One of the subjects closest to our hearts here at
Midas is the subject of getting your money working for you and not the other way
round. We have been given mental programmes by our parents, our schools, the
banks and the government which say "Go to school, get good qualifications, get a
good job, work til you are 65 and then retire on your savings."
Think about it for a second - who benefits from
this model?
The Banks? Yes! Because they can charge you
interest on your mortgage for 25+years and you don't question this.
The Corporations? Yes! - Because they get to grow
loyal employees who give them their labour for the best years of their lives.
The Schools? - Yes - because they are funded by
governments to create loyal employees.
The Government? - Yes - because employers and
employees taxes create funds
But how do you benefit really in this deal? Most
people work in jobs they don't particularly like. Most of us would do something
different if we could. Most of us pay our mortgages thinking we have no other
alternative. Most of us spend our entire working life giving up the best part of
our days to a job. Most of us don't question this model at all thinking it is
normal and are unaware of an alternative.
Well let me tell you about a secret that a small
minority of people have come to learn and that is passive
income.
This is income that is earned by an asset and pays you over
and over again , a bit like a royalty.
Let me give you a few examples of a passive income
producing asset and see if this gets you thinking.
1. Licensed software - created once and sold over
and over again
2. Digital images - taken once and sold online or
by print
3. Music - sold online or by CD
4. Books
5. Subscription business models - e.g. broadband,
line rental, sports club memberships where value is given at fractional
costs.
6. Investments - Equities - shares,
funds, bonds, trusts etc etc - where a lump sum returns regular dividends
7. Investments - Property - where rental income is
earned monthly
8. Network Marketing Businesses - where the efforts
of your team as well as your own build a monthly income.
9. Online Information Businesses - selling your
intellectual property or expertise over an over again via ebooks, webinars,
audios, DVDs
The recurring theme with all of these ideas is that
they pay you while you sleep - literally your money is working for you and not
you swapping time for money.
Thinking about number 6 for a moment - Property
Investment is often done without even considering it an investment - your home.
Think about the equity in your property and ask yourself - did you work hard to
earn that money? Unless you have changed the property since you bought it I suspect the answer
is no. Could you have saved this money any other way? Well this is your money
working for you and one of the best ways of growing a passive income in your
life.
I recommend the following 2 books to read which
will expand these ideas and give you inspiration - it certainly did for me in my
life.
Rich Dad Poor Dad - Robert Kiyosaki - in this book Robert explores the concepts behind wealth creation and compares mindsets of the employee, the employer and the investor and teaches you how powerful passive income is.
Start Late Finish Rich - David Bach - in this book David shows you how to tailor your life where it is today and start changing your finances whatever your age to increase wealth and become financially free.
In my next blog we are going to cover the subject
of "Financial Freedom" and what it means , especially when you have a property
portfolio to create the life you choose, instead of the life you are forced to
live.
Thank you for reading this blog.
Wishing you every success
Robin Campbell, Director Midas Estates
