Categories
Money

How to Become a Millionaire in 10 Years

Often, when people consider what a millionaire is, they think of people like Brad Pitt (movie star), Elon Musk (inventor and investor) or Michael Jordan (Basketball legend). In fact, many of these examples have evolved from millionaires to billionaires over time. However, most millionaires live a simple, quiet life. The road to riches is not necessarily glamorous or exciting; In fact, learning how to become a millionaire in 10 years requires sacrifice and discipline.

Guidelines for How to Become a Millionaire in 10 years

Currently, there are over 18 million people in the United States who are millionaires. In fact, some of those millionaires probably live in your neighborhood. Perhaps your next-door neighbor is a millionaire.There’s a popular belief that millionaires attain their money the easy way: inheritance, winning the lottery or through criminal activity. The truth is that the majority of millionaires discovered how to save a million dollars. In the book, “The Millionaire Next Door”, by Dr. Thomas Stanley and Dr. William Danko, it is revealed that most millionaires surveyed were self-made. These men and women started from scratch, with little to no money, and worked hard at saving and investing.

Preview

  • Definition of a Millionaire
  • Learn How to Become a Millionaire in 10 years
  • Discover How to Get Rid of Debt and Live Frugally
  • Learn How to Save and Invest Like Millionaires
  • Develop a Financial Plan and Start Early
  • Develop a Team Who Can Help You Grow Your Wealth

Millionaire Definition

A millionaire is defined as a person who has a net worth of at least one million dollars. Net worth is calculated by subtracting your debt from your assets. For example, if you own a $400,000 home, a stock portfolio of $800,000 and owe $100,000 in debt, then your net worth is $1.1 Million ([$400,000 + $800,000] – $100,000 = $1,100,000).

When people think of what a millionaire is, they imagine people like Leonardo DiCaprio (movie star), Elon Musk (inventor and investor) or Donald Trump (real estate tycoon). However, most millionaires live a simple, quiet life. The road to riches is not necessarily glamorous or exciting; In fact, becoming a millionaire requires sacrifice and discipline.How to Become a Millionaire With No MoneyAs a result, we’ve developed some guidelines that will show you how to become a millionaire in 10 years. If you are able to follow these guidelines, financial success can be in your future.

Pay Off All Debt

Learning how to become a millionaire in 10 years starts with no debt. Most millionaires did not get rich by borrowing money. In fact, most people with a significant net worth avoid debt. They know that when you have debt, money is working against you. So, it’s important to pay down all your debt prior to taking the next steps. Later, you can make your money work for you, not against.

Create a Consistent Source of Income

Put Aside 10-15% of Your Regular Income for Investment

You don’t have to own your own business or be an entrepreneur to be a millionaire. There are many millionaires who are average people who work 9-5 jobs every day, just like you.

One of the keys to their success is having a consistent source of income. Every month, or each paycheck, they divert 10-15% of their earnings to investment(s). An example would be investing in a 401(k), Investment Retirement Account (IRA) or Real Estate. Year after year, your money will grow and work for you to create wealth.

Begin Saving Money

Saving Money teaches you the habit of not spending and allows you to take advantage of opportunities

Saving money is a lost art. And learning how to become a millionaire in 10 years starts with saving. Historically, people’s lives depended on saving money. If a natural disaster struck or just bad luck, people could fall back on the money they saved to stay alive. Today, life is easier. Credit is widely available to most people and we frequently borrow money for cars, houses and purchases on credit cards.

Long Term Financial GoalsBut, saving money is critical to becoming a millionaire for several reasons. First, learning to save money requires that you not spend all your money. Legendary investor, Warren Buffet, famously said that the most important rule of investing is “to not lose money.” So, don’t spend all your money. Instead, save some money. Saving money is an excellent habit to learn.

Second, saving money will give you the confidence to seize opportunities when they arise. When people live paycheck-to-paycheck, they waste their time struggling with bills, instead of focusing on future wealth creation.

Create a Budget

It’s important to keep track of your money. Learning how to become a millionaire in 10 years requires that you know where your money is at all times. And a budget helps you achieve that objective. Having a balanced budget means spending less of your paycheck. Preferably, you will have a significant amount of money left over to pay off debt and for investing. In short, every investor and business owner should budget, whether you are a large corporation or just one person.

