Passive Income, realized Income, reoccurring Income that is how you retire. It sounds nice but what is it and what does it mean. A good resource is The Complete Guide to Investing in Rental Properties
For fun I'll go through that in brief here.
Passive Income means you don't have to do it daily. Or it takes little to no work. It not something you will trade time for money, service for money, or product for money.
I have a rental house. I'm renting it for $1,000 a month but PITIHOA (Principal, Interest, Taxes, Insurance and HOA) are $700 I have $300 left over. At the end of the year that is $3,600. Now after the tenant moves out it costs you $1,200 to fix and replace things. That will leave you with $2,400 ($200 a Month) of cash flow and passive income.
That you didn't have to wake up earlier then you wanted to to earn. It is money that gets sent to you and you can save or spend, long as you keep track of it. Best part of cash flow ones you get a couple sources going it's easier to make it rain. (I am street).
Realized Income. This in the income/ money you get in your hand. If you earn $300 a month and you aren't allowed to use it, spend it, or touch it till... I'll say 10 years. What good is that to you now? Not much. Between inflation and life having that $200-$300 a month now will go a lot further then 10 years for now. If feel differently then you can cryogenic-ally freeze your cash in that high yield CD of 1%
That leads to the Ghost of Christmas future. Reoccurring Income. At this point do you see the train coming on this? It's close to the fact that income has to be realized. Okay I'll tell you. Using the numbers that are in this blog.
If you have $300 coming in to you you can save some for costs on the house and spend the rest. If you save $100 and use the other $200 on food, car payments your primary house or Candy. So by the years end you will either have saved or spent that $200 a month to equal $2,400. Over that same 10 year period you will have saved or spend $24,000. (In this example its cash flow you're allowed to use the money when you need/ want to). Over these 10 years you can pay things off quicker, reinvest the money, take that second honey moon. Or if you reinvest it enough replace your working income.
In this next case lets say you're not allowed to use this money no matter what for 10 years. Or if you do you have to pay a penalty or pay interest back to it. Meaning you're going to end up paying more to use your money in the example. In this example even if you saved up enough where you could/ would reinvested it to make that $300 into $600. You can't.
If you save that $300 a month at years end you're have $3,600 and at the end of 10 years you'll have $36,000. You get it all at once and now you have the cash to reinvest or spend on your family and loved ones.
If I can't defer time, I don't want to defer life.
The Self Directed IRA is a great way to help with your retirement. I'd recommend reading up on it.
And finding a company that can help educate you and show you the best way to maximize that money that would normally go stale waiting for you to get old.
Retire Rich With Your Roth IRA, Roth 401k, and Roth 403b: Investment Strategies for Your Roth IRA Explained Simply (Back-To-Basics)
For fun I'll go through that in brief here.
Passive Income means you don't have to do it daily. Or it takes little to no work. It not something you will trade time for money, service for money, or product for money.
I have a rental house. I'm renting it for $1,000 a month but PITIHOA (Principal, Interest, Taxes, Insurance and HOA) are $700 I have $300 left over. At the end of the year that is $3,600. Now after the tenant moves out it costs you $1,200 to fix and replace things. That will leave you with $2,400 ($200 a Month) of cash flow and passive income.
That you didn't have to wake up earlier then you wanted to to earn. It is money that gets sent to you and you can save or spend, long as you keep track of it. Best part of cash flow ones you get a couple sources going it's easier to make it rain. (I am street).
Realized Income. This in the income/ money you get in your hand. If you earn $300 a month and you aren't allowed to use it, spend it, or touch it till... I'll say 10 years. What good is that to you now? Not much. Between inflation and life having that $200-$300 a month now will go a lot further then 10 years for now. If feel differently then you can cryogenic-ally freeze your cash in that high yield CD of 1% That leads to the Ghost of Christmas future. Reoccurring Income. At this point do you see the train coming on this? It's close to the fact that income has to be realized. Okay I'll tell you. Using the numbers that are in this blog.
If you have $300 coming in to you you can save some for costs on the house and spend the rest. If you save $100 and use the other $200 on food, car payments your primary house or Candy. So by the years end you will either have saved or spent that $200 a month to equal $2,400. Over that same 10 year period you will have saved or spend $24,000. (In this example its cash flow you're allowed to use the money when you need/ want to). Over these 10 years you can pay things off quicker, reinvest the money, take that second honey moon. Or if you reinvest it enough replace your working income.In this next case lets say you're not allowed to use this money no matter what for 10 years. Or if you do you have to pay a penalty or pay interest back to it. Meaning you're going to end up paying more to use your money in the example. In this example even if you saved up enough where you could/ would reinvested it to make that $300 into $600. You can't.
If you save that $300 a month at years end you're have $3,600 and at the end of 10 years you'll have $36,000. You get it all at once and now you have the cash to reinvest or spend on your family and loved ones.
If I can't defer time, I don't want to defer life.
The Self Directed IRA is a great way to help with your retirement. I'd recommend reading up on it.
And finding a company that can help educate you and show you the best way to maximize that money that would normally go stale waiting for you to get old.
Retire Rich With Your Roth IRA, Roth 401k, and Roth 403b: Investment Strategies for Your Roth IRA Explained Simply (Back-To-Basics)
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