This video will help you create passive income & become financially independent. A key to becoming a successful real estate investor is understanding the millionaire mindset. Things that are common sense to a millionaire can be a mystery to those who’ve had little to no financial education. One key to understanding how millionaires think is by learning the difference between assets & liabilities. So let’s compare assets to liabilities & explain how the right assets will make you wealthy & why liabilities will keep you from retiring. Asset make you money. Liabilities cost you money.
To become financially independent, you need to find multiple ways to build passive income, viewing assets as tools that will give you cashflow. Here’s a list of assets - Stocks, Bonds, Royalties, Intellectual property, & of course real estate. Assets pay you dividends, interest, royalties, or rental income. You need to create multiple streams of income.
A liability is something that cost you money. Examples of liabilities are a car, boat, phone, computer, TV, or toys. Many liabilities come with a large up-front cost & many leave you with a large monthly bill. Some liabilities, like your personal home, phone, internet, & cable, will have a monthly bill pretty much forever. Things like homes, cars & boats also have high insurance & maintenance costs. If you’re serious about becoming financially independent, you’ve got to find a way to remove or greatly reduce your liabilities. Really, you need to stop buying liabilities & start investing in Assets.
A house can be an asset or a liability. The home you live in is a liability. Because it’s costing you money each month. A house is still a great investment because you need to live somewhere anyway & you should build equity. The difference between the home you live in & a rental property is that the rental is making you money, which makes it an asset. So, by rule, a home that you live in is liability. In my last video, I talked about the power of owning a home & how much just 1 home can increase your net worth? What if you had multiple investment properties. Can you imagine what your net worth would increase to, especially over time? That’s why I teach the 3-10 real estate Strategy. If you can buy just 3 homes over the next 10 years, you will have set yourself up for a great retirement.
Is it okay to have liabilities? Of course. We all have hobbies & things that make life worth living. We can’t just remove everything we love about life to invest, but we do need to limit our spending. So, here’s my take on the largest liability of them all, your home. 1st buy a home for yourself but if possible, find a way to make it an investment property too. To learn more about this strategy & your options, check out my video, The #1 Millionaire Secret to building Wealth. So, buying a home to live in is a liability, but it’s a necessary step & the foundation to building wealth. Even though your home is costing you money each month, you’re still building equity. In the long run, home prices have always gone up. Even though your home will cost you money each month, in the long run, you should still come out ahead especially if you used my strategy of buying a place with space that can be rented out. Be wise when you buy your 1st home. Find something affordable & if possible, put 20% down.
There are 2 reasons most people never acquire assets. The #1 reason is the lack of education. A lot of people out there don’t have a clue how to make money work for them & instead spend their entire life working for money. #2, it usually takes time, patience & major sacrifices to accumulate the cash to buy assets.
The power of investments includes both the monthly income & the equity. Over time, this adds up & in a hot market, it will add up fast. This is all part of the 3-10 RE Strategy. Once again, it takes time & money, but you can do it.
If you start collecting assets while removing & avoiding liabilities, you’ll soon be purchasing investment properties. The goal is to put enough assets in play that you can live comfortably from the income they are creating. Can you imagine what your life would be like if you could replace the money, you earn by going to work with passive income? Make a plan with a determination that you’ll make the necessary sacrifices to make this dream a reality.
#1 Millionaire Secret -
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