There are many budget options online, including spreadsheets, mobile apps and even printable budgets. Check out our “Best Budget Apps” article for more information and recommendations.

Live below your means

Millionaires do not spend money on unnecessary expenses, such as eating out, new cars and designer clothing

In many cases, frugal living is the cornerstone of success for millionaires. This simply means spending less than you make. A simple monthly budget can assist you in determining whether you are meeting your goal.

Unfortunately, living frugally is not popular in the 21st century. Popular culture dictates what “normal” consumer behavior looks like. And it’s considered normal to go out and spend money at restaurants, on vacations and the like. In addition, it’s “normal” to buy a big house and drive a new car.

The reality for millionaires is that they don’t ascribe to normal behaviors. People with the millionaire mindset only purchase what is needed. They don’t buy new cars or fancy things. As a result, the extra money saved from this frugal behavior is put to work in investments.

Develop a Financial Plan

Once you’ve developed the millionaire mindset, it’s time to create a financial plan. Write down the details of what you want to achieve. If your goal is to own one million dollars in real estate, then plan accordingly. Include details of how you will acquire money to invest and how it will be allocated. In addition, set a timeframe for when you expect to achieve your goal. Your budget will be an addendum to the plan. Finally, review the financial plan frequently and assess your progress.Day Trading Options

Another thing to consider when developing a plan for how to become a millionaire in 10 years is to think on a short-term basis. For example, make an annual plan for each of the next 10 years, detailing how much money or investment is required to reach your goal. You plan might look something like this:

Year 1: Save $25,000 from current job/business.

Year 2: Invest in first real estate property to create passive income; save $25,000.

Year 3: Invest in 2 new real estate properties that generate X amount of passive income; save $50,000.

Year 4: Continue plan through year 10 until $1M net worth achieved. Add more detail…

Develop Good Habits

Good Habits Include Budget Control, Staying the Course, Investment Knowledge and Discipline

Developing millionaire habits is critical on the path to acquiring wealth. Once you’ve established your goals and your financial plan, you must implement good habits. Good habits include:

  • Budget Control
  • Staying the Course
  • Investment Knowledge
  • Millionaire Habits and Discipline

Budget control means that you operate under a balanced budget. Spending is controlled so that remaining cash flow is routed toward smart investments. Furthermore, good investments are critical for converting thousands of dollars into millions of dollars.

Staying the course requires that you consistently repeat what you are doing, so long as you are successful. If something doesn’t work, it can be changed. But, the power of earning from compounding interest is continuously investing money.

Good Investment

Being a good investor requires that you continuously educate yourself. You want to learn as much as possible about your investments. In addition, you will accrue knowledge and wisdom on different investment strategies over time.

Learning what has worked for other millionaires is the easiest and most secure strategy for success with money. Millionaires get up early each morning and focus on their goals. Investing money is a priority to them and their focus is on earning and business. Many successful millionaires make time for self-development activities, such as exercise and meditation. And they make these habits part of their daily ritual.9 Everyday Habits Of The Average Millionaire

Invest Early

The sooner you can get started on your millionaire journey, the better. Many millionaires credit their success not to windfall earnings, but to incremental investing over long periods. Compounding interest is a powerful tool that can work for you in growing your wealth.

Grow Your Income

Maximize Your Income by Starting a Business or a Side Hustle

Once you’ve mastered budgeting and your debt is settled, you want to maximize the money that you earn. You will find that expenses remain almost the same from year to year, but increasing your income can have significant results. Earning more money means that your contribution to your investments will grow your wealth more rapidly.

There are many ways that you can improve your income. For example, start a small business out of your home. Explore what you like to do in your spare time and determine if you can make money doing it. For example, photography can be a hobby or a business.

Other sources of income can be part time jobs, weekend work, side hustles or even buying and selling things.

Final Thoughts: How to Become a Millionaire in 10 years

Many Millionaires Operate a Business, Network and Work with a Financial Team

Learning how to become a millionaire in 10 years will not be easy. First, many millionaires reach their goal quicker by operating a small business. Owning a small business allows you to control how the company operates and take more profit for the extra labor you put in.

