Wisdom of Rich Dad

Andrew Carnegie once said “Ninety percent of all millionaires become so through owning real estate.”

I am not sure how accurate that statistic is, but there does appear to be some truth in that statement and it does capture my attention, as I am sure it has many others looking to enter the real estate game as a means of wealth creation.

Perhaps you’re considering buying your first rental property as an investment. You’ve read books by Donald Trump and Robert Kiyosaki, attended a few seminars, and are now ready to take the plunge. Or perhaps you’re the seasoned investor looking to diversify your portfolio or leverage the equity on an existing home. Either way here are a few things to consider.

Eligible properties:

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Reason #1:

Robert Kiyosaki’s books saved me from a life of struggle during my retirement age. His message was that you have to have passive income from either a business or an investment. I had a business at the time (sole proprietor, not really a business) and thought okay now I need to invest in real estate like Robert Kiyosaki. That was a life changing decision.

Everything he said made sense. Buy property based on cash flow not on appreciation. I started reading everything I could on real estate investing and decided a condo or small single family home make sense as investments.

Reason #2

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When I started investing in real estate in 2001 I had two main objectives: get my money working hard for me so I didn’t always have to work hard for my money AND create multiple streams of passive income.

Holding rental properties seemed like such a simple way to create passive income. Buy a house, put a tenant in there, and collect rent. Easy as making a pie. Or so I thought.

And, you know what? It actually is pretty simple. And it’s definitely enabled myself and my husband Dave to enjoy a lot more freedom than any job ever could. We are making money from our properties each and every month and each property grows our wealth a little (and sometimes a lot) each year. Once upon a time we would have said we are earning thousands of dollars each month in passive income, but we no longer do.

The problem with pursuing “passive income” is that you’re telling yourself you don’t have to do any work to make that money.

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Before we proceed to the list of passive income ideas, let us have a look at the definition and meaning of passive income. The income that is gained by a specified amount of investment without employing too much personal effort, is termed as a passive income. This kind of income is generated by devoting less amount of time and energy for the activity. Many employed people conduct such activities of financial benefit, while still doing their current jobs.

In order to start such an inward cash flow, you may refer to some interesting passive income sources. It must be noted that the economic term residual income is synonymous to passive income. However, before we proceed to examples of passive income opportunities, let us first understand the advantages of such an income flow.
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Another method that people of varying economic means use to build wealth is to invest in real estate. Owning and managing real estate is like running a small business. You need to satisfy customers (tenants), manage your costs, keep an eye on the competition, and so on. Some methods of real estate investing require more time than others, but many are proven ways to build wealth.

John, who works for a city government, and his wife, Linda, a computer analyst, have built several million dollars in investment real estate equity (the difference between the property’s market value and debts owed) over the past three decades. “Our parents owned rental property, and we could see what it could do for you by providing income and building wealth,” says John.

Investing in real estate also appealed to John and Linda because they didn’t know anything about the stock market, so they wanted to stay away from it. The idea of leverage — making money with borrowed money — on real estate also appealed to them. John and Linda bought their first property, a duplex, when their combined income was $20,000 per year.

Every time they moved to a new home, they kept the prior one and converted it to a rental. Now in their 50s, John and Linda own seven pieces of investment real estate and are multimillionaires. “It’s like a second retirement, having thousands in monthly income from the real estate,” says John.

John readily admits that rental real estate has its hassles. “We haven’t enjoyed getting calls in the middle of the night, but now we have a property manager who can help with this when we’re not available. It’s also sometimes a pain finding new tenants,” he says. Overall, John and Linda figure that they’ve been well rewarded for the time they spent and the money they invested. The income from John and Linda’s rental properties allows them to live in a nicer home.

“Join our program and retire in 3 months…” yeah, right.

We all want to get to a place where we have ongoing, hands-off income that continues without us having to work for it. These ads play into that desire by offering us the promise of “easy continuing income.”

The reality is often far from the sales pitch.

The first step in developing an ongoing, passive income is to dispel some of the myths surrounding the sales hype.

Here are some of the most common myths about creating a passive, ongoing online income:

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