenever you want, placing the ball entirely in your court. Most importantly, REITs are more liquid than owning real estate, so if you aren’t ready to pull the trigger on buying property, investing in a REIT is a great starting point.

Build An App
These days, there’s an app for everything. Even still, there’s always a high demand for simplified mobile navigation. Applications make people’s lives easier, which is why these nifty implements are so desired. Though you’ll need some technical expertise to bring your app to life, if your idea fulfills a want or need, it’ll naturally catch on. If you build an application, make ongoing adjustments and enhancements so that consumers won’t lose interest.

Earning Passive Income Is An Option For All
Creating multiple sources of income doesn’t require reinventing the wheel. In fact, you can promote generational wealth and financial security with something as trivial as a blog post. Using the above ideas, you can find revolutionary ways to make more while doing less.

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Art Collecting

Do you enjoy pieces of art? Perhaps you want to use the benefits of your wealth building to purchase and hang up beautiful, historic paintings in your gorgeous home. You may also consider decorating your prime pieces of real estate with artistically crafted sculptures. Or maybe you do not have any interest in art from an aesthetic view, but you view it as a passive investing opportunity that you want to utilize. Regardless of the reason, purchasing art is a great way to use your wealth.

Art Experiences

One option for having a complete art-buying experience is taking part in art fairs. When you do this, you will have memories to go with the beautiful art that you decide to take home. One of the most popular art fairs is Art Basel, which takes place in Switzerland, and its counterparts in Hong Kong and Miami Beach, Fla. Since the first Art Basel in 1970, all three of these events have gained significant audiences of international art enthusiasts.

Another one to consider is the Frieze Art Fair. This newer event started in 2003 and is held on an annual basis in London, New York and Los Angeles. The one in the City of Angels is the newest; its inaugural edition was in February 2019 at Paramount Pictures Studios. Meanwhile, the one that was held in London in October 2019 attracted 125,000 visitors.

These art fairs are ultimately great experiences to have even if you decide that none of the artwork on hand fits what you are looking for artistically or as a passive investment opportunity. In fact, they all also attract art connoisseurs who simply enjoy taking in the art that is on display and have no interest in buying any of it.

Make sure to also research similar events taking place in your own community. Depending on where you live, there may be a thriving arts scene there that you had not even realized existed. And, as the common saying goes, “art is in the eye of the beholder,” meaning that you may discover pieces that really touch you in your own community without needing to fly to places like London, New York or Hong Kong to find artwork that fits your personality and interests.

Do keep in mind the varied types of art that exist. When many think of the term, “art collecting,” the accumulation of paintings by Picasso or sculptures by Michelangelo comes to mind for many, but that is a narrow view. Many today are also interested in other types of art, such as graffiti art. Meanwhile, an example of a highly coveted non-traditional piece of art is Kaws’ painting of “The Simpsons” that had the look of the “Sgt. Pepper’s Lonely Hearts Club Band” album cover. It went for $15 million in 2019.

Also consider that collecting art does not necessarily mean that you need to have physical pieces of art that you are bringing home. You could simply collect artistic experiences. Use some of the generational wealth that you were fortunate enough to receive to do things such as enjoy a box view of a prestigious opera or buy prime tickets to a production such as “Hamilton” for $1,000+ dollars apiece.

The best reason to focus on art collecting from an experience standpoint is because an increasing number of people are valuing experiences over things. Think back to your childhood. The memories that you likely most treasure from that time in your life were the experiences that you had, not any sorts of things that you may have accumulated. The same is true in adulthood. Of course, the experience of going to art exhibits and discussing art with others fits that mold as well, particularly if that also involves traveling to those events.

Online Art Purchases

The purchasing of art online has received increased interest as of late, and many of the aforementioned arts events that have historically welcomed so many physical visitors to their gatherings have started making the move to offering online options for purchasers as well. The more prestigious ones have ensured that multimillion-dollar transactions can be done online safely and securely. They also make sure that the entire experience, including perusing which pieces of art that you are considering, is a seamless one. Many of them have embraced those new to art collecting and make it an enjoyable experience for them as well.

Art as Investing

One way to engage in wealth building is by investing in art. However, it is viewed by many as a risky investment, so it may be better to only go down this route if it is also something that you love as combining the two – investing and love of the arts – is probably the best way to use art as a wealth-building mechanism.

If you do decide to focus on art solely as an investment opportunity, make sure to do your research while concurrently being prepared for it to not be a smooth or predictable path towards greater financial success. This is a passive investment opportunity in that you are not apt to buy and sell in significant numbers, but it is not one in that it may not be the best way for you to maximize returns. But if you are interested, websites such as Artnet, Sotheby’s and Magnus will help.

You can research the art world in a number of ways. This can include regularly visiting local galleries and ones in other cities and countries while you are traveling and talking with curators and other experts there to increase your knowledge of art and of what types of pieces are valuable. Also visit the art fairs mentioned earlier as well as special events such as gallery openings.

However, with that said, this can be a passive investing strategy that results in significant gains. One of the best examples of this is buying art from an up-and-coming artist and then seeing the value of that artwork skyrocket. In this sense, this is no different than stock traders getting in on the ground floor of a company that ends up achieving tremendous success.

Regardless, be prepared for it to normally take 10+ years for art investment to provide significant dividends. This is one of the reasons why this could be a great way for you to pass on generational wealth to your loved ones.

One other thing to keep in mind is that the value of art tends to not closely correlate with how the stock market is doing. As a result, art investment can be a great way for you to diversify.

You could also view art investment as a way to increase the value of your real estate, by providing it with valuable pieces of artwork. In those cases, your art-focused investment could end up more immediately paying off by increasing the value of your real estate a significant amount prior to you selling it.

If you are going to focus on the purchasing of art for economic reasons, make sure to also take into account all of the possible associated costs, such as how much it will cost to store and maintain it, which can involve monitoring things such as how much light and humidity it experiences.

Also consider taking part in buying shares of expensive pieces of art, which can be done through an online marketplace. A couple of investment platforms to consider that will help with this include Maecenas and Masterworks, but note that Masterworks is only available to those outside of the United States.

Types of Art

Art tends to be one of three types.

Originals are one-of-a-kind pieces of artwork. These are usually worth the most. Prints are copies of originals. They provide a great way for you to have a beautiful piece of art for not a lot of money, but they are, for the most part, poor investment opportunities. Of course, it depends as rare prints can command a considerable dollar amount. Lastly, reproductions are similar to prints, but this term refers to copies that have been mass-produced. They are much more affordable but unlikely to earn you a profit.

Is Art Collecting for You?

One of the best ways that you can use the wealth that you have accumulated is to engage in your passions. If art is one of them, this could be a perfect match for you, the same as if you were a sports enthusiast who wanted to use your wealth to enjoy those types of events or invest in sports-related organizations.

Note that you can also use your interest in art to focus on supporting artists who you enjoy. Of course, you may even be able to earn some income if the artwork that you purchase increases in value and you do not mind parting with it. Regardless, art can provide you with unique investment opportunities.

Is art collecting for you? It depends, but it is something that you should consider.

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How Passive Investing Can Generate Wealth and Change the Way You Work

Imagine having the freedom to work because you want to, not because you have no choice. Think of what it would be like to wake up each morning with nothing to worry about because you know your finances are in order. Consider how great it would feel to know that the money you’ve already made is working to make you even richer.

Wealth Building: What Does it Mean to Be Rich?

When you imagine a “rich” person, what do you see? You might envision some happy guy drinking champagne on a private yacht. You might picture him with a spouse or other loved ones nearby. You probably wouldn’t think of a miserable person who works 80 hours a week and has no time for fun.

Is someone really wealthy if they have plenty of money but no time to relax? There are different ways of looking at riches. The concept of wealth can break down into three categories.

1. Financial

Money isn’t everything, but it is the primary aspect of being rich. To achieve true financial freedom, you need to be free of debt. This doesn’t mean you’ll never take on debt to expand your investment portfolio. There are times when getting a mortgage on a new property can be beneficial. The main goal is to make sure your net worth is positive.

The goal of attaining financial freedom is to never have to worry about money again. If you’re single, this is easier to achieve. If you’re supporting a family of 10, your goal should be to build generational wealth you can pass down. Someone with true riches will be able to fall asleep each night knowing everyone they love will be comfortable for the rest of their lives.

2. Time

Freedom of time is another important aspect of a luxurious lifestyle. Some people become so focused on making money they end up taking on too much and never having any free time. The path to riches can’t require nonstop work. All of the richest people on the planet utilize passive investing.

Passive investments are the key to true financial freedom. They require minimal hands-on work. You can manage them from anywhere, from your living room to a beachside bungalow across the world.

3. Location

The last important aspect of a true life of riches is freedom of location. When you aren’t locked into a strict work schedule, you’re free to go anywhere you like. You can manage most passive investments from anywhere. One of the best ways to get into passive investing is through property.

Passive Investments in Real Estate: What Are Your Options?

Getting into the world of real estate is one of the smartest routes to gaining freedom of time, location, and finances. When we discuss passively investing in property, we don’t mean buying an apartment building and renting out the units. While this can be a great option for some, it’s not passive. It requires hands-on work and is best for someone who prefers to remain located near the investment property. True passive investments allow you to enter the property market without all the hassles.

Crowdfunding

Throughout history, people have always turned to investors to help them fund various projects. It’s a great option, but it’s not always possible to find a single investor who can contribute what’s needed. Crowdfunding makes this process easier by allowing multiple parties to pool their money together.

There are two ways to invest in crowdfunding projects.

  • Invest in a mortgage for a commercial property.
  • Invest in the property itself.

Making an investment in a mortgage means your money goes toward the loan. As the borrower pays back the loan, you receive a percentage of the interest.

If you choose to invest in a property, you’ll get returns on your investment through income generated by said property. You’ll also earn a portion of the profits when the property sells.

How Can it Benefit You?

Maybe you plan to make a big investment, but you’re just short of the amount you’d need to buy in. A benefit of crowdfunding is that it allows investors to enter the market regardless of how much they want to spend.

Even if you have plenty to invest, this makes it easy to diversify. If you choose, you can put your money toward 10 different projects rather than one. You’ll get less of a return if one of these projects does well, but you’ll also have a reduced level of risk. Crowdfunding allows you to choose a level of risk you feel comfortable with.

Another benefit is the platforms make it easy to browse investment opportunities. Rather than spending hours searching the internet, you can find many legitimate opportunities in one place.

How Can You Get Started?

In the past, only accredited investors could use crowdfunding platforms. In May of 2016, the platforms became available for anyone who wanted to make an investment. The JOBS Act, which passed in 2012, was designed to make things easier for small businesses. In late 2015, the SEC finalized provisions related to crowdfunding and accreditation.

To get started, you’ll need to join a property crowdfunding platform, such as Crowdstreet or Fundrise. Both services are reputable. Property crowdfunding is a hot trend, which means many are trying to profit from it. There are a variety of crowdfunding startups popping up these days, and a lot of them aren’t well-capitalized. Anyone can build a website that offers crowdfunding, so doing your research will be crucial. Look into who founded the platform. Make sure they have business experience and knowledge of the world of real estate.

Lending

Becoming a private lender is another way to break into the market. Being a private lender can earn you passive income the same way it does for banks and financing companies. You provide the money upfront, and the borrower pays interest, providing you with an ongoing source of passive funds.

How Can it Benefit You?

If you have a significant amount of capital to work with, this is a good option. A big benefit is that private lenders working with property aren’t limited by the terms of the Dodd-Frank Act. This means you’ll be free to set your own terms for the loan. For example, you could choose to work with risky borrowers that major lending companies wouldn’t consider.

How Can You Get Started?

It can take some effort to establish yourself as a private lender, but once you’ve set up your loans, it becomes a passive venture. First, you’ll need to found your business and get insured. It’s smart to meet with your attorney to discuss the plan and receive personalized advice before moving forward. When you’re ready, you can join a private lending platform that will connect you with interested borrowers.

REITs

A REIT is a special type of investment trust devoted to property. They usually own commercial properties that generate income, such as strip malls or motels. They also may own mortgages. You purchase a stake in one of their properties, and you get a percentage of the profits.

The types of REITs include:

  • Mortgage REITs, which purchase existing mortgages and pay out dividends based on interest.
  • Equity REITs, which allow investors to purchase a stake in an income-generating property.
  • Hybrid REITs, which offer investment opportunities of both types.
  • Publicly traded REITs, which are SEC regulated.
  • Non-traded public REITs, which offer more security due to not dealing with fluctuations in the market.
  • Private REITs, which aren’t traded or regulated by the SEC.

How Can it Benefit You?

REITs generally pay out high dividends. They’re a passive option that can help you with wealth building. They offer diversification without a high degree of risk. Publicly traded REITs offer the benefits of property investment and stock in one.

How Can You Get Started?

If you’re ready to invest in a REIT, you’ll need to meet with a broker. Some brokers only handle publicly traded REITs, and others offer the non-traded variety. Do some research into the different varieties to see what will work best for you, and then find a broker who can deliver.

Grow Generational Wealth: Begin Your Investment Journey Today

When it comes to building wealth passively, you’ll have to figure out what works for you. For investors, no two paths are exactly alike. The key is learning how to balance the risks with the potential gains. Think about what being rich means to you, and then work smart instead of hard. A decade from now, you’ll be glad you did.

For more information on investing, passive wealth building, and living a fantastic life, check out our blog.

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Working because you want to, not because you have to

The work environment has changed tremendously over the last century. No longer are people just working on getting a paycheck to allow their families to survive. The workplace mentality has greatly shifted to working towards a purpose, not just a salary. People desire to be inspired, to commit themself to a main purpose, and enjoy the ride.

What Is Passive Investing?

Investing passively has been long defined as a buy-and-hold portfolio strategy that is based on long-term horizons. While this broad definition does define many parts of various investment strategies, real estate buying requires more of a specific definition.

In regards to properties, passive investments are defined as purchasing rental properties without a substantial amount of active participation. Passive property buying can be broken down into two categories, which are direct and indirect.

Direct

Direct investments are described as an approach where the investor purchases a property that is already cash flowing. Upon purchasing the property, the investor will hire a property management company to handle the day-to-day tasks, such as collecting rent.

Indirect

Indirect investments are defined as investments in REITs or real estate related mutual funds. In this scenario, the investor simply collects dividends from the funds, and there is no day-to-day management of the investment required.

What Are The Benefits Of Rental Properties?

As a passive investor, there are many benefits you can reap from this wealth-building strategy. You’re obviously aware of some benefits, which is why you’ve chosen this type of investment strategy. However, here are some other benefits that you may not have noticed yet:

You Can Easily Use Leverage

Rental property buying is one of those strategies where you can utilize leverage in a good way. When we talk about leverage, we’re referring to taking out debt on the property. For example, your down payment may be 25 percent of the overall purchase price of the property. Instead of shelling out $100,000 for an investment property, you only need to pay out $25,000. Then, your incoming rent will pay the mortgage payment.

With rental properties, you can use this leverage advantage to scale up fast. Instead of buying just one investment property with your $100,000, you can use leverage to buy four properties, all valued at $100,000. This type of leverage is very hard to replicate with any other type of investment strategy.

Real Estate Allows For Diversification

Rental properties allows for easy diversification by nature. You can diversify in different types of investments, such as residential, commercial, and land lots. You can spread your investments across different geographical areas. You can opt for larger apartment buildings to decrease your risk of not getting paid rent. There are a plethora of diversification tactics you can enjoy within this one investment sector.

