Residual income - how to become financially independent
According to the research, a stable financialposition and availability of free resources are among the vital priorities of the majority of the inhabitants of the planet, regardless of their nationality and citizenship. And the question "how quickly to earn" is traditionally included in the number of the most frequent queries in search engines.
Let's figure out how you can actually increase your income and form the basis of financial independence.
We receive income from four main activities:
1) Work for others (wage labor).
2) Working for yourself (private entrepreneurship).
3) Building your own business with hired employees.
According to the types of activity, the income is:
1) Linear (active income - the means are earned by own labor).
2) Residual (passive income - once performed work again and again brings money).
The most desirable is residual income, since it is he who frees up from routine work and brings coveted financial independence. Such income brings:
- the property;
Residual income from real estate
Known expert on financial matters RobertKiyosaki priority is to invest in the purchase of residential and non-residential real estate. In Western countries, where mortgage rates are much lower, it is very advantageous to purchase square meters on credit, take them out and gradually pay off mortgages. Over time, such investments can bring a net income. However, in our country in calculating a huge interest rate, the principle "one apartment is for me, and two for a bank" is clearly traced. In such conditions, it is advantageous only to buy the area immediately for cash, without bank lending. And if you got square meters by inheritance - then consider that you are very lucky. Sell them only in the most extreme case. After all, according to the most conservative estimates, even if the market value of housing does not increase, the income from own property is approximately 8-10% per annum, which, you will agree, is quite good.
Pros: minimal risks of depreciation of assets, stable income.
Cons: the need to invest in large funds is one-off.
Residual income from investing
You can now invest free funds ina lot of financial instruments: stocks, futures, precious metals, mutual funds, etc. Information on this issue has already written a whole sea. Here to understand this sea and not to lose money is much more difficult. The most reliable way is to work with a personal financial adviser who can work out a plan for you. You will clearly know how much money to invest monthly, what to buy, what percentage of the risk and profitability you will get.
Yes, any financial risks bear the possibilitylosses by the investor of their funds. But this percentage can be fully regulated. For example, if you entrust your money to the management of any fund or private trader, then sign a contract in which the risks will be clearly stipulated. Most often, losses will be limited to 15-20% of the invested funds. But you can always agree on individual conditions.
Most often there is a direct dependence: the higher the risk - the higher the yield. But in any case, you can not invest in financial markets those funds that you can not lose without compromising your standard of living. That is, selling an apartment, borrow money or on credit for investment is absolutely impossible.
Now everything is becoming more popularinvesting: playing in stock markets, futures, options, forex. So you can really earn, but you need to remember that this is a job, not a game of luck. Here you need special knowledge, experience and skills - just like in any other professional activity. Therefore, it will be safer to develop a plan for uniform monthly investments in precious metals and purchase of stable, serious shares. In the long term, this will bring a flattened flat income, which will be higher than the interest from bank deposits.
Pros: a small initial capital.
Cons: high risks of loss of funds, the need for special knowledge and skills.
Residual income from marketing
This includes all activities thatinvolve conducting preliminary marketing research: infobusiness, creation of sites and blogs, franchising, MLM, etc. The bottom line is that you will need to prepare your business proposal or business product needed by a certain audience and build a management network that will require minimal participation from your side. Otherwise, such a business will bring only linear income, that is, to demand from you an indispensable personal participation.
Of course, the creation of such projects will require a large share of creativity and fresh approaches to the market.
Pros: the possibility of developing many new projects.
Cons: the need to process a large amount of information, continuous monitoring of the situation in the market of supply and demand.
Creating a source of passive income is a matter,certainly, labor-intensive. And then it will be necessary to support it from time to time: real estate to repair and deal with lease issues, follow the courses of precious metals and shares, maintain a website, update and improve infoproducts, etc. But in practice it is an interesting process that gives a huge impetus to personal growth and opens real opportunities for your own financial independence.