Second, maximize the networking that you do with others. Participate in conferences or just promote contact with like-minded people in your area. The network effect can have positive financial benefits for you. Don’t isolate yourself.

Finally, surround yourself with a financial team. Seek out a respected tax professional, attorney, business coach, etc. Sometimes an ounce of prevention is worth a pound of cure. Staying in good legal standing with state and federal regulations can help you grow. In addition, these professionals can save you money in the long term.

These guidelines are the simplest path on how to become a millionaire in 10 years. Want to learn more about saving and investing?

Read More:

Ways to Save Money on a Tight Budget

10 Things to Know Before Starting a Budget

The Best Budget App

How to Make $200 Fast

Best Budget Planner

Home Buying Power

Financial Planning Services

Value Investing Books

Wealth Building Cornerstones

Best Investing Books of All Time

How to Become a Millionaire in 10 years

How Much Savings You Should Have at 40

Why Saving Money is Important

Debt Elimination

Disclaimer:

It is important to note that Piggy Bank Coins does not provide financial advice. We don’t endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.

 

Categories
Money

How To Earn Money For Teenagers

We will discuss how to earn money for teenagers, including money management, budgeting, credit and financial planning for the future.

There are many ways how to earn money for teenagers today. In fact, there is high demand for young people in jobs all over the United States. However, teens commonly run into trouble when it comes to spending, managing a budget or using credit cards. For example, when a teen is given a credit card the first time, they may believe that there is no limit to how much they can spend. However, they quickly find out that credit cards have limits, and you are penalized by the credit card company when you overspend.

In this article we will discuss how to earn money for teenagers and how they can keep the money through learning good habits. Every parent has the ability to influence their teens personal finance habits. However, whether the influence is positive or negative is determined by you. Here we will discuss how to earn money for teenagers and how you can help teach teens about saving, budgeting and investing.

Ways To Make Money As A TeenTeenagers Learn by Working Hard

Great Ways to Earn Extra Money Include Seasonal Work, Temporary Jobs and Starting a Business

One of the great methods for how to earn money for teenagers is giving them a job. For example, give teens work to do around the house or assign them chores to do. They can earn an allowance by completing tasks. Telling teens about money can be helpful, but experience is the greatest teacher.

If teens are ready for more responsibility, then encourage them to take on a real job outside the family home. There are many jobs available for entry level workers like teenagers. It’s not glamorous to deliver pizzas or wash cars, but these are great opportunities for teens to learn the value of money earned.

Seasonal Work

Seasonal Jobs Include Retail Workers, Tax and Vacation Season Workers

Another one of the methods for how to earn money for teenagersager is to work seasonal jobs. During the holidays, seasonal workers are needed in many areas. The fall holiday season is the busiest shopping time of the year. Employers hire extra staff to help with the higher demand from customers. For example, seasonal jobs might include retail sales, delivery drivers and merchandise stockers.

In addition, other seasonal jobs include working in the tax industry during tax season and working festivals and resorts during the summer or winter vacation season.

Side Hustle: How to Earn Money for Teenagers

Having a side hustle has become more common these days. Unfortunately, many people work a second job simply to make ends meet. But there’s no shame in working hard to get ahead. Common side hustles today include:

  • Uber/Lyft Driver
  • Food/Grocery Delivery
  • Dog Walking and Sitting
  • Babysitting
  • House Cleaning
  • Gig Economy Services (Fiverr)
  • Freelance Work Online
  • Tutoring
  • Wash and Detail Cars

Start a Business

There are Great Opportunities for Starting a Business, Including Service Industry Business, Home Based Business and Home Sales Business

Teenagers don’t usually consider starting their own business. But, one of the possible ways how to earn money for teenagers is by starting a business. There are endless opportunities for someone willing to work hard. You can start a business locally in the service industry, such as delivery, home/car repair, pet sitting/walking, babysitting, etc. None of these businesses require an office or a startup cost.

How To Make Money From Home As A TeenagerTeens can also work from a computer at home. Sell things online on Amazon, eBay, Etsy, Facebook Marketplace or other e-service platforms. They can buy and sell new or used items, even create their own brand. There are many options for selling goods online and learning how to earn money for teenagers.

