Dive into the world of financial freedom with our dynamic audio lesson on Cash Flow and Passive Income, focusing on Real Estate. Uncover the secrets of cash flow in real estate and discover why it’s hailed as a passive investment. Gain insights into building a robust financial portfolio and learn strategies to achieve sustainable wealth.
Welcome to the next lesson.
Cashflow And Passive Income.
So as mentioned in the prior lesson, real estate pays owners in a number of different ways. One of them being cash flow. Cashflow is simply the property that you’re putting in your pocket at the end of every month or the end of every year that you’ve cleared from a property or a business or an investment after you’ve paid all of your expenses. So the expenses associated with owning the property, operating the property, as well as any mortgage or debt that you might have. Whatever you’re left over with that’s cashflow and cashflow from real estate investing is also referred to as passive income. And the reason it is is because it often requires little or no continuous involvement, once you’ve got your systems set up in place.
And so, again, as a definition, passive income refers to money earned with little to no active effort or continuous involvement. So, unlike traditional forms of income that require constant work, like a job, passive income streams continue to generate money even when you’re not actively working. It’s also called mailbox money.
And passive income can be derived from a number of different sources. Such as investments, real estate, royalties, and businesses, where someone may have invested time, money, or effort to set up and establish that income stream. I think the key idea to take away behind passive income is that it’s designed to create a more hands-free approach to earning money, which allows you to enjoy more freedom and flexibility in how you spend your time while still generating income. So with real estate, the income from a tax perspective is often considered passive income, and definitely chat with your tax professional about the differences between passive income and active income. But with real estate is often considered passive. And there are caveats, that are going to be outside the scope of this particular lesson, but we are going to get into it in the short-term rental section.
However, do not let the term passive income fool you, and to think of that real estate investing is a 100 percent passive business. It often turns into a very passive business, but there can be a lot of legwork upfront, which is what the MyFi Academy is designed to help you with. How to do the legwork, how to set up your systems such so that if you decide that you want it to be a passive business and generate passive income, that’s absolutely possible.
So that being said for the person who wants the truly passive investment from day one with exposure to real estate. That does exist. And we’re going to be covering that in a subsequent lesson. But for now, just remember that real estate can provide you with passive income if you set up the proper systems. But in the beginning, there’s likely going to be a lot of legwork involved, but don’t worry if that sounds scary. That’s what this course and this academy is designed to help you do.
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