You Can Force Appreciation

With many types of investments like stocks, you can’t change what the asset is worth. You’re stuck at the mercy of outside factors to determine value changes. With tenal properties, you can force appreciation on your properties. This means you can easily increase the value of your asset at any point in time.

Forced appreciation can be done in many different ways depending on the specific property you’re working with. A single-family home can be upgraded to include new appliances, better curb appeal, and even new countertops to enhance its value. Forced appreciation is always a viable strategy for passive rental property investments.

Can Reap Rewards From Seasoned Partners

Passive investing can easily be done by pairing up with those who are active, seasoned rental property investors. These individuals are the ones who go out and find the deals. You simply partner up by bringing investment funds to the table and enjoy a portion of the monthly or quarterly revenue.

Seasoned investors know that their investment strategy works. And, they know that the more money they can get access to, the more prosperity they can build. Therefore, many seasoned rental property investors are happy to work with passive investors to purchase properties and share the rewards.

You’re Dealing With Tangible Assets

As an investor, it can be daunting at times to invest in strategies that you physically can’t see the investment. Things like stocks and mutual funds aren’t what we think of as tangible assets. They’re on paper, for sure, but they can’t be touched.

Investment properties, on the other hand, are tangible assets. You can physically walk through the investment property. You can drive by it and know that you own it. There’s a big mental win when you invest in tangible assets instead of intangible ones.

Hopefully, this shortlist of passive rental property buying benefits has helped to show you some advantages that you may not have noticed. We want to continue to renew your interest in passive rental property wealth building strategies. Let’s move on to thinking about your future and how this investment strategy will make a world of difference.

Building Generational Wealth

When the term generational prosperity comes up in conversation, many immediately think of the powerhouse families like the Rockefellers, Waltons, Mars, and Kochs. These families are known for having massive wealth. However, what exactly is generational wealth?

Generational wealth is simply defined as passing down assets from one generation to the next. There is no defining amount of value in terms of money that must be met. Some people refer to generational prosperity as passing down assets of knowledge, not money, to future generations. Therefore, the assets described from ‘generational prosperity’ can be defined however you would like.

For some investors, generational prosperity may define the passing down of a specific amount of money to each of your children. For others, it may include passing down a successful wealth building strategy alongside money that you’ve developed to ensure the wealth of your future generations. You’ll need to define your own meaning of what generational prosperity is for you.

We’ll Work Harder For Others Than We Will For Ourselves

We’ve all been there where we find it impossible to get the motivation to keep moving forward in an endeavor. However, once successful in another endeavor, we tend to look back to determine why this one worked, and the other one failed. Many times, our success level is defined by our purpose.

When you think about passive investments, you may think of the things you can buy or do in the future. However, that passion really starts to come to life when we think about how our efforts will affect the people we care about. When you think about passive rental property investing beyond growing your bank account, it opens up the possibility of creating things like generational prosperity.

A bank account is simply numbers on paper. Creating a plethora of properties that your family can reap the income of for decades to come is motivation at its best. To know that the investment decisions you’re making today can leave a major legacy for your children, grandchildren, and great-grandchildren, is to truly have a purpose.

Working Because You Want

When you can position yourself to have a purpose well above just personal gain, suddenly, working becomes a passion. You do it because you want to fulfill that purpose. You no longer just think of investing as a side job. You think of it as your strategy to leave behind a legacy. Instead of judging your wealth building progress based on dollar signs, you can judge it on personal fulfillment.

When you focus on just money, you’re eventually going to lose your desire to invest. As you reach your financial goals, you’ll start to notice that you don’t have a desire to continue to build. The money you thought that was going to make you happy suddenly doesn’t seem all that important. This is because you lose your desire to grow and develop.

When you put effort towards growing your riches with the intent of providing for future generations, you make better decisions. When you think about others, you consistently get a renewed sense of desire to grow and build. Working is done as a means to bring happiness to others, which, in turn, brings happiness to you.

The Bottom Line About Passive Investments

Achieving prosperity through passive rental property purchasing is nothing new. Wise business people have done it for centuries. They’ve paved the way for today’s generations to grow their wealth portfolios and create lifestyles that they wouldn’t trade for the world.

Rental properties are a unique investment type that provides so many advantages. Immense leverage, forced appreciation, and being able to ride on the curtails of more seasoned investors are just some of them. Taking on the role of a passive rental property investor allows you to take advantage of all these amazing benefits.

As you continue to grow your assets through passive investing, it’s important to remember that you need to have a purpose. Whether your short-term purpose is to create a passive income stream that pays for your desired lifestyle or you have your eyes set on creating a legacy for future generations, you need to have a purpose to remain successful in this game.             

 

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How to Subtly Display Your Wealth

Maybe you’ve always enjoyed generational wealth. Or perhaps you’ve been working on your wealth building lately with passive investing and other investment opportunities.

Either way, you’ll need to consider a personal question: Should you flaunt your money? And, if so, what’s the best way to do it?

At one time, it was fashionable to show off money with the flashiest cars, the biggest mansions, the most prized real estate, and the highest-priced pieces of jewelry. Yes, ostentatiousness was in.

Today, however, social mores have changed somewhat. For rich folks everywhere, inconspicuousness has become trendy. Many upper-income individuals are finding understated ways to display their financial prowess. After all, there’s dignity in being discreet.

With that in mind, here are some subtle ways to display your good fortune. Better yet, many of the lifestyle choices described below will lead to extra happiness and personal fulfillment as well.

Health Is Wealth

Investing in your own well-being should make you feel more energetic every day. Not to mention, it could help you live longer. And, these days, when a person looks healthy and glows from head to toe, it’s a real sign of prosperity.

Therefore, you might want to spend more on haircare and skincare. For instance, going for a monthly facial at an exclusive salon or spa could provide you with numerous benefits. Your skin should be softer, smoother, cleaner, stronger, and more radiant. Your social circle is sure to be amazed.

In addition, you might set up a home gym with state-of-the-art equipment. And, of course, sessions with an expert personal trainer can work wonders.

On the other hand, you could join a pricey and exclusive gym. Such an establishment will offer plenty of space and privacy along with many benefits. Those perks could include celebrity fitness instructors, babysitting services, and opulent spas for post-workout relaxing.

Thus, going to the gym will be a pleasure, and you’ll look forward to your exercise routines. As a result, you’ll probably get fitter faster, and the results should last longer.

In all of this, don’t forget about nutrition. Avoid fatty and sugary foods. Consume a balanced diet with lots of lean, nutritious foods. Among many other benefits, it’ll contribute to your radiant appearance.

In fact, why not hire a personal chef and a nutritionist? They can design meals for you that are packed with healthy, organic ingredients. Believe it or not, with the right preparation, those dishes will be tasty and irresistible.

Moreover, whenever you’re hosting guests for dinner, wow them with foods like pasture-raised eggs and rare, incredibly expensive vegetables. Indeed, hop shoots and Le Bonnotte potatoes can be more impressive than the finest wines.

School Days

In the past several years, education has become a major expenditure for so many wealthy families. Americans in the top 1 percent of net worth now spend more than three times as much on education as they did during the mid-1990s. By contrast, middle-class families spend about the same amount on education as they did circa 1996.

It all starts with preschool. The priciest of preschools cost tens of thousands of dollars to attend. And they may offer such bonuses as climbing walls, drama programs, ballet lessons, introductions to robotics, gardens for exploring, swimming pools, yoga classes, libraries, and even artists-in-residence.

The educational advantages continue all the way through college. Some rich families hire live-in tutors, people who are experts in their academic fields. They may move to a new town or purchase a second home to be within walking distance of an elite elementary, middle, or high school. And they might fly around the country in a private jet to tour the nation’s most prestigious colleges.

Of course, education isn’t just for children and young adults. Instead, it’s a lifelong pursuit. And many wealthy individuals now work hard to show how self-educated they are. They discuss the articles they read in distinguished publications like “The New Yorker” and “The Economist.” They frequently refer to museum exhibitions and great artists. They read nonfiction and biographies, and they sprinkle tidbits from those books into their conversations. You get the idea.

With that in mind, whenever you get the time, try to do a little sophisticated reading — or have someone else do the reading and give you a summary. That way, you can share what you’ve learned with friends, relatives, colleagues, and others. Having the leisure time to do plenty of reading and the discernment to choose erudite subjects will surely impress everyone you encounter.

A Bespoke Life and a Private Life

If you’re flush with funds, you can really customize your lifestyle. Are you tired of fighting traffic on the freeway? Hire a driver. Do you have trouble finding things, but you don’t have the time or the inclination to clean your home top to bottom? Look for a professional house cleaner. Are you sick of getting dressed up for business meetings? Hold those meetings on Zoom, and dress casually for them.

With today’s gig economy and a website for just about any service, you can hire people to do just about everything. Obviously, doing so will give you more freedom to pursue your hobbies and interests. Or you could just increase the amount of time you spend with your friends and family.

Additionally, you might customize your life by making it more private, especially if your career requires you to be in the public eye. To that end, you might hire someone who could use a jamming signal to block your real estate from GPS systems. Consequently, anyone who tries to use GPS to find your home will be unsuccessful.

In a similar vein, some wealthy homeowners are moving into neighborhoods that won’t let Google take pictures. Therefore, Google Street View isn’t able to show photos of their homes, and residents receive an extra layer of privacy.

There are even homeowners who are boosting their privacy by going underground — literally. Building beautiful mansions with one or more subterranean floors has become something of a minitrend. That way, if war broke out or a natural disaster struck, you could still live in luxury under the ground. And you could go a long time without seeing your neighbors.

When you customize your lifestyle, you may find that your stress melts away. Your days may be more joyful and more productive. You might even look and feel better than ever before.

See the World in Unique Ways

For sure, jet-setting has always been associated with generational wealth as well as recently-attained wealth. And this kind of travel has always been full of perks: private planes, first-class hotels, private beaches, and so forth.

However, many people with mountains of disposable income now seek a special type of travel. It’s loaded with special amenities and personalized — there’s that word again — touches. In essence, you can make up your own perks as you soar from gorgeous destination to gorgeous destination.

How about a personal bartender, someone who could mix and serve you drinks right in your hotel room? Or, if you love art, perhaps you could tour a top museum after-hours. And your guide might be a local art historian or maybe even one of the artists featured in the museum.

As a high-net-worth traveler, you may even have access to exceptionally luxurious hotel rooms that aren’t advertised to the general public. Instead, they’re only available by request, and you can only find out about them through word of mouth.

On top of that, some wealthy folks are taking extended vacations nowadays — really extended vacations. Those trips can last for weeks or even months at a time.

With a top travel specialist making arrangements, you might be able to procure any experience you can imagine. Whether it’s racing a Lamborghini through Italian streets or hang gliding over architectural wonders in China, the world is yours for the taking. And the social media photos you’ll share afterwards will really show off your wealth building skills.

Give, Give, Give

Finally, a great way to flex your bank account is through charitable giving. That way, everybody wins.

Giving generously to charities and causes that are important to you will surely warm your heart. Plus, it’ll make a real difference in the lives of people who need it.

Likewise, when a friend or loved one has a truly special occasion — a graduation, a wedding, a retirement party, or a similar event — you might spring for an expensive gift to express your admiration. It’s sure to be long remembered and appreciated, and it should come as a happy surprise.

As you can see, the above measures for displaying wealth are tasteful, cultured, and socially acceptable. They revolve around experiences instead of hard assets. They’ll let you create invaluable memories rather than collect invaluable items. And they’re all available to you if you rely on the right investing strategies, including passive investing.

In short, though none of these lifestyle choices are conspicuous, they all send a powerful message. They’re status symbols, but they’re classy and meaningful status symbols.              

 

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Justifying College Tuition? – Check Out These Numbers!

Every year I am astounded by the rising cost of college tuition and I feel for the students lining up to pile on massive debt before they even have a chance to start earning an income or know what job opportunities might be on the other side of this 4-year commitment. USA Today recently published an article stating the average cost of tuition in the U.S. is now around $48,510.

It’s been more than a decade since I graduated from college and my perspective has not changed. At age 18, if I had to pile on $48,510 in debt in order to obtain a 4-year degree, I simply would choose not to attend. If I had $48,510 sitting in cash, I would question very seriously if a college degree was the best use for my capital.

Before the hate mail starts rolling in, allow me to clarify… I am not advocating that your high school graduate should not attend college; however, I do think it’s worth asking yourself the question:

What is the ROI (return on investment) from a 4-year degree vs investing that same amount of money?

I ran an analysis for educational purposes. I am well aware that college is not only about dollars and sense. There are certainly reasons to pursue a college degree despite the financials and there are many careers that 100% require a college degree. But since I am a nerdy numbers guy and an investor, I’m ran the numbers for those like me who are interested in this kind of “fun”.

College Tuition Cost 2020-2021

In addition to the USA Today article mentioned at the beginning of the blog, I came across an article on usnews.com which compares the annual cost of college from in-state public institutions, out-of-state public institutions and private colleges. We can conclude from the information and surveys conducted in these articles that $50,000 is a conservative figure for how much a student might spend on 4 years of college tuition these days.

How Much Do High School and College Graduates Earn?

Now that we know the average tuition costs, we need to better understand what a typical 4-year degree graduate earns in salary vs what a typical high school graduate earns. To help answer this question, I will reference The Bureau of Labor Statistics (BLS) which reports that Americans with a bachelor’s degree have median weekly earnings of $1,198, compared to $730 a week for those who have a high school diploma. To convert these into annualized figures, that is $57,504 (bachelor’s degree) vs $35,040 (high school degree).

Long-Term Investing Returns

I chose to use a 9% annualized return figure to represent the “alternative to college” investing scenario for two reasons. First, 9% is based on the historical stock market returns since inception (1926 to 2020) and secondly 9% is a conservative figure based on my actual real estate cash flow performance (2009-2020).

Let’s Compare The Two Scenarios:

Scenario #1 Johnny chooses to pursue a 4-year degree and spends $50,000 his parents saved for him to attend college. After graduating, Johnny finds a job that pays him $57,504 a year and receives 4% raises for the next 20 years. *Note: For sake of this example, I am not factoring in the added cost and complexities of financing the tuition; many students have this added to their plate as you and I know.

Scenario #2 Sally chooses to enter the workforce after graduating high school and ties down a full-time job earning her $35,040 a year and also receives 4% raises for the next 20 years. However, rather than spending the $50,000 her parents saved for her to attend college, Sally chooses to invest this capital into the stock market and real estate instead.

Now, let’s fast forward 20 years…

Scenario #1 Since Johnny spent the first 4 years after high school attending college, that means he has been earning a steady full-time salary for 16 years in a row and has been receiving 4% annual raises. Johnny now earns an annual salary of $107,703.91 thanks to the continuous 4% raises. In total, Johnny has earned $1,305,190 in his working career.

Scenario #2 Since Sally did not attend college after high school, she has been working for 20 years in a row and has been receiving her annual 4% raises as well. Sally now earns an annual salary of $76,776.95 thanks to the continuous 4% raises. In total, Sally has earned $1,085,160 in her working career. But wait! What about the $50,000 investment Sally made 20 years ago? The current valuation of her investment is now $300,457.58 thanks to the 9% annualized returns she’s been earning. When you deduct Sally’s initial contribution of $50,000, she has earned an additional $250,457.58 on top of her $1,085,160 salary earnings. Combined, Sally earned $1,335,617.58 compared to Johnny who earned $1,305,190.

Sally exceeded Johnny’s earnings over 20 years without a college degree AND she kept her initial $50,000 nest egg.

The Power of Investing Prevails!