Develop Good Habits and Learn Investing

Good Habits Include Budget Control, Staying the Course, Investment Knowledge and Discipline

Developing good money habits is critical on the path to making and keeping money. Many people find that making money is easy; however, holding on to the money you earn can be difficult without understanding good money habits. Once teens establish goals and a budget plan, you must implement good habits. Good habits include:

  • Budget Control
  • Staying the Course
  • Investment Knowledge
  • Strong Habits and Discipline

Budget control means that you operate under a balanced budget. Spending is controlled so that remaining cash flow is routed toward smart investments. Learning to invest now can make life easier for young people as they move into middle age.

Staying the course requires that you consistently repeat what you are doing, so long as you are successful. If something doesn’t work, it can be changed. But the power of earning from compounding interest is continuously investing money.

Being a good investor requires that you continuously educate yourself. You want to learn as much as possible about your investments. You will accrue knowledge and wisdom on different investment strategies over time.

Learning what has worked for other successful investors is the easiest and most secure strategy for success with money. Successful investors get up early each morning and focus on their goals. Investing money is a priority to them and their focus is on earning and business. Many successful people make time for self-development activities, such as exercise and meditation. And they make these habits part of their daily ritual.how to make money as a teen

Learn to Save Money Every Paycheck

Put Aside 10-15% of Your Regular Income for Investment

One of the habits that are important related to how to earn money for teenagers is learning to save some of each paycheck or from their allowance. Make it a habit to take 10-15% of money earned and save it. After a short time, you will realize that you don’t even miss the money.

Make saving 10-15% of each paycheck easy by setting up an automatic money transfer to their savings account. For example, each time their paycheck is deposited into the checking account, have an automatic transfer set up that moves money into the savings account. Some people find it helpful to have a savings account that is in a different bank. This reduces the temptation to spend savings.

Saving a small portion of your regular earnings is far from a new concept. Financially successful people have been doing it for hundreds or thousands of years. Saving can be a great tool when it comes to how to earn money for teenagers. Read The Richest Man in Babylon to learn more.

Teens Should Learn to Live Below Their Means

Reduce Bad Habits like Eating Out, New cars and Designer Clothing

It is important to form good money habits when searching for how to earn money for teenagers. In many cases, frugal living is the cornerstone of financial success. This simply means spending less than you make. A simple monthly budget can assist you in determining whether you are meeting your goal. And these good habits can carry forward for a lifetime.

Unfortunately, living frugally is not popular in the 21st century. Popular culture dictates what “normal” consumer behavior looks like. And it’s considered normal to go out and spend money at restaurants, on vacations and the like. In addition, it’s “normal” to buy a big house and drive a new car.

Financially successful people don’t ascribe to normal behaviors. People with the millionaire mindset only purchase what is needed. They don’t buy new cars or fancy things. As a result, the extra money saved from this frugal behavior is put to work in investments.

Budgeting

Budgeting Can Help Teens by Creating Good Habits, Learning to Save and Becoming Organized

One of the critical ways how to earn money for teenagers is by learning how to budget. When you don’t use a budget, money that you earn simply disappears. Budgeting is one of the critical steps that can help teens take control of their life and get ahead. In the process of taking control, we also prepare ourselves for better quality of life by having more money. Having more money means that you have more power to dictate the kind of life you want.retirement planning blog

How Budgeting Can Help Teens:

  • Improve your credit score
  • Learn to save money
  • Learn investing
  • Stop wasting money and curb bad habits
  • Obtain financial freedom

Create a Budget

Budgeting Creates Positive Habits, Helps with Tracking Money and Teaches How to Balance Budgets

One of the best ways to start saving money is for teens to learn to budget. That is, it’s important to keep track of your money. And a budget helps you achieve that objective. In addition, budgeting on a monthly basis creates positive habits for teens.

Having a balanced budget means spending less of your paycheck. Preferably, you will have a significant amount of money left over to pay off debt and save for investing. In short, everyone should budget, whether you are a large corporation or just one person.

