At some point or another, we have all had the dream of retiring young and spending the rest of our lives doing what we want.
Usually, we wake up from the dream and trudge back to our jobs in order to keep trading our time for money, day in and day out, just so we can continue in the rat race.
I think it’s time we realize there are other ways to amass wealth that allow us to make money outside of our allotted shifts.
Make Money While You Sleep
Warren Buffet once famously said, “If you don’t learn to make money while you sleep, you’ll work until you die.”
The unfortunate truth is that most people will work until they die – even the highest-paid professionals are still only making money while actively working.
While being in a stable or high-income career may appear secure, ultimately, so long as you are working for your money rather than it working for you, you are still shackled to your job in financial dependence.
Cardiologists are still only making money while they hold the scalpel.
Lawyers are still only making money when they are in the courtroom.
Pilots are still only making money when they are in the air, thousands of miles from their family.
And that’s not to mention that should you fall ill, injure yourself, or lose your job, even that money you were trading your time for is gone.
There is no contingency plan in place that allows you to continue your lifestyle making the same money you were once you lost your career.
The key to obtaining financial freedom is through securing a source of passive income – to make money without actively working for it.
Only 20% of United States households have a passive income stream, and the average amount of that income is only $4,200 per year – not exactly enough to achieve ultimate financial freedom.
While a larger number of Americans claim they have a source of passive income, you have to understand side hustles and passive income are NOT the same thing.
What's the difference between a side hustle and a passive income?
While side hustles are great ways of making some extra cash you may need, they aren’t a steady form of income – and though they may ease the strain of inflation –they don’t unshackle you from the current economic situation.
On the other hand, financial freedom is when an individual or a household has accumulated enough financial resources to cover their living expenses and maintain their current lifestyle without having to depend on an employer.
It affords you the time to pursue your passions and live the lifestyle you want – regardless of the state of the economy – without the stress of living paycheck to paycheck.
In order to achieve financial freedom if you haven’t amassed enough wealth to never need money again, however, you need to find ways of maintaining continual cash flow in the form of passive income.
Keep in mind that a side hustle is still you working for your money; a passive income is your money working for you.
So, how do you go about learning how to make money work for you?
How do we start making money in our sleep?
Retire Early to Avoid Working Until You Die
Most people’s initial instinct when thinking of Warren Buffet and building a stream of passive income is to begin investing, and they usually think of investing in the stock market.
And while this isn’t necessarily the wrong place to start, investing in stocks doesn’t guarantee you will make consistent money.
In fact, you will often lose money.
And even if you do invest in a successful stock, it is not a steady flow of income; that money only becomes yours once you sell.
Other avenues of passive income streams could include profits from a business as well as royalties from creative content or oil, though these take work and time and are also not guaranteed.
But these are imperfect forms of investment, too. Even though there is no perfect way to early retirement, the best, most secure way to begin building passive income, in my opinion, is through real estate investment.
Where to get passive income
With everything we’ve mentioned before, is it really a surprise that I’ll say the best investment you can make is in real estate?
Traditionally, investing in real estate requires two things in order to secure a property and begin making returns on your initial investment:
Money: in order to buy the property, pay taxes, insurance, and renovations if needed.
Time: finding leads, visiting properties, negotiating prices, renovations, finding tennants, etc…
By utilizing creative financing tools, such as buying houses subject to, you can cut down on the up-front costs of buying property and keep interest rates low.
If you find yourself among the hard-working few who have the funds, but not the time to begin investing in real estate, then where should you start?
The Dream Team for Passive Income and Early Retirement
If you are a doctor, lawyer, business owner–or any of the many jobs that are more demanding of your time–it might be difficult to put in the initial requirement of the time and energy necessary to begin investing in real estate.
Here is where you begin making your money work for you.
Instead of spending hours of your own time searching for the perfect property to acquire, build a team to do the leg work for you.
They don’t have to be full-time employees, either.
I would start by hiring virtual assistants.
VA's can assist with lead generation, skip tracing, comping properties, and all of the other leg work that takes time without always bearing fruit.
They are easily trained, skilled at what they do, and keep a low ceiling on costs.
Start with one VA to take some items off your plate, and assess whether or not to hire more as your business grows.
They should all be taught the same things, though once you hire a second VA, you can begin to allocate specifics to each of them to maximize their workflow.
By the time you hire a third VA, they should be doing all the work, and you should just be closing deals.
If your business grows larger than you and they can keep up with, the next person I would hire is an acquisition manager.
They can find properties on your behalf and work solely on a commission–meaning your success is their success.
Most people won’t need to build a larger team than this, but putting together even just these few individuals can mitigate the amount of time you need to spend chasing leads while maximizing the number of investments you can make.
And there are even better ways to invest in real estate that cost you almost no time.
Investing in Investors: Joining a Professional Team
The fastest, most direct way to make passive income through real estate investment is to invest in people who are already investing.
You don’t need to spend time garnering the experience necessary to learn the real estate industry and begin investments.
People who already have experience can help you get the experience you need to be profitable now.
If you want to secure a steady flow of income, but don’t have the time to get that experience or personally find property and invest in deals yourself, you can build a different kind of deal with real estate professionals who are already acquiring properties.
Members of the SubTo community are always seeking to partner with other individuals on deals in order to maximize their profits.
They want to build powerhouse teams of other professionals who bring diverse strengths to the table.
There are a number of real estate investors out there who have the skills and the time to acquire money-making properties, but don’t have the funds necessary to obtain them.
So, if you are new to real estate investment and have a job that is too demanding of your time to learn the nuances of the craft, but affords you the funds to still invest–strike deals with other investors who have both the time and the experience to intelligently invest in properties that are lucrative.
By providing financial backing for other investors, you can negotiate contracts with them that still give you a certain percentage of the profits of those properties and result in monthly cash flow.
There are thousands of real estate professionals who need partners on their deals that can provide the financial support necessary to close.
And the best part is the more deals you go in on with investors, the more you will learn about the industry while still making a steady flow of passive income.
This is by far the fastest way to make money and gain experience in the real estate industry.