On a serious note, college is a big decision and is offered at an ever-increasing cost. While college may have been a wise investment in 1971 when tuition was about 1/10th of the cost today, it’s worth asking yourself some tough questions if your children are considering attending:

#1 Is the decision to attend college based on social pressure, peer pressure or the negative stigma of “not attending”?

#2 How much of a setback would $50,000 of debt be on your child? How about $100,000 in debt? At what price, does college stop making sense?

#3 Does your child have a strong “WHY” for attending college?

#4 If your child’s desired career path does not require a college degree, then does college still make sense? Consider business owners, sales professionals, entrepreneurs, and vocational trades for example.

I’d love to hear your thoughts. Feel free to reach out with any comments or feedback. Thank you for reading.

 

To Your Success,

Travis Watts

 

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The differences between High Net Worth Individuals & the ultra-wealthy

Although there are a lot of similarities between high-net-worth individuals, those with a net worth of more than $1 million, and ultra-high-net-worth individuals, people with a $30-million-or-more net worth, several significant differences exist as well. These relate to how they earn and spend their money, and they relate to how they go about their lives away from the financial aspects of them.

Worldwide portfolios

Ultra-wealthy individuals are more apt to spread their portfolios around the world. This does not necessarily indicate that this is the best strategy for wealth building, but some do view this strategy as a way to manage risk. If one area of the world is going through challenging times, those with worldwide portfolios will be less adversely affected as compared to those who have investments predominantly in that troubled area.

Age differences

The average age of ultra-high net worth individuals is 63 while the average age for all high-net-worth individuals is 58. Interestingly, however, some countries are home to much older and much younger ultra-wealthy people.

A few examples at one end of the spectrum include France, which has an average age for these individuals of 74, and Brazil and Hong Kong, both of which are home to ultra-wealthy individuals with an average age of 68. At the other end are countries such as Russia (49) and China (50). Many of the younger individuals are self-made and still settling into what they would like to do with their money. For example, the philanthropic rates amongst younger ultra-wealthy individuals are lower than is the case for their older counterparts.

Working differences

Ultra-wealthy individuals are more apt to decide whether or not to work and how much work to do based on their personal drive to do so or lack thereof as opposed to feeling like working is a must. Of course, anybody with enough money to ensure that their basic needs are met has the freedom to do this, but those who are ultra-wealthy tend to lean much more so in the direction of only working because they want to.

One of the reasons for this is because many ultra-wealthy individuals get more pleasure out of wealth building than they do when they spend any of it; they have the mindset that spending less helps them get wealthier at a quicker rate. Instead of spending, they invest that money in real estate and other wealth-building activities. Earning compound interest whenever possible is of special interest to these individuals. Some view this spending-avoidant mindset as the primary difference between these two groups of people.

This difference in mindset does not necessarily mean that one way of thinking is preferred over the other. Perhaps you love earning enough to spend on the things that you enjoy and do not mind not being ultra-wealthy as a result. However, if reaching ultra-wealth status is of importance to you, focusing more on earning money and less on spending it appears to be a must.

Subtler displays of fortune

Those who are ultra-wealthy also tend to display their wealth in subtler ways. One example is Warren Buffett. He bought a house in 1958 that cost just $31,500 – $285,000 in today’s money – and still lives in it, he tends to eat $3 McDonald’s meals, and he usually get haircuts for less than $20. He also resisted making the move from a flip phone to a smartphone until 2020. Meanwhile, his estimated net worth puts him well in the ultra-wealth category: $80 billion.

Another example is Mark Zuckerberg. He tends to dress in a casual style, consisting of a t-shirt, jeans and sneakers. Although he spends more for those items than most do – his t-shirts often run him around $350 each – his look is still casual. He also tends to wear the same clothes on a daily basis.

Ultra-wealthy individuals also tend to place greater value on experiences than they do on physical items such as boats, bags and clothes. The former group particularly enjoys taking advantage of various types of travel and educational experiences. Another way to look at it is that these individuals put more of a focus on luxury lifestyles over luxury goods. Conversely, those with a net worth closer to $1 million are more apt to spend that money on items that help display their wealth to others.

Retirement comes later, if at all

People with this level of income tend to also view retirement as something that comes later than is the case for other individuals with many of them aspiring to never retire. Buffett is also an example of this latter category as the 90-year-old still spends numerous hours a day reading financial reports and statements and recently said that he has no plans to retire. Another example is Jorge Paulo Lemann, who has a net worth of $25 billion. He recently said that it’s a “horror” that people in Switzerland tend to retire at 60 while not seeing anything wrong with doing so.

Of course, some do prefer to use their money to retire early. It all depends on what you are looking to get out of the benefits you have received by smartly investing and otherwise taking care of your money. In fact, that latter mindset has been the driving force behind the FIRE movement; that acronym stands for, “Financial Independence, Retire Early.” One of the ways that they are able to do this is by resisting spending more on rent, cars and related items when they receive additional funds and to instead devote that extra income into passive investing and similar ventures.

In order to retire early, many people save 25 times their annual living expenses, a multiplier more than twice the normal figure of 12 that those hoping to retire in their 60s do since the members of the former group plan to be retired for a much longer time period and will need that extra money. Those who want to also pass on generational wealth tend to save an even higher multiplier.

Riskier investments and less stable fortunes

One con that the ultra-wealthy endure is being especially susceptible to any market volatility since their portfolios are generally equity-heavy. One example of this volatility occurred during the 2019 protests in Hong Kong, where its 10 richest people lost a total of $15 billion within a few weeks. Li Ka-shing, the richest, lost $3 billion and even took out advertisements, hoping to help calm those protests, including one that said that “the best of intentions can lead to the worst outcome” and an encouragement for those involved to “stop anger and violence in the name of love.”

Of course, a strategy of investing in riskier money-earning ventures makes sense to ultra-wealthy individuals as they have much less to lose than those who have fewer funds available to them; someone with a net worth of $30 million can afford to lose $1 million while someone with a net worth of $1 million cannot. Examples of these riskier investments include private equities, hedge funds and some types of real estate. As a result of this strategy, they do tend to experience more long-term success, but the volatility of those types of funds often results in partakers who are not as wealthy to more easily experience precarious situations.

Receiving little sympathy

Those who are ultra-wealthy are also more apt to be viewed by others as not having the right to experience angst and stress or, more to the point, to complain about it. However, in some ways, these individuals have less hope as they are not in a place in their lives where they can believe that money will make them happy; if that has not happened yet for them, it is likely not going to.

As a result of this general mindset that most people have, billionaires often feel isolated, unable to find a sympathetic ear. They also tend to struggle with trusting people and are usually surrounded by those who simply endorse their worldview and are neither honest nor challenging with them.

Differences also exist amongst the ultra-wealthy. Those who are part of families that have experienced generational wealth tend to have learned behaviors, for better or for worse, as opposed to those who were the first in their families to succeed with passive investing and other types of money-earning ventures.

Simply put, according to Brad Klontz, a psychologist who works with ultra-wealthy individuals, they have “different problems but not a lack of problems.”

Rules do not apply to them, which is a strength

Another point that Klontz has made is that ultra-high-net-worth individuals are more apt to not feel that rules apply to them. In their minds, being told that something cannot be done does not stop them in their tracks. It causes them to be more innovative with their thinking as they figure out a way to get through or around what would prove to be obstacles for most.            

 

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It’s About Who You Know and Holding Onto Those Relationships

A common saying is that it’s not what you know, but it’s who you know. Is this true? It is but only to a point. Plus, it’s important to consider how important who you know is to your personal life. Although that saying is generally referring to a business setting, who you know in your personal life, the people you spend time with, has a tremendous impact on the overall quality of your life.

Who you know: wealth building

One of the most significant factors in wealth building is the knowledge that you have leading into your monetary decisions. This is true for those who regularly engage in passive investing, and it is also true for people who focus on active investing. Regardless, you want to research what you are considering devoting money towards as efficiently as possible to ensure that the odds of receiving positive returns are as high as possible.

Of course, much of that research can be done without interacting with anybody else. However, that same research is often also readily available to others making similar investing decisions. What will set you apart is knowing people who can provide you with information that is not otherwise available. For example, if you are considering a real estate investment, someone you trust may have accurate reads on the person selling, on the area it is in and on what the future may hold for it.

Who you know can also end up improving your ability to interpret the information that you do come across. All of us can remember teachers that we have had who resonated with us. There was just something about their teaching style that clicked with how we learn. The same is true in investing. Knowing someone who can make investing-related information click for you is an invaluable resource to have.

Who you know: personal benefits

Who you have had in your life has had a tremendous impact on making you the person you are today. Of course, your family members may have had the most impact, but also impactful have been friends you have had, teachers who have taught you lessons and even the communities that you have been a part of. The latter point relates to places such as cities, universities and work organizations that you were a member of.

As far as societies go, a few commonly known examples of how communities influence who we become can be seen in Italians regularly gesticulating in getting their points across and Russians, for the most part, not smiling and even viewing those who do as less intelligent. Studies have also shown that, for example, those from northern Europe are generally more conscientious than their southern European counterparts.

Connected with that last point, parenting plays a pivotal role in shaping children’s’ minds. That is expected when you consider how much time many parents spend with their children. In fact, a distinct lack of time spent with their children has a profound effect as well. However, first, parents are themselves influenced by the societies that they were in before they pass on their adopted values and mindsets.

Your friends and relationship partners also shape who you are as a person. For example, being in a relationship or a close friendship with someone who sees you as the person you would like to be generally results in you happily becoming that person. Conversely, those in your life who view you as someone you do not want to become will have an adverse influence on who you become and on your state of mind.

Family members, friends and relationship partners also influence the types of things that we enjoy and the things that we do. This alters not only how we spend our time, but it also plays direct and indirect roles in how our wealth is used. Many of these influences can be subconscious in nature, meaning that you do not always realize that it is happening at the time that it is or even afterwards.

Holding onto those relationships

Now that you know how important these relationships are to both the business and personal sides of your life, you likely know what is coming next: the importance of holding onto those relationships. First, if someone is serving as a negative influence on your life, you will want to reduce their impact on it as much as can be done when taking the entire picture into consideration. But when you do find those who positively influence your life, it is important to ensure, when possible, that they remain a part of it.

Of course, we cannot ensure that every person in our lives will have a positive effect on us. However, we can ensure that those we surround ourselves with positively influence us as much as possible. In other words, focus on what you can control, and do your best to keep people around you who embody that positivity and productivity. Do the same for specific traits that you would like to maintain or increase in your life, such as confidence, healthiness, peacefulness, being driven and being content. Keep the people in your life who you want rubbing off on you.

One of the best ways to hold onto these relationships is to be giving yourself. Consider how you are influencing others. Are you somebody who positively influences others, both in general as well as those who are influencing you in ways that you would like them to? If you are someone who they would like to keep in their lives, it will be much easier for you to keep them in yours.

Cultivating those relationships

Not only should you make sure to hold onto these valuable relationships, but you should also continuously improve the cumulative effect that others are having on your life. One of the best ways to do this is by continuing to meet people. That will generally result in positive effects in your life that are related to both the business side of it – i.e. real estate, passive investing, generational wealth, etc. – as well as the personal aspects of it.

One way to do this is by attending events that are of interest to you. Not only will the event itself engage your mind, but you will also meet a number of like-minded people while there. That is just as true of a real estate convention as it is of an NFL game or a Taylor Swift concert. In addition to the personal benefits of being with people who share your interests, you may also discover ways to use your wealth that will improve aspects of your life that are important to you – e.g. devoting funds to an arena.

The internet is also a great means for meeting the type of people who you want influencing your life. If you would like to meet those who are experts in growing generational wealth so that you can become more knowledgeable about it, search online for them. You can also do the same as it relates to inspirational people and to those who share your interests.

Also, make sure to keep in mind who you are following on social networking websites such as Facebook and Twitter. The words that you read influence who you are and who you become. Yes, for the most part, we can ignore trolls, but also ensure that you limit the messages that you come across that are not going to help you get to where you want to be emotionally or financially.

Also consider the books that you are reading. Those authors are people influencing you as well, and you may or may not want to keep them as a part of your life.

Note that you may also be surprised at who turns out to be an especially positive influence. Think about relationship partners and friends you have had. In some cases, their impact on your life unexpectedly evolved from initially being negligible, that of acquaintances, for example, to them turning into some of the most important people in your life.

Do not overvalue the importance of who you know

As important as who you know is to our lives, it is also essential to not overvalue that importance. From a work perspective, having connections that will increase the chances that you will receive that interview or even that coveted position is great. However, your long-term success will be based just as much on your ability to do that job that you have been offered.

You should also consider that your aptitude at that position that you received will go a long ways towards causing those you know, those who helped you get it, to continue to speak positively about you to others who can also help you reach the places that you want to reach. As a result, do place a tremendous amount of emphasis on your aptitude for the task as well as who you surround yourself with.            

 

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How to give a hand in unexpected ways

Volunteering and donating money provide a myriad of benefits, both to the people doing the giving as well as the recipients. Of course, we all know of the common ways to give a hand. These include donating money to worthy causes such as the Wounded Warrior Project and the American Red Cross and donating time to places like homeless shelters and children’s hospitals. It is great to spend your time and some of the benefits of your wealth building on these sorts of things. However, consider not limiting yourself to the commonly known options. Also branch out to other types of activities.

Benefits of volunteering time and money

Regardless of how you decide to volunteer your time or money, it is important to note the benefits that you and others will experience.

A benefit to consider is doing activities such as these as a family. One of the best ways to get your children into the habit of using any generational wealth that they are fortunate enough to have received on others is to have them engaged in volunteering activities from an early age. Doing so will help them see the world from a different perspective.

It is also important to teach that the difference between those who have wealth and those who struggle is often much smaller of a margin than many young people and even adults realize. The more time that is spent volunteering helps make this point clear to those taking part in these activities.

Donate a used or scrap car to charity

One of the most significant ways that you can use the benefits of your passive investing to help others is by donating your used or scrap car to charity. If it is still running, this vehicle can be such a welcome surprise to someone who needs it to get to and from work or school. If it is not, the money that is earned from the value of its metal and parts can help an individual or charity organization.

Also consider donating bicycles. Many people rely on them for transportation but cannot afford them.

Donate your time to an elderly person

Although the monetary benefits of investing are significant and it is great to pass on what you have earned to those in need, donating your time can often be more meaningful to those involved. In many cases, elderly people do not speak to others on a regular basis and could really use these types of interactions to keep from feeling so isolated from others and to live richer lives.

Deliver food

A great way to combine donating items of financial value with donating time can be done by surprising those in need with personally delivered food. This can be food that you purchased or dishes that you cooked yourself. Regardless, having a bright face at the door delivering it and willing to stay a while exponentially increases the surprise factor and the overall value of this type of donation.

Host dinner, sell tickets

Hosting a dinner is a great activity in and of itself as spending time with the ones you care for is a fun way to spend your time. Consider combining doing this with providing a helping hand to those in need by selling tickets to your dinner. You could create an evening that is focused on providing information on real estate with all of its proceeds going to a charity. You could also utilize a raffle-type scenario with half or more of the proceeds being sent to those in need. Consider also incorporating a theme to help your guests more fully get into the festivities.

You could also inform your guests in advance that donations in any amount will be accepted in lieu of selling tickets with those attending donating whatever figure is right for them.

Participate in a pie-in-the-face challenge

This may be a common way to secure donations from others – offering your face to be splattered with a pie if a certain donation amount has been met – but it can also be completely unexpected, depending on your personality. In other words, if you are the type of person who others could not imagine ever taking a pie to their face, this would be a great way for you to shock them and, as a result, greatly help your cause.

