Imagine buying a little machine that spits out $500 cash every month. How much would you pay for such a gadget? Now imagine owning 10 of these cash machines. You’d have an annual income of $60,000, and all you’d have to do to keep that money is maintain the machines.
How would that feel?
Welcome to the world of income-producing assets! Income-producing assets can come in many forms. A friend of mine wrote books and over time became a popular author. His 10 published books have become his cash machines.
A neighbor bought a fast food franchise, and used the profits to build up to 100 fast food restaurants. Even a small profit on each of those cash machines makes for a healthy passive income.
You can buy laundromats, vending machines, create products, write songs, and sell stuff on a website. You name it, there are many different ways to create passive income. You just have to find the one that works for you.
What if your cash machine broke down? Would you be upset if you had to use some of the machine’s cash for repairs? Of course not, because once it’s fixed, the machine can go back to spitting out cash. No need to worry about retirement or wait until you’re 65 to stop working.
Americans have been duped into thinking that contributing to traditional retirement plans are the same as buying cash machines. As the Baby Boomers head toward retirement, they’re realizing tax-deferred plans that were supposed to spit out cash for the rest of their Golden Years are broken and probably can’t be fixed.
What did the Baby Boomers do wrong?
1. They lost control. They handed money over to a stranger.
2. They lost interest. They expected the stranger to take as good care of their cash as they would, so they stopped paying attention.
3. They settled for too little. They allowed upper-management to skim all the profits.
4. They got too patient. They believed what they were told - that if they just waited long enough, the money would be there for them when they needed it.
In order to create a real cash machine, you’ve got to be in control, pay attention, and be able to keep the profits. And most importantly, the machine has got to create real income for you - now.
Most people expect at least 6% annual return on their investments, so they’d generally pay around $100,000 for a cash machine that spit out $500/mo ($6000 annually). Unfortunately, not everyone has that kind of money sitting around. But what if you could borrow $80,000 and pay it back over 30 years using money from the cash machine?
Where can you find a deal like that? Cookie cutter homes in good neighborhoods near stable jobs are some of the best cash machines available today. When these homes are rented out to good families, the monthly rent becomes the owner’s income. And as much as people like to complain about the responsibilities of a landlord, it sure beats a 9-5 job! Toilets don’t break every day, and even if they do, the landlord can make it the tenant’s responsibility to fix what gets broken.
Wealthy people create cash machines in two ways: owning businesses or real estate. Real estate is the simpler choice. Don’t believe me? Ask a lender! Walk into a bank and see how much easier it is to get a loan on a rental home you just found than it would be on a well-researched business plan.
Today there are 117 million households, of which 79 million own their own homes. That leaves 37 households in need of a rental. Assuming an average of $150,000 per property, there is $3.4 trillion in rental properties out there. That’s nearly double the size of traditional investments.
If you have not taken the time to learn about real estate as an income-producing asset, you’re listening to the wrong advisors. With historically low home prices combined with low mortgage rates plus rising rents, these cash flow machines have never yielded the double digit returns we’re seeing today. Don’t miss out.
Kathy Fettke is CEO of www.RealWealthNetwork, the #1 resource for new and experienced real estate investors who want to build a passive income that will last a lifetime. Membership is free.
Showdown in Jackson Hole: The Fed Challenged on its Own Turf in Wyoming by Group Likely to Finally Start Dismantling it | Rachel Alexander