Buying Cash-Producing Assets--The Path To Retirement
A book that changed my life was by an author by the name of Robert Kiyosaki called Rich Dad Poor Dad. He talks about the mindset to have to get out of the Rat Race. He has games called Cash Flow 101 and Cash Flow 102 that help you get into this mindset.
So, you may
be asking, "How does a person escape the rat race?"
Some may
think it's getting an inheritance, winning the lottery, or robbing a bank. The truth is you don't need a lump sum of
money to retire. All you need is a plan
of increasing your net monthly income without the need for a job and having
more money left over at the end of each month.
I've learned
that a goal is not buying expensive cars, houses, and gambling your money on
"the next best thing." It's
just buying cash-producing assets.
Saving money
for retirement is the reason why people need to work well past 65 at a job they
hate. Each month may leave you with very
little, and you only get to save enough to retire for about 10-15 years.
Instead of
saving for retirement, a wise decision is buying cash-producing assets that can
replace and exceed your monthly income, leaving you with more money left over
at the end of the month.
Let's say
you have a job that pays $3,500 a month after taxes. You have a mortgage, a car note, and
children. After all expenses, it may
only leave you with just $500 a month.
Wouldn't it
be better to increase your cash flow so you can retire sooner? Instead of making $3,500 a month working 40+
hours a week, you could make way more than that and continue to grow your
income with more money left over each month.
Let's say
you start off making an extra $200 a month. The next year you make an
additional $400 a month. After each
passing year, you keep multiplying your monthly cash flow. In 10-15 years, you could replace your
monthly income or surpass your monthly income without having to punch into a
single time clock.
"How?"
The average
person spends their working years buying cars, a bigger house, clothes, going
on trips, etc. Wealthy people focus on
buying assets. Instead of buying a car,
they would buy an asset that pays $500 a month, such as purchasing the vehicle
with the asset's cash flow.
Let's say
you wanted to buy a car for $27,500, and the car payment would be about $502
per month. Instead of taking out a loan
for $27,500 and adding a car payment of $502 to your monthly expenses,
drastically decreasing your cash flow, you buy assets that spit out money to
cover the cost of the car. Let's say you
purchased vending machines and put them in 5 locations. Each location is spitting out a net income of
$300 per month. This means you are
making $1,500 per month by taking out a loan for $25,000. You have enough money to pay the vending
machines' debt and enough income left over to buy your $27,500 car.
It gets
better.
If you apply
Velocity Banking Strategies to drastically pay off the debts, you could pay off
your vending machines and car note in less time than the average borrower.
By eliminating debt as quickly as possible, you can borrow money faster, which increases your wealth in a shorter period. This means you can buy more assets, buy more luxury items, and still retire earlier than the average citizen. -ConfidenceMagnet, Courtesy of Blaggenuf, 12/26/2020
Comments
Post a Comment