You need more of them. If you’re just getting started, these types of investments should be your first. Here’s why you can’t live without them…
Earned Income Isn’t Guaranteed
While many people may be willing to work until they are 55 or even 70 years old, there’s no guarantee you can do that. The harsh reality is that most people won’t be able to work as long as they expect to. There’s no guarantee you’ll be able to get to work next week. There is definitely no such thing as job security anymore. You could be in an accident, get sick, or have to be there for someone in your family who is facing these issues.
Without income, bankruptcy is inevitable. It’s just a matter of how soon. You can lose everything. In contrast, if you had $50,000, $100,000, or $250,000 in passive income coming in every year, you’d be just fine. If you choose to continue to work you can, but you’ll never need to.
Don’t Deplete Your Capital
It doesn’t matter how big your bank balance or stock market portfolio is if you have to start living off of it. You can burn through several million dollars pretty quickly in retirement. Especially when you add in housing costs and healthcare.
If you haven’t invested for passive income, you’ll be taking down part of your nest egg every month. Inflation and taxes could also be taking a bite out of that money at the same time. Soon you won’t have anything left to invest.
With passive income investments, you can live off the cash flow and dividends, and let your capital continue to grow.
Less Speculative Investments
By nature, passive income investments are typically designed to be more stable and consistent. You are plugging right into yields and cash flow.
Other types of investments, like flipping houses, stocks, cryptocurrency, or tech startups are designed to be highly volatile. You can get wiped out in a day. Usually they just happen to crash when you need the money the most.
There are a variety of ways to structure passive income investments so that you pay far fewer taxes than on earned income or investments designed as large bets on appreciation. That means you can make less on the topline and still keep a lot more with a lot less work.
Most investors aren’t just thinking about themselves. We are thinking about providing for others and having an impact after we are gone, right? Unfortunately, heirs typically liquidate most assets at a discount for cash immediately. It isn’t long before that inheritance to be vaporized by spending and poor money management. If you leave them passive income investments instead, they can be provided for every month, while preserving capital to keep on producing for a generation or more.
ABOUT THE AUTHOR
Bill Zahller is the President of Park Capital Properties and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Properties in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalProperties.com for more information.