You could even offer to do this as a family. However, ensure that every member of your family is 100% comfortable with this as pressuring someone to do it who is not comfortable with the idea should be avoided.

Share your pet

Do you have one or more beloved pets scurrying around your own real estate property? Consider sharing your furry friends with others. Some organizations focus on providing means for critters such as yours to brighten the lives of others. You can also check with local community service organizations to see if they or anybody they know organize these types of activities.

Foster a pet

What foster parents do is commonly known, but not nearly as common is the act of fostering a pet. If you would like to own a pet but just for a limited time, this is a great option. You could give a dog who is recovering from heartworm treatment a safe place to do so until it is healthy and ready to be adopted. You could also provide a temporary home for kittens or puppies.

Fulfill wish lists provided by hospitalized children

A touching way to use your wealth to surprise people is learning what hospitalized children have on their wish lists and fulfilling one or more of those wishes. If you are able to learn what specific children have on their own wish lists, it is great to take care of one or more of those items. However, this may not always be possible for privacy and other reasons. In lieu of that, see if a local hospital has a general wish list, and offer to secure some of those items for that facility’s children.

Volunteer at poetry events

A unique way to donate your time is by volunteering at poetry events. If you spend some of your time away from investing and researching investing opportunities on creating poetry, consider sharing that passion with others. In many communities, numerous poetry-related volunteering opportunities exist, and you may be able to help children and adults cultivate that same love of poetry.

Also consider that, if you spend much of your time with other types of artistic activities, similar opportunities are available for musicians, sculptures, photographers and non-poetic writers.

Share your knowledge with at-risk youth

Subjects such as wealth building and passive investing may be second nature to you. If so, consider sharing that knowledge with others, including at-risk youth. Show how the future can include activities such as these and how a more positive life can be had than what they may have experienced so far.

Donate greenery

An interesting way that many unexpectedly give a hand is by using their generational wealth to donate greenery. This can include providing wreaths, plants and small trees, and it can also include substantial donations of swaths of beautiful grass or even acres of tree-adorned land. These unexpected gifts could be given to places such as museums or to individuals who will appreciate the beautifying of their homes.

Paying it forward

Although paying it forward is a well known method of donating money, it is generally completely unexpected by recipients. Consider selecting a day and doing this multiple times in multiple locations on that day. Offer to pay for the person in front of or behind you in line at a coffee shop, fast-food restaurant, grocery store, sports facility and other venues. Another common way to pay it forward that is known to especially surprise beneficiaries is to take care of people’s layaway items.

An additional option would be to leave especially large tips for those in the service industry.

Carry and give thank you bags

Keep one or more small bags with touching items inside them with you, and give them to those who have done something particularly nice, whether that was to you or to someone else. Few things are more unexpected than a gift from a stranger after doing something of a giving nature. This is a great way to provide a positive feeling to others and to spread positivity to those you do not know.

Brainstorm

Of course, the best way to unexpectedly give a hand is to do something that has not been done before or at least something that would most likely shock those on the other end of this positive deed. So, make sure to also brainstorm yourself, and see what volunteering ideas you can come up with that are not amongst the common ones that most have heard of.

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Stoicism & Real Estate – How To Be A Stoic Investor

Stoicism was an ancient philosophy of life that was very popular for hundreds of years in ancient Greece and Rome but its wisdom can still apply to us today. It is my belief that Stoicism can help you and I become better investors while being more fulfilled in the pursuit of our life-long goals.  

Make no mistake, Stoicism is not a religion; rather, it was more a form of personal development and moral guidance. Stoicism’s most famous practitioners were engaged in society in roles such as statesmen, writers, teachers, merchants, emperors and even slaves. 

Marcus Aurelius the Roman emperor from 161-180 AD was one of the most famous Stoic philosophers. Other famous Stoics include Seneca, a wealthy adviser to the Roman emperor Nero, and Epictetus, a former slave who later became a teacher to the elite of Rome.

Stoicism has very practical ideas that you and I can apply in our own life. Let’s explore a few practices that we can use as real estate investors and entrepreneurs.

The Philosophy = The Art of Living

According to Epictetus, the primary concern of philosophy should be the art of living; just as wood is the medium of the carpenter and bronze is the medium of the sculptor, our life is the medium on which you practice the art of living. Let’s break that down a bit further… 

The root of the word philosophy comes from the ancient Greek words “philo” meaning love and “sophia” meaning wisdom. Wisdom in this context was less about abstract knowledge and more about practical knowledge in life. Essentially, philosophers were lovers of knowledge and the art of living. 

In today’s world, most of us spend the majority of our time in a career earning money. Many philosophers today also embrace money; however, most of them learn to use money so they can spend their time doing what matters most to them. This is a fundamental concept that I have been teaching for years. The reason I transitioned years ago to a passive investing approach (in regard to real estate) and why I have a passion for educating others on this topic is really quite simple. The ability to create multiple income streams that can pay for lifestyle expenses, provides the ability to free up our time so we can pursue what matters most to us. This, as compared to trading our time in exchange for money in a career or job we may not be passionate about or being caught up in the corporate “rat race”.

“If you don’t find a way to make money while you sleep, you will work until you die” – Warren Buffett

The Foundation of Stoicism

“The chief task in life is simply this: to identify and separate matters so that I can say clearly to myself which are externals not under my control, and which have to do with the choices I actually control.” – Epictetus 

 

The foundation of Stoicism is simply this… some things you can control and some things you cannot. The only things you can control are your thoughts and behaviors in the moment. External events, the opinions of others, the past, and the future are all outside your control. Therefore, focus on what you CAN control. 

I recently read the book Man’s Search For Meaning, which highlights the life of Viktor Frankl during World War II. The Nazis in Germany had killed his family and put Frankl in a concentration camp for several years. Out of this most extreme of hardships, he learned one simple truth:

Everything can be taken from a man but one thing: the last of human freedoms – to choose one’s attitude in any given set of circumstances, to choose one’s own way.

 

While Frankl was not a self-proclaimed Stoic, his ideas echo in the core of Stoic philosophy. Frankl has taught millions of people through his books and lectures that we all have a choice in how we respond to the circumstances of life.

So how do we apply this to our own life?  Like any skill, we have to learn it and practice it consistently. Below are a few quotes that I found useful while reading The Daily Stoic, a book written by Ryan Holiday which contains 366 meditations from the ancient Stoics. 

“We might not be emperors, but the world is still constantly testing us. It asks: Are you worthy? Can you get past the things that inevitably fall in your way? Will you stand up and show us what you’re made of?” – Marcus Aurelius

Let’s relate this to real estate. Have you ever had a problem renter, an investment that lost money, or a business partnership that went bad? I know I have, and I often get anxious and stressed when these things happen. This is where Stoicism can help. 

Since we cannot control the behavior of a tenant, market conditions, or other people’s reactions and opinions; we must consider what we CAN control, which are our own behaviors and reactions. When a challenge or stressful situation arises, try to pause and not immediately react for a few moments. Then, look objectively at the situation and remind yourself that this is only a challenge; not a threat. Ask yourself “what is in my control?”

 

This simple practice reframes a “problem” from something that threatens into an opportunity to grow. Think of challenges like competing in sports or playing a game. The feeling of a challenge is completely different than a threat. A response to a challenge is much more productive, helpful, and enjoyable.

 

The Power of Simplicity 

“Set aside a certain number of days, during which you shall be content with the scantiest and cheapest fare, with coarse and rough dress, saying to yourself the while: “Is this the condition that I feared?” … Let the pallet be a real one, and the coarse cloak; let the bread be hard and grimy. Endure all this for three or four days at a time, sometimes for more, so that it may be a test of yourself instead of a mere hobby. Then, I assure you, my dear Lucilius, you will leap for joy when filled with a pennyworth of food, and you will understand that a man’s peace of mind does not depend upon Fortune; for, even when angry she grants enough for our needs.” – Seneca

My days in college taught me so much about Stoicism, but I didn’t know it at the time. I was broke during that period of my life, but I refused to take on student loan debt or credit card debt to get through this phase of life. I limited myself to $6 a day for food, I slept on an air mattress for over a year, I drove a $2,000 car that didn’t have air conditioning (in Florida) and I asked for clothes and practical everyday living items as Christmas gifts rather than acquiring the latest gadgets and fads. During this time, I earned approximately $8,000 a year working part-time until I landed my first “real” job after college…which paid $10 an hour.  

I am fortunate that I had an opportunity to live this way; I learned how to be happy while desiring very little. What was important were my friends, having a loving and supporting family, and learning so much about life during this time. I’m not sure that school itself taught me very much, but I had my basic human needs covered. I was a happy minimalist.  

It’s easy for us to become accustomed to material circumstances; I found this out later in life. But with each move up the comfort ladder, we often become unsatisfied once again and feel that we need “more” to be happy. This is a trap! There were several years where I bought fancy cars, expensive homes, brand name clothing, high-end watches and many other non-essential luxuries. Why did I do this? I suppose for a brief time, I thought that was the American way?

Here is the interesting thing. Taking away some of the comforts and securities that I took for granted, turned out actually making me happier. Cooking food at home rather than eating out, downgrading from a luxury home that I owned to renting a 645 square feet apartment instead. My wife and I even sold our Porsche SUV and exchanged it for an eco-friendly hybrid car. Here’s the thing. Did you know the average individual income worldwide is around $10,000 per year? If you’re reading this post, you already hit the lottery. 

Wealth consists not in having great possessions, but in having few wants – Epictetus

 

The lesson: Your life will not fall apart if you decide to experiment with removing unnecessary items. Practicing simplicity can positively interrupt the consumer programming we are all exposed to in the modern world. As a real estate investor pursuing financial independence, living with simplicity can help you make better decisions about what’s really important in life, and what is not…

For more on this topic, check out my blog post “High Net Worth Frugality – How To Save Like The Wealthy” 

Your Life Is Your Masterpiece

“Be true to yourself, help others, make each day your masterpiece.”– John Wooden 

The ultimate virtue for Stoics was a Greek word called arete. It’s translated as “excellence” or “virtue.” To me, this is about striving to do your best in each moment. If in this moment you apply these philosophies with excellence, you are living with arete.

How can arete relate to real estate investing and the pursuit of financial independence? Try asking yourself as an investor; how can I play this role with excellence? Am I willing to overcome the challenges that will be placed upon me? How can I make this moment, and the next, part of my masterpiece?

This game of life to become our best is an ongoing pursuit, and that’s a great thing. Striving for arete is a daily mission, moment-by-moment, until we take our last breath. 

I hope you found these Stoic practices to be helpful. What is one Stoic principal you can implement in your life, starting today?

To Your Success

Travis Watts

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The only suits you need for every occasion

Most men have heard that they need to own at least one good suit, but the reality is that you will need several suits to wear for various types of events and occasions. With your focus on wealth building and passive investing, you understandably are focused on reinvesting as much of your wealth as possible into real estate and other types of investments. However, it is also important to invest in yourself.

When you look at bold suits worn by sports commentators on TV and then at the classic suits worn by top business executives, the incredible variation in options is apparent. The reality is that there is a perfect suit for every occasion, and some suits may work well for multiple occasions. Nobody wants to run out at the last minute to shop for something as important as a suit. Now is the perfect time to shift your focus away from generational wealth for a moment and to focus on sprucing up your wardrobe.

Elegant Evening Attire

 

What will you wear on a fancy dinner date? The right suit may work just as well for that date as it would for an awards ceremony, a formal evening wedding and other similar events. For this type of suit, consider a darker color. If you want to maximize the life of your suit, consider traditional colors like black, navy and gray. Slim-cut suits are in style now, or you can choose a traditional fit for timeless appeal. Your suit should also be well-suited for your body type. For example, larger men may look better and feel more comfortable in a jacket with two vents.

 

A Professional Suit for a Special Business Function

 

You may be able to find a multi-functional suit that is ideal for evening use and professional use. This is not your run-of-the-mill work suit. Instead, it is reserved for job interviews, power meetings with other real estate investors or lenders and other special business functions. The attire will make a bold statement about your success and wealth. Depending on your personality and your unique style, a classic evening suit may work great for this purpose as well.

 

A Casual, Daytime Suit

 

Men who focus on passive investing may spend many leisurely days in comfortable clothing, but there will be times when a casual suit for daytime use is needed. During the warmer months of the year, lighter colors and fabrics may work well. Think about khaki, light brown or light gray. In some situations, it may be suitable to take the jacket off and to show off a well-tailored shirt with cuff-links and a stunning tie.

 

Office Attire

 

If you are still focusing on wealth building, you may need to wear a suit daily to the office. The specific style of suit and colors that are suitable for one office will vary from what is acceptable in another office. Generally, it is acceptable to purchase solid pants with a printed or off-color jacket. This matched style may not look right for evening attire because it tends to be more casual. However, pairing the slacks with a jacket can give the professional look that you need while you are at work. In most offices, you may need to keep the prints and colors on the tame side.

 

A Smart Suit

 

When you need to look sharp without looking like you are trying too hard, a smart suit is the perfect option. You may be able to mix and match pieces from the other suits that you have acquired to put this look together. For example, you can pair nice slacks with a more casual button-down shirt, no tie and a sport coat. On the other hand, you could also dress up a pair of nice khaki pants with a button-down shirt and a nicer jacket.

 

A Somber Suit

 

While nobody wants to think about attire for a somber occasion, the time to plan for these events is before they arrive. Dark colors are expected at these events. You want to look respectable and respectful. Avoid making a bold statement with your attire. Remember that there is a time and a place for all types of attire.

 

Essential Factors to Consider When Selecting a Suit

 

With so many suits available to choose from, the color and style are only some of the factors to pay attention to. Both the fit and the material will impact your experience in a specific suit. Before finalizing your purchase plans, turn your attention to these factors.

 

Tailoring

 

For some men, investing in a custom suit that is tailored perfectly to their form is worthwhile. For others, buying a suit off the rack is a better option. If you opt for the latter solution, be aware that most men will not find a suit that fits perfectly on a rack. You should plan on visiting a tailor so that essential modifications can be made. Your shape will change over time, so you should plan to have your best suits tailored periodically until they need to be replaced.

 

Material

 

It is easy to overlook a suit’s material and to focus on its style and fit. However, material will impact the suit’s longevity and durability. It will also affect how comfortable you feel wearing the suit. The texture of the material may also make a statement about its style. What are the most common types of suit materials?

 

  • Wool: This material is natural, soft and easy to care for. Because it is a breathable fabric, it may be suitable for wearing on both warmer and cooler days. However, some men find that it is too bulky for their taste.
  • Worsted Wool: This is a unique type of wool that is both durable and smooth. Its special qualities are the product of the material’s combing and carding processes. Worsted wool may also be used in tweed jackets.
  • Cashmere: Cashmere is another type of wool, and some cashmere is a wool blend. This material is known for having a beautiful sheen to it. The sheen may make it better suited for evening attire than for daytime or professional attire.
  • Cotton: Cotton is a lightweight, durable material that may be used in more affordable suits. Its properties make it ideal to wear for outdoor events and during the spring, summer and fall months. While it is a breathable material that is comfortable to wear, it can wrinkle and crease easily while it is being worn.
  • Linen: Linen generally is a lighter material than cotton. It is preferred by men who live in very warm climates. However, it is prone to staining and wrinkling. If you purchase a linen suit, you may need to dry clean it after each use.
  • Polyester: If you want to save money while investing in a suit, a polyester or polyester blend suit is a smart idea. This synthetic material has a modest shine to it that you will not find in a wool or cotton suit, so its lower quality may be apparent when you wear it. Because polyester is durable, however, it may be a good material to choose for an everyday suit.
  • Other Materials: Suits are also made using special materials, such as silk and velvet. These are high-end materials that are generally not suitable for everyday use, casual use or sophisticated formal events. Instead, they may be a better option for trendier occasions. These suits will require special care after each use to keep them looking great.

