Today’s show got a little wild. We talked about spinsters, cat ladies, cat men, out of control debt, maxed out americans and what is the difference in passive income and flipping income.
People love talking about passive income. At the end of the day internet guys talking about ebooks, books, courses, consulting and many side business income ideas those are ACTIVE.
Passive income is income streams you start but do NOT require continuous action or daily attention to. For example we will use stocks. You will need much more than you think.
Example Whitestone REIT sitting at around 12.20 with dividend of 9%. Monthly get about .09 on each 12.20 of stock you purchase.
If following the Financial Freedom Starts at the Basement course then putting $25 dollars a way a week would get you about 2 WSR purchases a week.
$25 would be $2 annual dividend or .18 a monthly dividend.
10 shares $120 would be $10 annual dividend or 0.90 monthly dividend.
100 shares $1200 would be $100 annual dividend or 9.00 monthly dividend.
1000 shares $12,000 would be $1000 annual dividend or $90 monthly dividend.
See How long it takes you to get to $1000 ANNUAL income? Now you could go faster with $400 a month or $1000 a month this is just an example.
Now I am a believer in Mr money mustache principle keeping very low expenses so you can retire faster, but most folks want to travel, have nice cars and eat out at restaurants. I think nothing is wrong with this if you make extra ACTIVE income to live this lifestyle.
Flipping income. We all want to move a bit faster but let me be honest you are not taking $1000 bucks and turning it into $100,000 dollars. Now you can start a business at $1000 dollars and take the company to $100,000 dollars but it will not be in 30 days.
Building a business that lasts could take years to create healthy systems.
Flipping income via craigslist sales, ebay, amazon FBA, and real estate wholesalers is a FULL TIME JOB. It takes practice, focus and energy. When you see million dollar sales your P&L could still be less than $50,000 a year.
Even in real estate flipping it will still require at minimum $10,000 to $30,000 through various credit cards or business lines of credit. WHY? Because even if you find a motivated seller, how fast can you find a motivated buyer? If you do not have a list to call on you may be stuck with a property you will need to do repairs on to get some refinancing or hard money loans.
PBS Faking Normal Special
I do not like the term but it has merit in the story. If you are a woman with no children and unmarried at some point you may have to DOUBLE your savings. Double your investments.
I live in austin texas and there are quite a few “cat ladies” or “cat men”. Basically multiple men with 2 to 3 dogs or cats. Sure people love pets but more and more single people are over DOING the pet ownership in exchange for people contact. Studies show more people live alone and pet ownership is higher in those situations. Pets are expensive I personally know people who pets have had multiple expensive $1000 surgeries. The key is moderation and does a pet actually fit in your budget.
Maxxed out Americans
Over 70% of Americans are living paycheck to paycheck.
Over 70% of Americans do not have $400 dollars in case of an emergency TODAY.
The key is financial FREEDOM.
Make a plan. Lower your expenses. Double your investments. Its a long ride flipping can build you capital but investing builds you a lifetime of income.