Making Money?
- Comments: 7
Having a “good life,” in the traditional since, involves a good education, good job, and a lot of good ol’ hard work. I don’t know about you, but this doesn’t sound too good to me.
In Scottsdale, Arizona, where I live, it is not uncommon to see a Ferrari, Bentley, or Lamborghini. If someone can afford a Lamborghini, I suspect they live better than just a “good” life. How did they get there? This is a question I often ask myself.
I see both scenarios almost everyday. The guy who seems like he has a hard life - stressed out, busy, no time for anything, working very hard, and completely broke. While the other guy is driving his BMW, going to Europe this summer for two weeks and just got off the 18th green. What gives?
How are both of these situations possible? What do I have to do to be the guy driving the BMW?
One possible answer is to create passive income and then reinvest it. There are many avenues in which to do this. Real estate here in Arizona is the big thing. Setting up rental properties in which you make positive cash flow from the tenants is a way to create income. That is, as long as your mortgage payment is small enough.
To me, setting up as many passive cash flow streams is key to living a great life. Imagine getting paid while you don’t work.
I have met and spoken to several real estate investors. The most common ways they invest are:
1. Flipping Houses- buying houses that need work, fixing them, selling them for profit
2. Rental Properties- tenants paying per month more than the mortgage
3. Foreclosures- purchasing houses at auction that can be sold for profit
Before investing in real estate, I recommend doing your own due diligence, research, and more research.
Rental business brings in a lot of pain, though… If your tenants are bad, you will end up repairing your property now and then… I hate pet owners who dont look after their pets and let them destroy apartment or make the carpet stink big time…
Josh,
I have been busy lately and have not visited your blog for about 2 weeks. Love the new header.
The post on raising money was very good too.
This one tells me you don’t want to work hard but you want to have it all. Hard work never hurt anyone who was in shape. Hard work takes different forms. Some is mental, some is physical, but it all requires attention. Thomas Paine once said so, “What we obtain too cheap, we esteem too lightly”
I would say that what you observe does not always reflect the amount of work it took to develop. Property ownership is not always a positive cash deal - fire, weather, and vandalism can be very costly. Consider that your inventory will be in a cash flow negative situation for a few years in most cases.
Still, you are a very focused person and I’m sure you’ll find a way to have a good life. YOu just may have to work at it more than you expect.
I’ve done my own bit of due diligence with real estate. My biggest problem is getting over the fear of getting started and making that initial leap into my first property.
Josh, just getting caught up on my readings of my favorite blogs. In snooping around I found out that you lent Rich Dad Poor Dad by Robert Kiyosaki. In addition to that I just read this wonderful post talking about rental properties.
I read that book and it opened my eyes upto the real estate rental market.
Nice Post!
Another great advantage of passive income is breaking the direct connection between the amount earned and the time spent working.
If you can create passive income that doesn’t fill your time 9to5, you can still keep a job if necessary while earning money from your investments.
It may even be possible to hire someone to manage tenants and property problems and using the extra time for more investments in either a JOB or other passive income opportunities.
These are great ways to make money. If you have money you generally always can make money.
Flipping houses is a great way to make money but in order to do that, you need money and not everyone has the money.
Having said that, you need to do your research before spending some $$