Colors and Prints

 

The most traditional colors of suits are black, navy, blue, charcoal and gray. While many suits continue to have a solid hue, it is increasingly common to see stripes, plaids and other designs. The variation in colors and prints may also extend to accompanying vests. The color or print of a suit may make a bolder statement than the suit’s cut, so careful consideration in this area is important. This will also impact how versatile the suit may be for use for other purposes.

 

Shirts, Ties and Shoes

 

The look of your new suit will be directly affected by the accompanying clothes and accessories that you choose. The tie and shirt require special attention because of how visible they will immediately be to everyone who glances your way. The shoes should never be an afterthought. When you invest in a pair of quality shoes, you will make a solid statement about your style from top to bottom.

 

Focusing on building passive income streams and establishing generational wealth are primary goals, but there are other factors to consider. You want to look as successful as you are, so investing in a new suit or two soon is a smart idea.

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How To Improve Your Public-Speaking Ability

Public speaking is one of the most important skills that you can have. It’s also one of the greatest fears that many suffer from. However, there is much that you can do to improve your ability to speak before small and large audiences. Being better prepared, which will reduce your anxiety, will help you in various aspects of your life. These benefits can range from now being able to speak to a group of youngsters about fire safety to helping adults engage in investing and wealth building.

 

Public Speaking Focuses

 

It’s important to learn the ways that public speaking is important. One is that it’s a valuable way that you can inform others. Note that convincing people of something is not important if your focus is simply on informing. You just want to get the information out there and allow them to come to their own conclusions. The more demanding forms of public speaking involve you convincing them of something or motivating them. It’s at that point that preparing for the emotional aspect of your speech becomes important as well.

 

Perhaps you want to describe the local real estate market to a group of students at a community college. In that case, your focus would just be on informing them. Conversely, if you’re looking to convince someone to engage in a specific type of passive investing, that’s when you’d want to motivate or convince them to do what you’d like them to do. Informing will, of course, be part of that, but there’s going to be a lot more to the process than if you were just informing them.

 

Preparing

 

The best thing that you can do prior to engaging in any form of public speaking is preparing for the experience. A nice side benefit that will directly impact the level of confidence that you have when you’re in the act of speaking is that being well prepared tends to decrease anxiety levels. Preparing should be done in a general sense, which is what you’re doing by reading this, and it should also be done specifically related to a particular speech.

 

In regards of the latter point, make sure to thoroughly research what you’ll be talking about. Do this even if you know the topic well. If you’ll be speaking about something that you feel that you have expert knowledge of, you don’t need to do as much research, but you should still touch up on the information. In many instances, you’d be surprised at how much of what you had assumed to be true actually isn’t. You also want to see if there’s any new information that you had missed.

 

Memorable Introduction

 

Journalists quickly learn how important the first few sentences of an article are. The initial moments of a speech are just as important. You want to grab the audience’s attention. This can be done with a related story, a statistic that would surprise most in the audience or a question that you want them to think about over the next few minutes. You want to establish your credibility and state your purpose in the early moments as well, but getting their attention is of utmost importance.

 

Note that most recommend that you write your introduction after you’ve finished the bulk of the speech. This is not as necessary when you’re already knowledgeable about the topic or you’ve started to be able to initially formulate much of your speeches in your head beforehand, but in those cases, you’re going to still want to carefully review your introduction later and be ready to make changes to it.

 

Establish and Satisfy the Need

 

Unless you’re solely focused on informing your audience, you should establish a problem that must be solved. The status quo is not working. We’re destroying our rainforests. This needs to change. This is why this needs to change and why you should care. That naturally translates into satisfying that need. Here’s what we can do to solve it. Make sure that you provide facts whenever possible throughout these parts of your speech.

 

Next is providing imagery for what the future will look like is nothing is done versus its appearance if that need is satisfied. It helps to be as vivid as possible when telling these stories. This is partially where being emotional comes into play. Be passionate and determined when you’re discussing this need and about what these differing types of futures will look like.

 

Even if your focus is on informing those you’re speaking to, emotionality can come into play as well. For example, if you’re telling your audience about what happened to the dinosaurs, you could incorporate stories about dinosaurs that lived then or otherwise tug on their heartstrings.

 

Your Conclusion

 

The conclusion of your speech is important as that is what will generally linger in the minds of those there. You want to briefly summarize the main points of your speech at this time, but you want to do so in a manner that involves you paraphrasing your points, not simply repeating them. You may also want to include a short story or a memorable quote to help you end on a solid note.

 

Know Your Audience

 

Part of the preparation process includes being prepared for your audience and tailoring your speech to that audience. In most cases, you should have a general idea of what to expect audience-wise, from the size of it to, more importantly, who they are. For example, speaking to those who are recipients of generational wealth is going to necessitate a different focus than an audience filled with people who are looking to engage in investing in order to build wealth. Also, educating kindergarteners about dinosaurs will require a different focus than doing the same with adult students.

 

Be Prepared to Ad-Lib and Go With the Flow

 

It’s best in most cases to not expect to deliver your speech word for word. You want to have general ideas in mind and then expand on those. Thoroughly research for your speech, but you don’t need to write a word-for-word speech and stick to that exact script. You also want to respond to the audience, read the audience, as you go along. That may be a skill that you should focus on later if you’re new to public speaking, but it is something that you should focus on sooner rather than later.

 

As you gain public-speaking experience, you’ll improve your ability to respond to both positive and negative body language and audible responses. This can even mean going completely off-script at times. Also take into account that doing thorough research in preparation for your speech allows you to more easily ad-lib.

 

Visualize and Practice

 

Practice your speech multiple times. You’ll be working towards a powerful presentation and will increasingly get a better idea of how to word certain parts of it. As you practice, visualize the setting as best as possible. If you can actually rehearse in the same facility that you’ll be delivering the speech, that’s even better. If not, visualize the experience as best as you can, including what the audience will likely look like and how its members will likely respond.

 

As far as your overall speech-giving skills go, continue giving speeches. Toastmasters is an organization that is one of the best at presenting speech-giving opportunities to people who want to improve. You could also ask to speak more often at work and in other types of situations in your life. Volunteering your time often presents numerous public-speaking opportunities as well.

 

Why Is Public Speaking Important?

 

Public speaking provides numerous life benefits. Those who become more experienced at it tend to experience a greater level of self-confidence and more comfortableness when interacting with others in all types of settings. Being more versed in public speaking will also allow you to make a greater difference in life. Anything that you can do to influence others’ thoughts is powerful, and public speaking has been shown to be amongst the most powerful things that any of us engage in.

 

Public speaking also provides you with tremendous learning opportunities. If you’re researching the local real estate market for a speech to give those engaged in passive investing, you’re also going to be teaching yourself a lot about wealth building in the process. And when you’re looking through information about generational wealth and how to keep that wealth transitioning through the generations for some time to come, you’ll learn a lot about that topic that you can also bring to discussions and interactions with people.

 

As with anything in life, taking the time to prepare for what you’re about to do will exponentially increase your ability to succeed at that task and decrease how much related stress you may experience from it. Public speaking is no different. Get out there. Give speeches. Be thoroughly prepared for them. Get comfortable going with the flow while giving them. Help people. Grow.

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The 5 Types of Millionaires

I took a day off to ponder on the topic of millionaires. I’ve had an increased curiosity lately in studying millionaires in order to understand the different ways people achieve this financial milestone. I came to an interesting realization that most people never talk about. There are several categories of “millionaire” and they are not created equal. Today, I would like to share with you these five types and examine their differences…

 

#1 Make 1 Million Dollars a Year

Some people define being a millionaire as making a million dollars (or more) per year. While this may not be the net-worth definition, it certainly meets the criteria. But here is something interesting to think about. What if you actively earn $1,000,000 a year from a salary or in W2 income and you spend $600,000 per year on your lifestyle expenses? It seems you would be living below your means – right? Not so much. You would essentially be left with $0 at the end of the year due to taxes (federal, state, and payroll) and in some high tax states, you might even be underwater and owe more if you spent $600,000 after-tax dollars. We are all too familiar with the many professional athletes, celebrities, and lottery winners who went broke after making their millions. It’s not what you make, it’s what you keep. 

 

#2 Save 1 Million Dollars

Some attribute saving a million dollars as the path to achieving millionaire status. Consider someone living frugally throughout their working career while earning an annual salary of $100,000. They might pay somewhere in the ballpark of $30,000 in taxes each year and perhaps they live on a modest $40,000. This means they could potentially save $30,000 a year – right? Possibly; however, this process would take over 30 years to accumulate 1 million dollars “in the bank” ($1,000,000 / $30,000 = 33.33 years). This strategy can be a very long pursuit without investing the money or benefiting from the power of compounding. Additionally, inflation works against you by often outpacing what interest you may receive from the bank. This begs the question…how much will $1,000,000 buy 33 years from now?

 

#3 Owning a 1 Million Dollar House 

Many of us chase the good old American Dream of owning a nice, big, paid-off house. While a big home may be nice, Robert Kiyosaki, the author of Rich Dad Poor Dad said it best: “your house is not an asset, it is a liability.” Why? Even after paying off a house, there are still property taxes, insurance, maintenance, and expenses that go along with it. Therefore, it takes money out of your pocket every month. Without having a job or investment income to pay for these expenses, you may risk losing your home. This begs the question…do you ever REALLY own your house?  

 

#4 Invest 1 Million in Equity Investments 

There are two primary ways you can invest. You can focus on equity or income. An example of equity investing could include buying a stock at $10 a share and hoping it goes up to $15; then selling the stock if it does. Or buying a rental home for $100,000 and flipping it for $150,000. The profits are your “equity”. While there is nothing wrong with either of these strategies, the fact is that you must keep working and stay active to produce these equity gains. If you choose to walk away from this business or side hobby, the profits are likely going to stop or reduce significantly. Time is money. 

 

#5 Invest 1 Million in Income Investments 

Finally, we arrive at the income investing approach. Income investing is not based on “buy low and sell high” although that very well could be the icing on the cake in some investment types. This strategy is primarily focused on income-producing assets that produce cash flow, interest or dividends. The real benefit of this strategy is having the option to live on the income. These passive income streams could potentially replace your day job, or at least provide additional sources of income in the event that you lose your job, choose to take some time off, switch to part-time work, or retire altogether. Examples of this type of investing might include, owning real estate where tenants pay rent to you every month, buying REITs (Real Estate Investment Trusts) which are commonly traded on the stock market and usually distribute a large portion of their profits in the form of a monthly or quarterly dividend. Additionally, bonds, CDs, annuities, tax-liens, notes, ATM machines, producing oil wells, and dividend-paying stocks are a few other examples of income-producing investments. 

 

No matter which type of millionaire you currently are or wish to become, it is important to know the differences between the types. This was an eye-opening discovery for me and I hope it helps you clarify your approach to wealth building. Which type of millionaire strategy suits you best?  

 

You can be rich by having more than you need, or by needing less than you have – Tony Robbins 

 

To Your Success

Travis Watts 

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Rich Fettke on Supercharging Remote Teams

Real estate is a high-touch business that must now adapt to working remotely. If you want a more effective team or professional network, real estate investor Rich Fettke has actionable insight for you. Rich is co-CEO of Real Wealth Network and took his company completely virtual almost ten years ago. As a guest on the Joe Fairless Best Ever Show podcast, Rich offers tips on building a happy and motivated remote team.

About Rich Fettke and Real Wealth Network

Rich Fettke is co-CEO of Real Wealth Network, an educational and referral service for the passive investor in single and multifamily properties and other opportunities. He brings a strong track record in business and personal coaching helping entrepreneurs grow their businesses.

A turning point came when Rich was diagnosed with terminal cancer. He and his wife, Kathy, scrambled to plan their children’s futures should the worst happen. After much research, Kathy determined that real estate investing was the path to financial security.

The diagnosis was overly dire, and Rich survived cancer. Inspired by Kathy’s research on income generation, the couple founded Real Wealth Network to help friends learn to invest in multifamily and other real estate. The company has grown to include brokerage and syndications operations that offer opportunities for passive investing.

Rich develops teams and systems for his 25 employees, all currently working remotely. Here are his must-haves for a dynamic remote team.

Define Your Culture

Some business areas need pruning during tough times, but your company culture is not one of them. If Rich Fettke has one key takeaway for you, it’s this: “Be sure to determine your core values and use them as hiring criteria.”

Know Your Core Values

Almost every company lists impressive-sounding values and claims to honor them. But when pandemic constraints or other hardships test a business, the truth reveals itself. You must commit to executing on your values every day and holding yourself and the rest of your team accountable.

Here are some of Real Wealth Network’s values that translate directly into actionable tips for remote work.

  • Integrity
  • Transparency
  • Connection
  • Accountability

Get your team’s input and buy-in on the company core values. Employees are more dedicated and self-directed when they feel some cultural ownership.

Hire to Your Core Values

An employee or partner is either adding or subtracting value. No matter how alluring a candidate’s profile, he or she will compromise your team if core principles are misaligned. Even a passive investor can impact your network’s wellbeing.

Rich suggests including core values in your interview questions. Tell candidates one of your values and ask them to walk you through a scenario when they had to act upon that value under pressure. What was at stake, and how did they handle it?

To help vet leaders, Rich also asks prospective employees how they would manage others in light of those values. If your team member fails to deliver, how do you address that? If your ordinarily effective peer is dropping the ball, how do you intervene? These spontaneous answers can reveal a lot about a candidate’s values, strengths, and fit for your unique team.

Lead with Values

After you document your core values and refine your hiring process, the hard work begins. Each day, your remote team has to show up and live those values virtually. Unlike when working onsite, the in-person feedback and social cues that help keep us on our toes are lacking. Subtle employee behaviors or oversights are also easier to miss. Your remote team must understand behavioral expectations and the exact consequences of falling short.

Expect Integrity

You’ve probably known quality employees who were let go with seemingly no warning, or perhaps experienced this yourself. Rich explains how Real Wealth implements the three-strikes rule transparently so that everyone is clear on accountability. This approach avoids the murkiness that often surrounds many companies’ evaluation process, especially in remote environments.

As a manager, you hold a one-on-one with the employee having the issue, advise this is strike one, and explain why. You make sure the employee understands and can repeat it back. You reiterate the three-strikes rule and that a third strike means termination. If employees gain a third strike and are terminated, they almost always admit responsibility and a lack of enthusiasm for the job.

In contrast to giving three chances, don’t be afraid to jettison employees who consistently violate integrity standards. Everyone has an occasional off day, but people who don’t meet your company’s ethical standards need to move on.

Show Transparency

You want to set up transparent systems and processes and encourage open, honest communication. It’s essential to let your team know the metrics evaluating their behavior. Rich shares that at Real Wealth, flagrant integrity violations merit instant dismissal. Breaking the core value of connection by being rude, on the other hand, might call for three strikes.

Gossip and complaining might be a little tougher on a remote team but still occur. Rich and Kathy decided that transparency meant no behind-the-back talk, however seemingly innocent. When you don’t interact in person, it’s easy to blindside employees with poor feedback after it’s too late for them to correct deficits.