There are many things to consider when starting a budget. Need help with budgeting? Read more about budgeting in “10 Things to Know before Starting a Budget.

Beware of Credit Cards and Debt

Credit Cards Can Create Painful Financial Lessons for Teens by Overspending and Interest

One dangerous lesson to learn related to how to earn money for teenagers is overspending on credit cards. In the modern era, gaining access to credit is far too easy, even for teens. Earning money can be easy. However, if you borrow money by using a credit card, it must be paid back. This can cause teens to feel defeated when they work hard but spend their money on credit card payments.

Having a credit card can be a double-edged sword for young people. First, using a credit card can be a learning tool about how debt works. In addition, teens can learn about paying bills each month. However, there’s a risk that comes with credit: overspending. When teens spend money than is allowed on the credit card, or spend more than can be paid back, it can be a painful lesson in finance.

If a teen makes a mistake with a credit card, or overdrafts an account, it can become a learning tool. Use the situation as an opportunity to discuss personal finance and answer questions for teens. Teens can learn the lesson of debt and compounding interest when they must pay back what was borrowed.second chance banks near me

Teach Teens About Banking

Once your teen has demonstrated that they are serious about money, opening a bank account for them may be an option. Having a bank account will teach them responsibility with money. They will need to learn how to balance a checkbook and know not to overdraft the account.

Learn About Credit Scores

During a teen’s journey to become intelligent about money, it’s important that credit scores are tracked. In fact, teens do not have a credit score yet, so opening a financial account or borrowing a small amount of money will be a way for them to establish a credit history.

In addition, now is an important time to discuss the threats that exist regarding credit fraud and theft. Teens will learn that you must monitor your credit for errors and for fraud. Furthermore, establishing a good credit score can make larger purchases possible, such as cars and houses. There are a number of companies that can help with credit monitoring.

Establish Your Financial Goals

Before your teen starts budgeting, it’s important to know what your goals to establish. For teenagers, knowing what you are working toward makes it clear in your mind. Budgeting can be a great personal sacrifice but when teens have their goal in sight, things are made easier. For example, if a teen is saving money for a car, they become clear about what they are working toward.

Final Thoughts on How to Earn Money for Teenagers

Teaching teens about money is something that can pay dividends for them later in life. And clearly there are many methods for how to earn money for teenagers. Unfortunately, personal finance lessons such as budgeting and saving are not taught at most schools. It’s up to parents and family to help young people become more financially responsible. Finally, as teens learn money management, budgeting and financial planning they are better prepared for a successful future.

Read More:

Why Saving Money is Important

10 Things to Know Before Starting a Budget

How Much Savings You Should Have at 40

Ways to Save Money on a Tight Budget

Best Budget Planner

Best Bank for Small Business Checking Account

Disclaimer: It is important to note that Piggy Bank Coins does not provide financial advice. We do not endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.

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Real Estate

What Do You Need To Wholesale Real Estate?

Many new investors wholesale real estate properties without ever leaving their home. Using only a smart phone, a tablet and some determination, profitable real estate wholesale deals are made every day in America. We will discuss what do you need to wholesale real estate, the tools you need to get started and how wholesaling works. In addition, we will talk about real estate as an investment and how to get started buying and profiting from real estate.

What is Wholesaling?

Real estate wholesaling [is when]… the wholesaler contracts a home, usually one that is distressed, with a seller, shops that home around to potential buyers, and then assigns the contract to one of them. Instead of purchasing a home and selling it, a wholesaler contracts it with the seller and finds a party interested in buying the property. The goal in real estate wholesaling is to sell the home to an interested party before the contract with the original homeowner closes. – Investopedia

budget planner for beginnersIn order to learn more about what do you need to wholesale real estate, we must know who the wholesaler is. The wholesaler is the person who makes the deal. A real estate wholesaler looks for underpriced properties. Once the wholesaler finds a property, he or she contracts with the seller to buy it. Then the wholesaler finds a buyer for the property at a profit. The wholesaler then contracts with the buyer to complete the deal.

What Do You Need to Wholesale Real Estate?

