Let’s face it – if you’re reading this blog then it’s likely that you’re not rich yet. Unless of course you are our president-Elect. Considering how often I write about Mr. Trump, I like to think he drops by to see what all the fuss is about. Hey Mr. President-elect, good luck in the White House. Do us all proud and show us that the far left was wrong.
But I digress. You wanted to know why you’re not rich. There’s a very simple reason for that: because you make your money in a lousy J.O.B. (Just Over Broke). I’ve said it before and I’ll say it again – a regular run of the mill job is for suckers. No matter how hard you work, you’ll never get out of the rat race. You want to really make it in this world? Learn about the three types of income:
Earned Income is For Losers
To borrow a catchphrase from our future president, there are winners and losers in this world and making your money with a regular 9-5 paycheck is for losers. Sure, it’s a steady job and maybe you can afford to keep a roof over your family’s head with that job. Maybe you even manage to get the whole clan into the old minivan for a family vacation somewhere.
Hey, that’s great. If that’s all your ambition in life well then more power to ya. You’re getting what’s called earned income and it’s the most common kind of income there is. Basically, you’re trading your time for a fistful of dollars. The thing is, time is finite. You only get so much of it before you run out.
How do you do better for yourself and buy that Rolex you always wanted or the fur coat and the vacation in Paris your wife has been nagging you about? Whatchya gonna do? Rob a bank? I mean sure, you could work more hours but you’ve got to sleep sometime. And ultimately, if you work too many hours, you’ll just end up exhausted and ready to collapse.
In other words, you’re ultimately a loser.
This is the kind of thing that the Donald made his money in. He bought buildings, fixed them up and then sold them for a profit. Basically, investment income, sometimes called portfolio income is where you buy something and then sell it for a profit. Like all that silver I’m sitting on at home – someday if I want, I can sell it all for a boatload of money.
Of course there are lots of things that you could invest in. Everything from baseball cards to homes to stocks would count as investment income. Wait, what? Stocks? Yes, stocks are investment income too. Surprise! I know that I often tell you to buy stocks because it’s a great way to make money and it’s true. However, if you think about it, even stocks are just another form of investment.
Basically, when you buy a stock, you buy yourself a tiny share of a company. Once upon a time I owned stock in Toys R Us and I always wanted to go there and start bossing around the employees, telling them I was their boss because I owned stock in the company. Of course, I didn’t have quite enough stock to do that with but hey, I was a kid and that was my kid understanding of stocks.
The trouble with investment income is that it’s still finite. Sure, you can buy a hundred shares of Apple Inc. and then turn around and sell it a few years later for a profit and you made yourself a nice little windfall. The thing is, that stock, once it’s gone, it’s gone. You’re not making more money from it once you sell it.
Want to know why you’re not rich yet? Because you don’t have any passive income. This thing is the gold standard – the one that everybody dreams of but few people achieve. This is where you’re getting money for doing nothing and the money just keeps on coming in all the time. It’s a beautiful thing and it’s the kind of thing that really rich people know about.
Basically, passive income means that you do absolutely nothing but sit on your duff and collect the checks. Okay, so it’s not quite that simple but it is the best way to make it in this world. Of course, the trouble with passive income is that it is hard to do at first, which is why most ordinary people don’t do it and as such, they don’t make a whole heck of a lot of money.
Basically, what you do is to either create something which makes you money on a regular basis or buy something that does it. For example, buy yourself an apartment building and then rent out the apartments. Sure you have some expenses involved in doing this – upkeep, management and the like. Hey, that’s part of the deal.
On the other hand, if you buy an apartment building and have people managing the place on your behalf and you still turn a profit after the fact well, heck, you’re on easy street, right?
Oh I know what you’re thinking – where am I getting millions of dollars to buy myself an apartment building? Good question. The answer is, you don’t have to. I mean, if you’re determined to do the whole apartment building thing, it’s not that hard to get investors together and even to get a mortgage. You’ll have to do some grunge work at first but eventually, you’ll be on easy street.
Then again, there are other kinds of passive income too – you could write an information product, basically an eBook teaching people something you know. Any idiot can put one together – there are always things that a person knows that someone else will pay good money for. You just need to write the eBook and then get others to sell it for you through affiliate marketing.
You want to be rich? Learn to stop trading your time for fistfuls of dollars and start earning money the smart way – otherwise, in the words of our future president, you can continue to be a loser while the rest of us are winners.