In a rush to execute under pressure, businesses sometimes skip transparency basics such as creating an organization chart and job roles. Even a real estate investor with a small team will benefit from organizational clarity. It’s especially important to document in a remote environment, as the days of yelling a question over the cube wall are over.

The documentation should be concise, visual, and stored in an accessible central location. Your team members need to know:

  • What’s expected of them
  • The performance metrics
  • How to get help
  • How much problem-solving ownership they have
  • Who the managers and experts are

In a unique spin on visioning, Rich suggests creating an org chart for your business as it will be in five years. As your company grows and you fill positions, you’ll be encouraged to replace your photo with those of hires who can do their roles better than you can.

Build Connection

Effective systems encourage people to connect in productive and enjoyable ways. You want to avoid typical group time wasters, such as unnecessary meetings.

Rich and Kathy hold quarterly all-hands meetings to communicate important news. This “state of the company” address covers accomplishments, financial performance, profit sharing, and upcoming changes.

When conditions permit, Rich believes in the old-fashioned company retreat for much-needed team bonding. At the yearly three-day event, team members focus on what went well and not so well, what they learned, and the roadmap ahead. They also celebrate each other’s accomplishments. This in-person time builds relationships that help power the group through the rest of the remote year.

Accountability: Rock Your Team Mindset

If you work remotely, it’s easy to fall prey to distractions or a sense of disconnection from the company mission. Real Wealth met this head-on by implementing the Entrepreneurial Operating System®, or EOS, a holistic operations toolkit for smaller businesses. This method sets specific expectations for employees, helps them focus on the bottom line, and gives them ownership of results.

If you’re wondering which system Rich uses to track employee progress, his answer is rocks. Each team member has three to five “rocks” that represent quarterly targets. Rather than micromanaging employees, managers tell them, “Here’s your rock.” The employees own delivering results.

To make quarterly targets more tangible, people can place actual rocks in jars on their desks. That visual reminder of what’s essential helps them prioritize work and minimize distractions.

Another strategy is to partition teams under leads who can work closely with the smaller group. This model promotes individual accountability and open communication.

Run Lean on Tech

The right platforms for your business enable remote collaboration without intruding. How do you balance tech need and overhead?

For starters, Real Wealth doesn’t always meet over video. Skipping the virtual face time cuts down on complexity and that angst of having to look good on camera. The company holds a monthly all-hands meeting, and teams hold weekly meetings. Most video calls involve screen sharing but no distracting faces, allowing attendees to focus on the well-structured agenda. The monthly meeting is an opportunity for people to see each other and connect visually.

After grappling early on with tech overkill, Real Wealth now leverages a few platforms with high returns. For project and portfolio management, Rich and his team use the tried-and-true Basecamp. To help manage meetings and follow-up items, they use Ninety, which implements EOS principles. GoToMeeting and Zoom are favorites for video calls.

Your Turn

Remote teams are the new social business climate. Even if passive investing, you want to mind your business relationships actively. Use Rich Fettke’s experience to help you hone your professional core values and processes. You will enrich your team or network on all levels.

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Accepting the Risks of Reaching Success

If you truly develop your mind as an investor, you’ll eventually see risk as an inevitable part of a successful portfolio. Avoiding loss is certainly our goal, but in achieving success as a passive investor, accepting risk enables us to act with surety. Millions of people who search for passive income tend to overthink it. Some are “paralyzed” by the prospect of loss instead of using it to their advantage.

In every deal we enter, there’s a way to turn uncertainty into a benefit. Interestingly, a portfolio that consistently profits is also consistently exposed to risk. The balance we achieve as lifestyle investors comes from first analyzing our costs. As you profit, I encourage you to be bold but to know the cost of doing so.

Being Risky Without Accepting Loss

We have to accept risk for what it is because we can’t eliminate it. Profits must outweigh deficits if a portfolio is to succeed. Notice, however, that risk remains even within a winning record. No one generates profits without first paying a principal sum. This means that even if you did find a risk-free investment, the money you put into it is your first loss. My message to passive investors is to balance their risk by knowing the part it plays.

Risk doesn’t tell us not to enter a position. It tells us how to, when and where.

Risk—Accepting It vs. Taking It

You might have heard it before: “Take risks.” My expectations for your financial future is much more secure than that. Don’t take risks that you can’t handle. Never go into an investment without knowing the dangers involved with it. The difference between taking risks and accepting them are the pursuits behind each. If you “take” risks, you might also find yourself habitually searching to do so.

When you “accept” risk, however, you decide on the lowest denominator in order to keep losses at bay. Here are some examples that explain my point:

*Taking It
The loss, duration or long-term repercussions won’t matter. Being motivated to “take risks” means that as such arise, you take it. You won’t worry about doing analysis or asking yourself if you can handle it. Any method that takes on risk in its full capacity will lose money over time. Some investors find the opposing stance, as their response, to be that of eliminating risk. Notwithstanding, your balance is struck by accepting the reality that your risk doesn’t go away.

*Accepting It
The first step in solving any problem is to know that it exists. Accepting the truth that risk is always there helps you to strategize from a point of logic. You have to clearly know “what you’re getting into.” Only then can you devise a plan that outperforms the damages of loss. Accepting risk allows us to think intuitively.

We each need to create strategies that allow risk to exist but at a lesser degree than our profits. Your investment with me, for example, covers maintenance, advertising and repairs. The rewards we later receive outweigh but won’t negate the initial risks we had. Eliminating risk is not the objective; outperforming it is.

How Much Risk can You Tolerate?

Before taking your first step into an investment, you must decide on how much loss you can handle. We know risk will be there. How much of it will you be exposed to? Wealth building in real estate is ideal because of the passive way it generates money. Passive investments enable you to decide on the risk you’re comfortable with. Risk tolerance is the level of loss that you can handle in any situation. Now for ideal success, tolerance must be a number.

How much can you lose before the loss makes you think twice? Will you have to remortgage the house just to stay in an investment? Will your employer condemn you; will your spouse consider separation? The extremes that come from financial loss are the risks you’re faced with. Deciding on how much loss you can handle requires you to analyze your emotional stability also. You can then enter an investment once the amount that you can lose is determined.

Know the Cost Up Front. That Cost Equals Your Wager.

When done right, evaluating the risks you have should result in an exact figure. I don’t recommend general figures because we need to cap your losses. Putting a cap on your deficits means that only a specific sum is at stake. I’m always positive about your investment potential, but your profits should never lead you to forget the costs involved. Accepting risk is how we humble ourselves and prepare to succeed. You can also scale your rate of success by determining:

How Fast to Enter—Costs that are clear prior to investing can become an indicator regarding how you should invest. Investments that, after basic analysis, show a low cost of entry but a high-profit potential require fast action. The mistake of not knowing your risk leads you into toxic deficits. Acting with haste is only profitable when you’ve confirmed your likely margins of profit. I then suggest that you double check to confirm that the cost is low during any ideal moment for investing.

How Quick to Let Go—Cost, which can be measured as risk, also tells us how or when to exit an investment. The closer we are to hitting our profit targets, the longer we want to hold such underlying assets. Moving closer to our initial levels of risk is what signals a need for exiting an investment. It’s even possible to profit from an asset and then see it revert toward a measure of loss. As long as you’re aware of the risks, you can exit a bad deal before it gets out of hand.

Reward and Risk Analysis—Why?

Being that risk is “acceptable,” we need to ask ourselves if our investments are worth it. In doing so, we’re not only asking if the potential profits are alluring enough. Successful investors need to ask if the potential loss is worth the trouble. The way that smart investors enter a position starts with cost/reward analysis. In such study, the first ratio we need to confirm is a 1-1 outcome.

This means that for whatever you spend, you get the same amount back. This is how we insure our principal. Ratios that then hit 1-3 are those that triple our initial investments. An investment that fails to produce a 1-1 outcome isn’t worth it. The first rule to any successful investment is to return your principal in all cases.

Automation—How a Good Track Record Solves Your Worries

Building your confidence in accepting risk helps me to ensure your success. This is why I want you to know that the best deals are those that have first proven themselves. No one can guarantee what the financial markets will do. What we can do together is decide on the worthiness of an asset by looking at its history. Past performance is the closest thing we have to a “best bet” when investing.

Profit automation occurs when an investment asset consistently shows profits as outperforming the deficits. A proven history of success ensures that we don’t blindly take risk into our lives.

*Freedom and the Dangers Involved—Financially, it’s easy to get carried away when you forget about your potential risks. A lifestyle built on wealth gives us a certain freedom that we might take for granted. The danger of living on passive income is the delusion that that money is generated without cost. This is what the sensation of winning can lead us into. By looking for investments that are backed by historic performances, we won’t negate risk, but we’ll manage it logically.

Letting Passive Income Reduce the Uncertainty

An ideal way of creating generational wealth is to reduce risk via passive investments. The less work you have to do, the more analysis your mind is free to initiate. It’s easier to make decisions that are good for your portfolio when you’re not overwhelmed by huge losses. Reducing risk can be successfully done by reducing how much work you need to put forth. My work, as a result, can substantially reduce your uncertainty.

Take a Larger Step Into Passive Investing

Wealth building is complicated if risk overburdens your thoughts. Real estate is being bought every day however. Reducing risk calls for investments that perform even when world economies don’t. Passive investing is an approach that has mastered the art of boosting profits while confidently accepting the risks involved. I need you to be bold in this manner. Follow your passion but with a realistic perspective of the cost.

Generational wealth is easier to create than you might think. You need a logical approach to managing risk while being prompt to take profits as they come. We can make your passive lifestyle better than you had imagined. All of us will inherit potential lost but not being deterred is what guides us into our greatest potentials in wealth.

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Philanthropy – The Most Common Organizations to Help

A majority of the world’s wealthiest people have a story of “rags to riches” to tell. Many of these leaders dropped out of school and came from the direst conditions that mankind can be found living in. When we look at the fact that people like Thomas Jefferson singlehandedly ensured the existence of public libraries across the USA, it’s clear; the opportunities we have don’t stem from our own brilliance.

 

Wealth is built on the contributions that others have made. Even the real estate we profit from wasn’t built by our own hands. I want you to define charity in your own words and to see giving as part of generational wealth and wealth building.

 

Wait. Can Philanthropy Make Your Rich?

 

What if I told you that your wealth can only be measured by your ability to give? You might have heard it before, “Give to the poor.” No one can give to nor help another person if they have nothing themselves. Power and philanthropy go hand in hand. At times, it’s not so much a display of humanity as it is a display of capability. Many people desire to make a world impact but lack the resources to even start.

 

Giving is so pivotal to society that we get tax benefits the more we do it.

 

The Benefits and Freedom of the Untaxed

 

As an itemized contribution, anything you give to legal nonprofits counts as a deductible from your taxable income. The amount you give is personal, but in doing so, you lower the rate at which your income is required by the IRS.

 

Seek Charity, but Fuel Yours With Passive Investing

 

What makes a charity ideal is the passive way that you can use them to change the world. Whether you leverage your earnings from passive investing in real estate or from personal income, you don’t need to lift a finger when investing into a regulated charity. Now if you hope to realize the wealth building potential of investing into the philanthropic way, consider the following charities to start with:

 

*1. Feeding America

What Gets Done—Answering every call of hunger in the world is the objective of Feeding America. The United States is the organization’s primary focus, but the aid it musters finds its way into many global crises. “Working together to end hunger,” is the agency’s motto.

 

Who Benefits—Over 18-million children are expected to deal with caustic levels of hunger during the pandemic of 2020. Both adults and youths receive aid from this agency however. The focus of Feeding America isn’t just for those without the means but also for those who’re struck by natural disasters. Expect this nonprofit to rally resources together, primarily focusing on food shortages during hurricanes, earthquakes, tsunamis and even economic downturns.

 

How—Being the United States’ largest advocate for food, Feeding America uses its wide reach of influence to achieve its mission. Donors play a role in keeping Feeding America functional. This includes volunteers who help to deliver meals, package and preserve food products as duty calls.

 

*2. Direct Relief

What Gets Done—Disaster relief, as it pertains to war and “acts of God,” is the core focus of Direct Relief. This nonprofit measures its own work based on its vision of “global health.” What this interprets into is humanitarian aid. The specific issues, be they social, economic or political, dictate the aid Direct Relief delivers.

 

Who Benefits—The United States is the first in line for “direct relief” when resources and labor are dispatched to emerging needs. Over 80 countries now qualify for aid, being stated by the nonprofit as, “ … anyone in need.” Wildlife, as it pertains to fires, floods and endangered species, benefits from the agency’s work.

 

How—With nearly a billion in accounts payable, Direct Relief has a substantial fund to lead its humanitarian projects through. Roughly seven-million pounds of medical supplies have been delivered by the group since 1948. The transportation of resources makes up a big part of the agency’s competencies. Simply getting things to where they need to be is proven to be a big challenge. Direct Relief offers training and humanitarian work to over 2,500 volunteers.

 

*3. Open Society Foundations

What Gets Done—“Freedom, democracy and human rights” are the core focuses of George Soros’ Open Society Foundations. In the developing world, the principles of democracy are considered new. The work calls for an agency that realizes the challenges that still exist in removing authoritarian power. Over 50,000 grants have been awarded by the fund so far. These are used to raise the voices of anyone living in conditions of oppression.

 

Who Benefits—Children who lack formal education are a key focus. Adults living with income inequalities benefit also. Developing democracies are key beneficiaries along with journalists and discriminated groups in the working class.

 

How—The foundation issues grants to innovators who’re determined to promote the agency’s mission. As long as these promoters develop functional ideas for democratic change, they stand a chance at changing the world forever.

 

*4. Wounded Warrior Project

What Gets Done—The study, treatment and education of post traumatic stress disorder (PTSD) is the work of the Wounded Warrior Project. This U.S. military nonprofit focuses on rehabilitating veterans. The organization targets substance abuse and provides counseling to give vulnerable veterans a sense of meaning in human relationships.

 

Who Benefits—Veterans who need to return back to their civilian lives are the leading beneficiaries. Statistics show that roughly 24% of all vets are substance abusers while an additional 20% are living with PTSD. Those with mental and physical injuries are also challenged in ways that require therapy in group sessions.

 

How—A board of directors is responsible for guiding the direction of this nonprofit. Therapy and rehabilitation are its core competencies. “Alumnus,” who are donors like you, make the work of Wounded Warriors possible. Free programs with a proven methodology are available to anyone who needs them.

 

*5. Ford Foundation

What Gets Done—Leading a global fight against inequality and social injustice is what the Ford Foundation does. In its own words, the foundation is responsible for, “ … disrupting systems to advance social justice. …” The circumstances, people and goals dictate how the money raised by this nonprofit is used.

 

Who Benefits—People living with gender inequality find aid from this organization. Racial and ethnic injustices are targeted by the Ford Foundation and deemed unacceptable in a modern world. Low-income workers also find refuge through the lobbying efforts of this agency. The work of modern artists and other creatives is important to the Ford Foundation. Technological and environmental impacts are also, and those with disabilities are likewise given aid.

 

How—Through a $1 billion fund, the Ford Foundation strategizes and allocates resources for its projects. It recently raised $75 million for COVID-19 and even provided $20 million for the rights of low-wage earners.

 

*6. American Heart Association

What Gets Done—Having nearly $5 billion spent on research and development, the American Heart Association leads the nation in seeking a solution for heart disease. By targeting what is now the leading killer of American adults, the AHA promotes general health by making people aware of the risks they face. Directly fighting against the development, onset and mortality of stroke or heart disease puts the sole goal of “an eventual cure” within the scope of this nonprofit.