The virus pandemic that struck the world in early 2020 changed everything. Students can attend school virtually from their home. Businesses around the world conduct meetings from their living rooms. In addition, many other businesses are no finding that virtual work is not only possible, but it is also efficient and good for everyone involved. Virtual wholesaling real estate is an example of a business that can be conducted 100% from home.

Historically, wholesaling has been conducted primarily by phone. Wholesalers would find a deal by driving around a neighborhood or by going door-to-door. The deals were conducted by phone and email. Then, a closing date was arranged. However, in 2021, most businesses can now conduct business 100% virtually. Many tools and software have come to the forefront for use in virtual businesses. For example, virtual conferencing software such as Microsoft Teams and Zoom have made virtual meetings relatively easy and cheap.

Although there are many tools, such as software, to conduct a wholesaling business, you can start with just a cell phone. Simply making the right contacts using lists of potential real estate sellers can be a good start to wholesaling in real estate. In truth, much of the wholesaler’s time is spent calling potential sellers and buyers.

Virtual Technology Used by Wholesalers:

  • Virtual Meeting Software: Zoom, MS Teams, etc.
  • Mobile Tools for Tours/Communication: Apple Facetime, Google Duo, etc.
  • Virtual Signature Software (Ex.- DocuSign)
  • Note Taking Software (Ex.- One Note)
  • Virtual Scheduling/Calendars: Google Calendar, MS Outlook
  • Social Media for Sharing: Instagram, Twitter, FB, etc.
  • Plus, Endless Apps available for communicating, sharing, invoicing, etc.…

The advantage of learning about virtual wholesaling real estate is that it requires little or no money up front and can be done from your home. Moreover, the wholesaler simply contracts with the seller with no money up front. An no money changes hands between the wholesaler and the seller. In addition, many wholesale contracts have clauses or caveats that allow the wholesaler to walk away from the deal if it doesn’t work out.Millennial Money Management

In a way, determining what do you need to wholesale real estate simply means that the person making the deal is an agent. The agent is independent of any realtor or broker requirements. In fact, real estate wholesaling doesn’t require any training or credentials. Anyone can be a real estate wholesaler.

Example: What Do You Need to Wholesale Real Estate?

Person A has a property that he owns that he has been unable to sell. The property needs some improvement and Person A is unable to complete the improvements. Person B, the wholesaler, contacts Person A and makes him a cash offer to buy the property. Person A agrees to the offer of $50,000. Although the wholesaler (Person B) doesn’t have any money, he locks the property up in a contract with Person A. Person B then begins contacting potential investors and eventually finds a buyer (Person C) at a price of $65,000. Person B (the wholesaler) then assigns the existing contract to Person C. The wholesaler then nets a profit of $15,000 after the deal closes.

In this example, all that is needed is a phone (and potentially a laptop computer or tablet) to get the deal done. One thing to remember is that wholesaling deals are usually done by phone and email. Once an agreement is made by telephone or email, you will be exchanging signed documents with the parties involved prior to closing the deal.

The Challenges of What do you need to wholesale real estate

Executing Virtual Wholesaling Real Estate Can Be Hard Work, Time Consuming and Frustrating

Finding candidate properties for virtual wholesaling real estate can be frustrating. Getting leads and determining what do you need to wholesale real estate can require significant work, time investment and sales skills. Wholesalers can spend much of their time on the phone trying to make deals. You have to be prepared for getting doors slammed in your face, much like a telemarketer would.

Second, you need to understand a little bit about contracting law and real estate sales. You will be responsible for creating contracts between yourself and potential buyers and sellers. You will also be dealing directly with title companies.

Finally, there may be virtual wholesaling real estate that you contract that does not work out. After spending hours or days preparing a deal, writing up contracts and traveling back and forth to complete the deal, it may fall through. Sometimes investors get cold feet, buyers change their mind or other issues come up.

Other Real Estate Investing Options

Passive Income and Long-Term IncomeOption Trading for DummiesEarning income in ways that very little or even no effort to maintain is called passive income. Moreover, with passive income, you earn money while you sleep or vacation. Although this idea may sound impossible, it is a secret that millionaires and billionaires have utilized for hundreds of years to become wealthy.

