Emotions vs. Business – Jerry Fetta
Investing For Passive Income
By Jerry Fetta
Investing is a hot topic right now, which makes total sense. With e-commerce, forex traders, crypto-currency, and home-based businesses being all the roar many people are looking for activities that provide a high return on the money with a low return on time. I want to discuss investing for passive income so that you can see how the top 1% have successfully done it for centuries now. I also want to discuss different types of investing and what different outcomes they create.
First, let’s establish what an investment is. My personal definition is an equity or debt asset that produces income. Anything other than that is not actually considered an investment in my book.
There are two main ways that people invest. The first is for appreciation. Appreciation “investing” is not actually investing, but more of a speculation. Appreciation is the phenomenon of buying a thing at one price, holding that thing over a period of time, and the thing going up in value, and then being sold off at a profit. Many consider appreciation to be a type of investing. The most popular version of this is with retirement accounts and primary residences. A primary residence does not produce income and is therefore considered speculation rather than investing. Why? Because it might not actually go up in value and if it does not, there is no profit to be made.
A retirement account is no different. Because the assets in the retirement account do not actually pay an income until they are withdrawn at age 59.5, there is not actually an income produced by them. One who invests in a retirement account is hoping it is worth more than what they put into it at the time of retirement. This is the essence of a retirement account and where we get the term “nest egg”. By definition, this is speculative.
The second type of investment is Income Investing. This is where you buy a thing that produces an income stream. It may or may not go up in value, but it pays you every month for the period of time you hold it. Examples of this could be dividend-paying stocks, bonds, private lending investments, income-producing real estate, and even life insurance.
Now, not all of these are equal. Some of these produce income and appreciate. Some of these produce income and depreciate. Some of these are backed by a real asset. Some of these are backed by nothing. Some of these have fees that reduce the income. Some of these do not.
In an ideal world, you would find an investment that produces income, appreciates, is backed by a real asset, and has little to no fees.
In my opinion, income is way more important than appreciation. Not losing money is way more important than the potential for gain. A real asset is better than no asset.
So when looking at an investment, you should first look at the protection of your principal. That is foremost.
Second is income. It needs to cash flow right off the bat and it needs to have been profitable for at least the past 3 years.
A third is that it needs to be backed by a real asset. In a worst case scenario, I don’t want my investment to go broke and I be left with nothing.
Most people speculate first, invest in things that cannot be seen or touched, and pay high fees in the process.
If you’re interested in learning more about investing, Wealth DynamX offers an Investors Package for you to learn more about investing, put a plan in place, and gain access to exclusive opportunities that are offered only to Wealth DynamX Clients. Click here to inquire.
Own Your Potential,
Grant Cardone Certified Coach
Jerry Fetta helps his clients build wealth so that they can eradicate poverty in their own lives and own their potential.
He believes scarcity and abundance cannot co-exist and that the way to end poverty is to help you build wealth.
You were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.
However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.
Jerry helps his clients create wealth that exchanges time and money on their behalf. The only way to do this is to make more money, keep it, and then multiply it.
He has helped clients double their income, save $100,000 tax-free, and secure 8-12% fixed annual returns on their assets.
To get started, go to www.WealthDynamX.com/contact