 

The agency, on a national level, also leads the charge in monitoring how medical professionals treat heart disease. Malpractice is its concern as well as any medical agency that lacks the needed resources to combat stroke and heart disorders.

 

Who Benefits—Women and men equally benefit from the work of AHA. People who have underlining medical issues are a key-study group for this agency. Those who’ve already experienced a heart issue or stroke receive financial aid at times. As far as smokers and drinkers go, the American Heart Association is determined to minimize the probability of heart disease in aging patients.

 

How—Through voluntary aides, the American Heart Association ensures that it’s equipped with medical professionals from all walks of life. Roughly 33-million volunteers are ready to progress the agency’s mission right now. Public education and awareness play a large role in convicting every American regarding the risks they have and why donating or getting a checkup is important.

 

You might feel a need for substantial generational wealth before you can partake in charity. Helping someone you encounter in public, however, is also a form of giving. Making life as a passive investor truly profitable starts with realizing the charity you once needed to get to where you are now. No one becomes wealthy alone.

 

In the same way that I strive to make your investments profitable, put the money you generate back to work for yourself also. Develop your community, teach the youth and give people the opportunity to make your enterprise more successful. Such steps are how you make charity as financially rewarding as it is morally.

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What Type of Investor Are You? – A Quick Self-Awareness Guide

Even though no two investors are exactly alike, there are patterns to investors, and generally speaking, they fall into two types:

  • The Passive investor
  • The Active investor 

Knowing which type resonates best with you can help align your investing to your personality and lifestyle preferences. Having this self-awareness is key when it comes to achieving your desired outcome. To help you figure out the best path and to understand the differences, let’s dive into these two investor profiles.

 

The Passive Investor

This is the most common type of investor, although, I’ve noticed over the past few years, there are not a lot of educational resources to help clarify the passive side of real estate investing. That is why the Best Ever Team and I have recently doubled down on creating free resources for passive investors. Learn more here

 

Common Traits of a Passive Investor Often Include:

 

  • Lacks the time to frequently monitor investments
  • Enjoys reading financial news
  • Likes to own a little bit of a lot (values diversification)
  • Seeks to match, not beat, the market

 

This type of investor is often unemotional about the investing process while being more “active” on the portfolio management side rather than on the investment itself. Passive investors have an understanding of multiple types of investments, as well as the overall associated risks. 

 

Portfolio Investments May Include:

 

  • Real estate syndications
  • Private placement offerings
  • Notes or hard-money loans
  • Tax liens 
  • REITs (Real Estate Investment Trusts) 
  • Stocks, ETFs and other publicly traded assets 

 

Generally speaking, this type of investor is proactive when selecting investments, and then tends to sit back and enjoy the ride. The philosophy? Primarily long-term buy and hold, hands-off investments. 

 

The Active Investor

In contrast to the passive investor, an active investor may also enjoy reading financial news; however, they often spend several hours each week or month actively monitoring and managing their investments.

 

This person may seek to have involvement in a number of areas in the investing process. An active real estate investor could be similarly compared to an active day trader who follows the stock market, even if they don’t execute dozens of trades each month.

 

This kind of investor usually prefers a more hands-on approach to their investing. An active investor is often more interested in the “business” of a particular investment or industry. 

Common Traits of an Active Investor Often Include:

 

  • Likes to create their own unique strategy or business plan
  • Doesn’t necessarily value diversification as a top priority
  • Seeks control over his or her investments
  • May have a unique skill or upper hand compared to competitors
  • Seeks to beat the market

 

Generally speaking, this type of investor is actively involved when selecting and underwriting investments. The philosophy? Short-term and long-term, “do-it-yourself” approach.  

 

More About Your Personality

Consider how you respond to financial transactions, emotionally. This can help you invest in a way that’s aligned with your comfort zone. For example, if you’re investing and you sometimes feel nervous about making a mistake, this is a sign to be aware of, especially if it causes you to buy or sell on a knee-jerk reaction. As another example, if you tend to develop an emotional attachment to a certain stock or piece of real estate, this may cause you to hold onto the investment longer than you should, in hopes that it will rebound; this can hurt your investment portfolio returns. 

 

If these two examples describe your personality type, you may decide that a passive investing approach is more suitable. No matter what investing decisions you make, there can be real value in having insight into your investing personality, which ultimately allows you to feel more comfortable with the investing process. The sooner you identify what suits you best, the better off you will be in the long-term. 

 

Emotions connected to money and finance can be traced back as far back as your childhood. For example, if your parents were anxious about how to invest; you may have picked up that habit yourself. It is helpful to be aware of these emotion-based patterns and break them as soon as possible, so they do not hinder your financial future. 

 

Understanding Your Risk Tolerance

 

How Do You Handle Risk? There Are Four Common Personalities When it Comes to Risk:

 

  • Cautious
  • Systematic
  • Spontaneous
  • Individualist

 

If you are cautious, you may be extra sensitive to losses in your portfolio, and you may feel more comfortable with safer or more conservative types of investments. Fear is usually playing the primary role with this personality type.

 

If you are systematic, you likely make investment decisions based on hard facts and data. Details and analysis matter and this personality type will often refer to research to make a decision. This personality type can also have a lower risk tolerance, but will rely on “the facts” to make a decision. 

 

A spontaneous investor often has a higher risk tolerance as does the individualist. If you’re spontaneous, you may quickly switch from one investment or strategy to another. Perhaps on advice or knowledge you’ve recently received, or because of a new developing trend. This personality type finds satisfaction from frequent change and new investing ideas. 

 

Individualists, typically seek unbiased research and due diligence to make decisions independently. They are often willing to take calculated risks because they are confident in their research. New trends and media hype often do not persuade an individualist.

 

Getting Started

No matter what personality type you have or what your risk tolerance is, self-awareness is a key ingredient to a successful investment strategy. Whether active or passive, investing is not a short-term endeavor, so it is beneficial to take a little time to reflect on your goals, your strengths, and the lifestyle you desire. 

 

Step one is to simply get started on your own self-awareness 

 

To Your Success

Travis Watts 

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Clever ways to deal with requests for money

Through years of hard work and a smart wealth-building strategy, you can amass a small fortune. Passive investing enables you to ultimately enjoy a comfortable lifestyle. Income may be coming in regularly from real estate investing activities and other types of passive investments. Once your passive income streams are established, you will not have to spend so much of your free time working.

Friends and family members will undoubtedly admire your lifestyle. At the same time, when they need extra cash, they may immediately think about asking you. An important aspect of building wealth involves making savvy financial decisions. Regardless of how wealthy you are, you understandably cannot lend money to everyone who asks for a helping hand. How can you handle these requests without burning bridges with those who are close to you?

Establish a Personal Policy

 

It is easier for some people to lay down firm personal rules about lending money. After all, the alternative is to potentially look like the bad guy because you do not lend money to everyone who asks for it. When your friends and family members know that you hold a hard line about not making personal loans or simply handing out cash, the requests for handouts and loans will dry up.

 

Avoid Giving an Explanation

 

Whether you establish a strict personal policy or you analyze each request on a case-by-case basis, you will need to turn down at least a few people over the years. Some people give a long, drawn-out explanation about why they cannot give out their money. They want the other party to know that all of their money is tied up in other ventures or that other factors are pending so that they do not look like a bad guy.

 

In reality, you do not owe anyone an explanation regardless of how close they are to you. Your finances are your business, and what you do with your money is not their concern. In some cases, providing an explanation can actually result in ill will. For example, if you are honest that you do not believe the person can pay you back, you may step on toes. In many cases, a better approach is to simply state that you are not interested in considering or available to satisfy their request.

 

Be Blunt and Swift

 

As soon as somebody asks you for a handout or a loan, you need to know how to respond. Answering bluntly and swiftly may work best for some people. After all, you do not want to create false hope by giving the illusion that you are seriously considering the request. However, this approach may not work well in all situations. If you always maintain a policy of not lending or giving money to friends and family members, this is a great approach. On the other hand, if you have a solid desire to help the person, you need to try a different approach.

 

Pause Before Responding

 

An alternative to the blunt approach to turning down requests is to take a day or two to actually consider the option. Only use this approach if you have the means to follow through and if you are giving it serious thought. When you tell the person that you will respond in a day or two, you are no longer placed on the spot. Nobody should make hasty financial decisions, and this extends to making personal loans or offering large financial gifts to friends and family members.

 

When you give yourself this extra time, you can review your finances to ensure that the loan or gift will not impact your wealth building goals. At the same time, you can determine if it is a worthy request or if the funds will likely be squandered. Because you have worked so hard amassing wealth and passive income, you do not want to essentially throw it away.

 

Schedule a time to circle back around to the individual in the next day or two. Generally, this type of conversation should be completed in person when possible. If you intend to agree to the request, you must have firm terms in mind. The person must agree to those terms, and you may want to put the agreement in writing. On the other hand, if you decline the request, you should develop the right strategy before the meeting. Will you deliver the news in a blunt manner without an explanation? Otherwise, how much of an explanation are you willing to provide?

 

Suggest Alternatives

 

Regardless of how frivolous or serious the financial request is, you are not the only solution available to your friend or family member in need. The reality is that there are several alternatives that may work well in different situations. When you present these options to your friend or family member, you can offer to assist with their efforts in these ways. For example, you can offer to contribute a limited amount of money and to spread the word through your network to raise awareness.

 

Crowdfunding

 

Does the individual need money to start a new venture? Crowdfunding is a way of obtaining funds from both individuals and organizations. In some cases, the money is given as a gift. It may also be invested. For example, if the person is starting a business, they may use crowdfunding to offer a small share of ownership in the business.

 

Peer-to-Peer Loans

 

Whether the person is trying to start a business or needs funds for personal reasons, applying for a bank loan could be a feasible option. When bank funds are not available, peer-to-peer loans are a smart alternative. Through a peer-to-peer lending platform, the full amount of funds needed may be raised by small loans from many people.

 

Private Donations

 

Has the individual experienced significant hardship recently? These events can pull at your heartstrings, but you do not need to be the only person who pulls the person up out of their situation. There are several reputable websites that facilitate private donations, such as GoFundMe.

 

Offer Other Types of Support

 

Giving money is not the only way that you can help out your friend or family member. Whether you extend a loan, offer an alternative or simply say no, you can offer various other types of support. By doing so, you can maintain great terms with the individual and may legitimately help him or her to achieve essential goals. How can you support your friend or family member without handing over cash?

 

Mentoring

 

Is the person trying to start a business or to pursue a project that you have some experience with? For example, is investing in real estate his or her goal? Rather than extending funds, offer to provide ongoing guidance and support. This may even extend to helping the individual make connections through your network.

 

Part-Time Employment

 

Does your friend or family member need extra cash to get by? A cash shortage may be tied to overspending, unexpected bills and many other things. Rather than give the person money, give him or her the opportunity to earn much-needed cash. For example, do you need a maintenance person at one of your investment properties? If you do not have a job opening in mind, put out some feelers to help your friend or family member find extra cash. Some people are able to work, but they are not willing to do the hard work and lift themselves up.

 

Know When and How to Give

 

There are several ways to give money if you decide to do so. For example, you can pass generational wealth down to an heir through a gift. Generational wealth can also be passed through several types of trusts. On the other hand, you could become a real estate investing partner with the individual. By doing so, you can contribute half of the down payment so that her or she can begin passive investing activities more easily.

 

If the individual has an urgent need for cash, you must decide if you are offering a gift or if you expect the money to be repaid. It may be advisable to have a formal loan agreement drafted and notarized. This way, you have some means to obtain the money through the court system if he or she does not honor the terms of the agreement.

 

Wealthy individuals who enjoy the benefits of passive income streams can feel proud of their accomplishments. After spending so much time and energy building income streams, you are in the driver’s seat regarding how you manage your funds. While a family member or friend may ask for a straight loan or a gift of funds, you can see that there are many alternatives available. Keep all of these options in mind the next time you are faced with this type of situation.

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The CashFlow Quadrant – How I Save Thousands on Taxes (Legally) 

One of the most life-changing discoveries came to me years ago when I realized I was earning income the wrong way. This was uncovered when I read the book, “Cashflow Quadrant” by Robert Kiyosaki. It’s a powerful book that helped guide me to become a full-time investor and to make financial freedom a top priority. Additionally, this book has single-handedly helped me save thousands in taxes over the years.  

Source: https://www.richdad.com/taxes-stealing-your-money

 

As you can see in the diagram above, each quadrant (E, S, B and I) represents a different way to generate income. Some people earn money in only one of the quadrants, while some earn money in multiple quadrants. There are advantages and disadvantages to each quadrant.

The two quadrants on the right side (B and I) are the primary paths to financial freedom. The majority of the Cashflow Quadrant book is about the unique skills and mindsets required to succeed on this path. If you haven’t checked out this book, it’s a worthwhile read. You can learn more here.  

Let’s Explore Each of The Four Quadrants:

E – Employee

An employee earns income via a job. This is the quadrant where most people earn their income. The job itself is owned by a business, which could be a single person or a large corporation. The employee exchanges his or her time, energy, and skills to an employer in exchange for a paycheck and often other benefits such as healthcare coverage and/or a retirement account match.

Employees can make a little or a lot of money, but when an employee stops working, or if the business goes under, the income stops.

The lack of control over income is a serious consideration of the E quadrant and something I became intimately aware of when I worked in the oil industry and layoffs began to occur around 2015. An employee’s financial freedom is dependent upon the success of the employer and the ability to show up to work and exchange time for money. 

Kiyosaki points out that the reason as to why most E quadrant workers pay around 40% of their income in taxes (as shown in the diagram above) is simply because most personal expenses aren’t deductible. You can’t, for example, deduct the expense of your personal car from your taxable income. Below is a simple illustration for educational purposes only. Please seek professional, licensed tax advice from a CPA for more information. 

 

Tax Example: 

Federal Tax: 27% 

State Income Tax: 5% 

Social Security Tax Rate: 6.2% (half paid by the employer) 

Medicare Tax Rate: 1.45% (half paid by the employer)

Total = 39.65% in Tax

 

S – Self-Employed

Many employees eventually get tired of the lack of control over their pay and schedule and choose to work for themselves instead. A self-employed individual still exchanges time for money, but they “own” their job. 

Common examples of the S quadrant workers include dentists, doctors, insurance agents, realtors, handymen, among many other skilled trades. It is possible as a self-employed individual to earn a large income, but like an employee in the E quadrant, when they stop working, so does their income.

Self-employed workers have more control compared to an employee, but more often than not, they also have more responsibility. As a result, success usually means working harder and working longer hours. Over time, this can lead to burn out and fatigue as I also experienced first-hand in 2015 when I was actively investing in real estate with fix and flips and vacation rentals. 

Kiyosaki points out that the reason why most S quadrant workers pay the highest taxes, around 60% of their income (as shown in the diagram above) is that Social Security and Medicare Taxes are paid 100% by the self-employed individual (they are not split by the employer as is the case with an employee). Additionally, an S quadrant individual often earns more income compared to an employee and therefore can be in a higher tax bracket. Below is a simple illustration for educational purposes only. Please seek professional, licensed tax advice from a CPA for more information.

 

Tax Example: 

Federal Tax: 37% 

State Income Tax: 5% 

Social Security Tax Rate: 12.4%

Medicare Tax Rate: 2.9% 

Total = 57.3% in Tax

 

B – Business Owner

Those in the B quadrant own a business system and they lead other people. In this quadrant, the business often has 500 or more employees. The systems and employees who work for the business can run successfully without the business owner’s daily involvement.