Common examples of passive income include owning commercial real estate investing rental properties. Of course, there are other examples of passive income, like stock dividends, high-yield savings accounts, annuities, and real estate investment trusts (REITs) as well.

Unfortunately, although passive income may seem like easy money, it is not. Generating passive income requires upfront work that lays the groundwork for future income. It is not a get-rich-quick scheme. In addition, it may require some additional work as you move forward. For example, if you own a commercial rent property, you will be required to pay for property maintenance, improvements, taxes and insurance on your investment.

Long Term Investment Income (Portfolio Income)

Portfolio Income from long term investments is earned is made by capital gains. Assets can be examples of portfolio income. For example, if you own stocks, bonds, property, etc., you have portfolio income. When you sell your assets, hopefully they have increased in value while you held them. As a result, during the sale you incur capital gains.

For example, let’s say you bought $1,000 worth of stock in 2018. Now, in 2020, you decide it’s time to sell the stock. The stock is now worth $1,500 in the market. When you sell the stock, you will realize a $500 capital gain or profit ($1,500-$1,000 = $500). Capital gains from assets like stocks and bonds are how Wall Street traders make money.

Commercial real estate investing can also become portfolio income. Even if you own a commercial property for which you collect rent, you can still realize capital gains as well. For example, if you decide to sell your commercial real estate investment, you may profit from the sale (assuming the property is sold for more than you paid for it).

Real Estate Investment Trusts (REITs)

A REIT is a Simple Investment Like a Stock that Requires Less Capital and Less Risk

A REIT, or real estate investment trust, is a company that owns and manages real estate assets. REITs take advantage of special tax savings, allowing them to incur minimal corporate income tax. In addition, a REIT pays dividends, a type of passive income for commercial real estate investors. Historically, many REITs have paid increasing dividends each year, which means your passive income stream might grow with little effort.Wealth Management StrategiesHowever, with any investment comes risk. Some REITs are inherently riskier than others. For example, a REIT fund that contains a large number of commercial real estate investing assets will be less risky than owning one REIT stock with less diversification.  In addition, determining which REITs to invest in can require significant time for a business analysis of each business’ records.

Another risk with REITs is reduced dividend income. Historically, during economic downturns such as the real estate market crash of 2008, REITs lose significant value. When this occurs, dividend income can be slashed or removed completely.

Rental Properties

Never before has investing in real estate been easier. Today, anyone can purchase investment houses for generating passive income. In addition, you can use the “BRRRR” method to leverage multiple properties so that larger passive incomes are generated from your investment houses.

You are probably wondering how the big real estate investors acquire so many properties in just a few years. Well, the secret to buying more investment houses in real estate is using the “BRRRR” strategy. So, what is BRRRR and how will it help in buying more investment houses?

The BRRRR Real Estate Strategy for Rental Properties

BRRRR stand for buy, rehab, rent, refinance and repeat. The BRRRR investment strategy has worked for many successful real estate investors. It allows you to build a portfolio of investment houses quickly. In addition, it requires using less personal capital. Let’s breakdown this step-wise process to understand the details and the order of this strategy. See our article called “Investment Houses” for more information.

Getting Started with Investment Real Estate

Buy Where There is Growth and Population Movement – The South and West United States

One rule that smart real estate investors use is to buy properties where populations are growing. Population growth and population movement tend to drive prices up in real estate markets. Basic economics tells us that when there are more people demanding housing, supply cannot keep up with demand. As a result, prices go up, which is good for landlords.

For many years, there has been growth in the South and Western United States. For example, a United States Census Bureau 2019 Article states that of the 15 cities in the US with the most growth, eight of them were in the South, six were in the West and one in the Midwest. Popular cities include places like Phoenix, Arizona, San Antonio, Texas and Jacksonville, Florida.

Wrap Up: What Do You Need to Wholesale Real Estate?

Hopefully this article has helped you understand what do you need to wholesale real estate. The person beginner wholesaler is simply a salesperson who contracts property and connects buyers and sellers. It can be a great way to earn money while investing little of your own cash. However, it is also time consuming, frustrating and requires some knowledge and patience.

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Disclaimer:

It is important to note that Piggy Bank Coins does not provide financial advice. We don’t endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, in order to help you make the best choice for you.