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Tuesday, August 31

Success = Passive Recurring Income

Success in life is a product of passive recurring income.

Let that soak in for a minute. I'm not the kind of guy who usually dishes out advice, but whenever someone asks me what I have done to get to where I am today, I always tell them: passive recurring income.

Every month my 6 rental properties bring in $4,136. Sure, I have obligations such as mortgages, insurance and taxes that I pay out of that, but I use much of what's left to do with as I please (right now "as I please" has been "paying off debt", but still...).

Passive recurring income is the type of income that arrives with minimal effort and on a regular cycle. It includes rent, dividends, interest and any other inflow that is on auto-pilot. I think it is Ben Franklin who called compound interest the "eighth wonder of the world". Passive recurring income is a close cousin to compound interest.

If you always live below your means, meaning you spend less than you earn on a consistent basis, you will have money you can put to work. Deploy that money towards investments that earn you passive recurring income. It becomes a snowball of more money, until eventually you reach financial independence, which is the point in your life when you no longer have to worry about making ends meet.

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