Unlike the S quadrant where a plumber, for example, might own and work in his own plumbing business, a B quadrant business owner might create a plumbing company and hire 500 or more plumbers, administrators, managers, and other staff to run the systems in the company.  

 

The wealthiest individuals in the world typically own B quadrant businesses. A few of these individuals include Bill Gates of Microsoft, Jeff Bezos of Amazon, and Mark Zuckerberg of Facebook.

Kiyosaki points out that the reason why most B quadrant business owners pay around 20% in taxes (as shown in the diagram above) is because businesses can deduct a wide variety of expenses from the income of the business, which can lower the businesses income taxes. Additionally, the recently passed Tax Cuts and Jobs Act in 2017 allows for a qualified business income tax deduction of an additional 20% for eligible businesses. You can learn more here. Below is a simple illustration for educational purposes only. Please seek professional, licensed tax advice from a CPA for more information.

Tax Example: 

C-Corporation Flat Rate Tax Rate = 21% 

Total = 21% in Tax

 

I – Investors

Now to my favorite quadrant. The I quadrant is comprised of investors who own assets that produce income. This is the quadrant for truly passive income.

Investors in this quadrant have usually accumulated capital that was earned in one or more of the other quadrants and now they place that capital into income-producing investments to produce even more income. This is the magic formula for financial freedom. 

For example, an investor might purchase shares of a company privately or publicly owned in the form of stock. This influx of capital from the investor helps to fuel the systems created by the business owner, and this fuel can lead to even more growth in the business and for everyone involved. Investing in real estate is a common example of an asset that can produce passive income from collected rents and other income-generating aspects on the property. Investing passively in private placements (apartment syndications) has been my preferred asset class in the I quadrant. 

Kiyosaki points out that the reason why most I quadrant investors often pay as little as 0% in taxes, legally (as shown in the diagram above) is that long-term capital gains tax rates (for assets like stocks or real estate held the long-term) are between 0% and 20% depending on the individual’s tax situation. You can learn more here. Below is a simple illustration for educational purposes only. Please seek professional, licensed tax advice from a CPA for more information.

 

Tax Example: 

2020 Long-Term Capital Gains Tax Rate (For Single Individuals) Earning $78,750 or Less = 0% 

Total = 0% in Tax

 

Conclusion:

There are many paths to financial independence, but most of them lead to the right side of the Cashflow Quadrant – B and I. If you want to achieve financial freedom, it will pay to learn the skills and mindset required to make this move to the right side. I have earned income in the E, S, and I quadrants but the I quadrant has been the most impactful. This is because of a concept I refer to as “Time Freedom”. Which to me, means having freedom and flexibility over your time. When you have more passive income than you have lifestyle expenses, you become financially free. This is where a new world of opportunities and possibilities open up and the world becomes your oyster.     

To Your Success

Travis Watts 

Disclaimer: Travis Watts does not provide tax, legal, or accounting advice. This material in this blog/article has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction, investment, or other change. 

 

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High Net Worth People Pay Taxes…A Lot Of Them

There is a general misconception that high net worth individuals do not pay as much in taxes as those who fall under lower tax brackets. The reality is that wealthy individuals can pay a modest fortune in taxes each year. In fact, they may be subject to a higher income tax bracket and many other taxes that may not apply to those with a lower net worth.

 

Without the right tax planning strategy, high net worth individuals could see a substantial portion of their wealth eroded by taxes. As a wealthy individual, it is important that you understand the many types of taxation that affect you both while you are alive and after you pass away. This is the first step toward developing an effective tax reduction strategy.

 

Common Taxes Paid by High Net Worth Individuals

 

The vast majority of Americans earn a regular income from a salary, hourly wages or profits from a small business that they have started. The median income for a U.S. household in 2018 was just higher than $63,000. For the majority of Americans, regular income is applied to making ends meet and maintaining a comfortable lifestyle. Through a conservative lifestyle, some of the household’s money may be left over for savings, modest investments and extra items. Because of their common financial situation, these Americans pay the majority of their taxes in the form of income taxes. They may have common deductions, such as those related to business expenses, mileage, mortgage interest and property taxes. Many of the other types of taxes and types of tax deductions available simply will not apply to them. As a result, high net worth individuals are subject to a higher income tax rate and additional types of taxes.

 

What are the more common types of taxes that wealthier individuals are responsible for?

 

Income Tax

 

Do you earn income from a salary, commissions, royalties and other similar sources? For families who sit comfortably around the nation’s average household income of $63,000, the tax liability would be 22 percent. While this is a healthy sum of money, it pales in comparison to the tax rate that wealthy individuals pay. Wealthy individuals who are in the highest tax bracket are required to pay 37 percent of their annual income to the IRS.

 

This means that if an individual with $1 million in income did not take full advantage of tax deductions, the taxpayer would pay $370,000 to the IRS for that single year. The high net worth individual’s tax liability would be more than the total income that the average American earns in 5.5 years.

 

Capital Gains Tax

 

Wealth building becomes more challenging when you look at how you are taxed on the sale of assets. Whether you sell stocks, investment properties or other assets for a profit, that profit will be taxed separately from your income tax. The long-term capital gains tax may be as high as 20 percent.

 

Keep in mind that the capital gains tax does not have a flat tax rate. For households earning less than $40,000, no capital gains taxes are owed. If you are married filing jointly, the capital gains tax does not apply unless the family’s taxable income is more than $80,000. This means that the average household is not affected by capital gains tax. For high net worth individuals like you, however, this tax could significantly contribute to the erosion of the wealth that you have spent years building.

 

Estate and Gift Tax

 

Taxation even impacts generational wealth and your ability pass your assets in full to your heirs. After you pass away, your heirs will be assessed a 40 percent tax on your taxable estate. Your taxable estate is offset by several deductions and a sizable exemption. The exemption is reduced by taxable gifts made throughout your lifetime. Even with the deductions and exemptions, very wealthy individuals with a high net worth must have an exceptional strategy to avoid losing a large chunk of their estate when they pass it on to their heirs.

 

Investment Income

 

The net investment income tax is an additional tax on investment income that exceeds a defined amount. Investment income is specifically from dividends, capital gains, royalties, interest and a few other types of investments. If you file as married filing jointly, any investment income over $250,000 will be charged a 3.8 percent tax. Keep in mind that this tax is in addition to the regular income tax that applies to the full amount of investment income.

 

Business Income Tax

 

Many high net worth individuals are self-employed or own their business. If you are self-employed, you are required to pay a separate self-employment tax on top of your regular income tax. As a self-employed individual, your net income from your work activities is taxable.

 

If you are a business owner, you must pay taxes on the business’s net income. The specific taxation rules vary based on the business entity type. In addition to paying a tax on the business’s net income, your business may be responsible for excise tax and for various types of employment taxes. These include the federal unemployment tax, the federal income tax withholding and Social Security and Medicare taxes.

 

Asset Protection Strategies for Wealth Building

 

You have worked hard throughout your life to build a healthy stream of income and valuable assets. To maximize the benefits of your hard work, you must develop an excellent taxation strategy. This should take into account ways to reduce your tax liability on an annual basis. It also should plan ahead to protect generational wealth after your passing.

 

Charitable Donations

 

Whether you need to reduce your personal or business tax liability, making charitable donations could be a smart solution. Individuals may deduct cash donations up to 60 percent of their adjusted gross income each year. The specific limits and rules for charitable donation tax deductions for businesses vary by entity. Regardless of whether you make a charitable donation personally or through your business, the charity must be an approved, non-profit organization.

 

Pass-Through Entity Income

 

One of the newer deductions that may apply to some business owners is the pass-through entity income tax deduction. For select business entities, up to 20 percent of the business’s net income may pass through to you personally without being taxed. There are several limitations and restrictions that apply. Also, this deduction is not available for C-corporation entities. However, it does reduce the corporate tax rate to 21 percent.

 

Real Estate Investments

 

For many high net worth individuals, investing in rental properties is advantageous. This type of passive investing activity provides you with the ability to grow your nest egg. The full value of the property will appreciate even though you may leverage your purchase with a loan. At the same time, tenants pay gradually pay off your loan for you through monthly rent payments. The property is also appreciating throughout this period of time. However, all of the operational experiences, mortgage interest and depreciation are written off. Therefore, the taxable income on some of these properties may be negligible even though you are enjoying a solid stream of income.

 

Notably, this type of passive investing activity offers another tax benefit. Through a 1031 exchange, you can transfer your net profit from the sale of real estate or some other types of assets into another approved investment without paying taxes on the profit. There are rules associated with a 1031 exchange, such as the types of qualifying assets and the time frame.

 

End-of-Life Planning

 

There are numerous strategies that you can apply in your living years to protect generational wealth from burdensome taxation. For example, you may re-title some of your assets into the heir’s name before you pass away. You could also purchase life insurance. Life insurance proceeds are not taxable. Therefore, you can instruct your heir to pay all estate taxes with the life insurance proceeds.

 

There are also numerous entities that you can roll your assets into. These include limited liability companies, irrevocable trusts and asset protection trusts. If your ownership stake in a business will be passed on to an heir, creating a succession plan now is essential. Each of these strategies has unique benefits and consequences. Consulting with an experienced estate lawyer is essential.

 

The Importance of Strategic Tax Planning

 

Through your hard work and strategic investing activities across your lifetime, you have amassed considerable wealth. Protecting your assets from various types of taxation in your living years and beyond is essential. Through passive investing, the smart use of various types of entities and other efforts, you can manage taxation so that your income and the value of your assets are preserved as much as possible.

 

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Being careful about lending money to friends and family

If you regularly make investments in real estate, stocks, bonds, and other investment types, you may feel like investing some of your money with friends and family members if ever they request it. As a high net-worth individual, it’s important to understand that the only way to maintain the lifestyle of an accredited investor is to build your wealth by making smart investments. While it’s possible to make smart investments with friends and family members, it’s also important that you’re careful about lending money to these individuals. The following provides a detailed guide to the precautions you should take when lending money if you want to maintain your generational wealth.

 

Why You Should Be Careful About Lending Money to Friends and Family

 

To effectively maintain and grow your wealth, it’s essential that you make wise investments that can generate a reasonable return. At the very least, it’s important that you don’t make bad investments that cause you to lose all of the money that you’ve invested. No matter the type of investment you make, you always run the risk of losing some or all of the money that you’ve invested. The same is true when making investments with friends and family members.

 

Before you lend some of your money to a friend or family member, it’s important to understand that making these investments should be a financial decision only, which means that your emotions shouldn’t be a factor in the decision you make. Many investors make the mistake of providing their friends or family members with a kind of informal loan, which means that nothing is put into writing and that the terms of the loan are only spoken. If you want your loan to be repaid and possibly provide you with a return, every facet of the loan needs to be in writing.

 

In the event that the terms aren’t put into writing, it’s possible for relationships to be ruined if the individual doesn’t repay you. Before you make this type of investment, it’s highly recommended that you treat this investment like any other that you make. You’ll want to perform the usual due diligence while also making sure that the terms of the deal are in writing. Without placing these terms into writing, you should merely consider your loan to be a gift that won’t be repaid.

 

The way you go about lending money to friends and family members also depends on what the money is needed for. If a family member requests $500 for some medical bills, consider providing the funds as a gift if you can afford to. On the other hand, there are times when people close to you will take business and investment opportunities to you. If a friend of yours requires a loan to help them invest in a property, the terms of this loan should be written down to ensure that this transaction is treated as an official investment. Before you consider lending some of your money to a friend or family member, there are some tips that you should adhere to.

 

Set a Deadline for Repayment

 

The loans that you provide to people close to you should never be open-ended, which only serves to damage your efforts in regards to wealth building. While the friend or family member you provide the loan to may not repay you, it’s still very important that you set a deadline for repayment to occur.

 

If the borrower doesn’t know when the loan should be repaid, they will likely avoid repaying it in a timely manner. Before you lend money to friends or family members, make sure that you write down the exact date when all of the money needs to be repaid by. This document should also include guidelines for monthly payments if the loan is a sizable sum of money. While this form of investment is less formal than most, it should still follow some simple guidelines.

 

Clearly Communicate Loan Restrictions

 

Whenever you lend money to friends or family, you should be prepared for the possibility that this individual will eventually ask you for more money. This is particularly common when the individual in question is starting a business venture and runs out of cash to support business operations. Before you provide anyone with a loan, it should be clear that this is a one-time deal.

 

Understand That These Loans Don’t Typically Earn Interest

 

Lending money to a friend or family member is a very straightforward process when compared to traditional loans. For instance, these loans don’t typically earn interest, which means that you may be unable to obtain a return on your initial investment. However, there’s no reason that you can’t charge interest on the loan in the event that the amount of money you’re lending is substantial.

 

If the money is going towards a real estate investment or a business that the individual is starting, there’s a possibility that they will receive a return from this investment, which is why you should consider charging interest on the loan. Let’s say that a friend of yours is starting a business and wants you to provide them with a short-term loan that will allow them to cover the initial operating costs. If the business venture is a successful one, the company will likely make money, which you should benefit from through interest payments.

 

How to Effectively Engage in Wealth Building

 

Wealth building is a practice of accumulating wealth over a certain period of time. Even if you’re currently considered to be an accredited investor with a net worth that tops $1 million, you could easily drop below this threshold if you don’t understand how to increase your assets. There are three primary components that are involved in building up your assets, which include making money, saving money, and investing money. In order to increase your total assets, you will need to make enough money to cover the necessities of daily life and any debts that you owe.

 

Once your income is able to cover your basic expenses, you can start saving money by crafting a detailed savings plan. Eventually, you should be able to start meeting some of the savings goals you’ve set, after which you can start looking into various investment opportunities. Different investment opportunities provide different return amounts. The top low-risk investments include savings bonds, high-yield savings accounts, and corporate bonds. On the other hand, it’s possible to net high returns through hedge funds, crowdfunding, and making investments into private companies.

 

Lending money to friends and family would be considered a riskier investment. These investments likely wouldn’t be backed up by collateral, which means that you won’t have any recourse in the event that your loan isn’t repaid. Even when you’re loaning to people close to you, it’s essential that you continue to make prudent investments.

 

If you want to make this type of loan but find that the risk is higher than you’re comfortable with, consider balancing your investment portfolio with a couple of low-risk investments that will net you consistent returns. In order to build generational wealth that you’ll be able to pass down to your family members, every investment you make should be a wise one even if the loan is being provided to a friend of yours.

 

Utilizing Passive Investing When Lending Money to Friends and Family

 

If you want to increase your net worth and maintain the lifestyle that you currently lead, it’s highly recommended that you utilize passive investing, which is a form of investment that makes it possible to generate returns without being actively involved in managing the investment. Passive investments are entirely different than the active ones that occur in hedge funds and mutual funds. If you decide to make this kind of investment, you won’t need to deal directly with the usual buying and selling that takes place with active investments.

 

While the passive investing strategy has become increasingly popular on the stock market, it is also commonly used with real estate investments. These investments include everything from crowdfunding and remote ownership to trust deed investing and REITs. For instance, making an investment in an REIT gives you the opportunity to invest your money with income-producing properties. The returns that you obtain from these investments may make it easier for you to lend money to your friends and family. If you can generate steady returns from your passive investments, it’s possible that you could branch out into riskier investments.

 

Lending money to your friends and family members should never be taken lightly. Even if you trust this individual completely, you always run the risk that your money won’t be repaid on time or in the full amount. If the loan is a sizable one, every detail of the loan should be recorded to ensure that you don’t lose money in the process. By taking certain precautions and by knowing what to expect from this process, you should be better equipped to handle any frustrations that occur along the way.

 

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