Passive income and the ability to live your lifestyle the way you choose. It’s simple. Change your mindset, get educated, learn how to do it right and take action.
Hey freedom fighters welcome to the active duty passive income podcast. The only place where military members, veterans and their families learn how to build wealth through real estate investing. I'm your host Mike Foster and I'm here to show you how to stop wasting your benefits. Now get off your ass, step up to the firing line and make ready for today's lesson. Shooter stand by.
Welcome to the active duty passive income podcast. What’s going on guys I'm your host Mike Foster and I am going to talk to you about the four ways of making money. okay this is going to be a little mindset episode and I really just want to break down some things that I've learned you know over my course of getting educated myself on this whole real estate thing. But really more so in general right so let's go ahead and talk the talk about this and this is actually a concept if you're familiar with the Rich Dad series and the cash flow quadrant, you'll understand what I'm talking about.
But there are four ways of making money in this world right. You can either get a job, you can start a job or start your own job right. you can start a business or you can invest and I think we get so caught up in this idea and this mindset that you know you have to go to school, have to study hard just so you can you know land a good job when you get out and this job is supposed to pay you well enough for you to live your life and you know everything is supposed to be hunky-dory right. but really it's not and it's sad because you see so many people nowadays working you know two, maybe three jobs just to you know create a living for themselves and for their family.
Maybe they live in a higher income neighborhood right or at a place where there's a higher cost of living and it's hard to sustain yourself right. I mean there's no way well I'm not going to say there's no way. But there is there are very few ways that a single mom or a single parent for that matter can sustain themselves and their family of three or four kids in New York City right with a low-paying job.
Especially if they want to you know be around and spend time with their family members. It’s virtually impossible all right. Now it is just one of those things that you that you learn that when you have a job, your time is dedicated solely to that job. Otherwise you're not going to earn any income right. I mean let's face it, I mean there are very few jobs out there that allow you to just you know take copious amounts of time of paid time off right.
So let's just be real here. If you have a job a lot of your time is going to be spent there and you're also going to be taxed a great deal from that job right. So it's almost right two ways that you have to take a look at that right. When you have your job not only are you getting paid the lowest amount possible for the amount of work that you do right. Otherwise and you know what business would pay someone hundred thousand dollars just to take out the trash every day right. So you're going to be paid the lowest amount that they can possibly pay you to do your job.
Yes you may get benefits right tacked on into there to make the job more appealing to somebody. But you're going to give you the lowest amount and you're also going to get taxed the most right from the government. so you really you got to weigh those factors and can into consideration when you have your job you're going to lose money from both fronts, from the government and from your employer right and so and again a lot of your time will be taken up towards that job. So when you have a job right you think you have less free time and you less money right. You’re getting less money from getting both those institutions that I was telling you about.
But you know everyone may think ok well you know maybe if I go become a doctor or a lawyer, start my own practice, run my own you know shop or whatever right then become self-employed maybe that'll be a little bit better. Well maybe in some regards, but you also have to understand that the stipulations are kind of the same right. If you're self-employed you don't make any money if you're not working right. If you're not out there hustling, if you're not getting yourself known, getting your practice or getting people under you and your practice to work for you or help you write you know build your brand or build whatever it is that you're working towards right and the money can be better right.
You can pay yourself more than what you would normally make if you were right and understudy in that practice or whatever right. but still all right if you're not there if you're not coaching the people or working with the people that you have under you, if you're not there actually you know running your practice then right you're not going to make any money. All right so again that time right that you have to spend on that job just takes away from your free time and again you're also taxed getting more all right then you would be if you either started your own business or invested right.
Now you'll get taxed a little bit less and there are a lot of tax breaks that you can take advantage of being self-employed. But you're still not taxed. You’re still taxed you know way more again than you when you would be if you are to start a business or invest. So if you started a business right, and you have less time that you have to spend on that job. Obviously there's a lot more time that you spend on the front end getting the business established right. Making sure that you have all the tools and the machines in place that you need or systems in place that you need.
You need to be able to study your market right. You have to understand what market you're going into and you know that takes a lot of time as well. So there's a lot of time that you have to spend on that business. but all of it’s in the front end and there's very little time that you should spend you know in the middle just because you know you bring on the team that's on board that'll help you or systems in place that'll help you whether it's automated, however it is you're running your business. Where you should be able to generate income with the least amount of time spent on that business right. That’s the goal.
So yeah I mean and the tax benefits that you get from starting a business are also great right. I mean you can depreciate your assets right and you can you know write off your expenses for that business. I mean all these things kind of go in factored in to the fact that you get less tax for less time on your business and you make more money and even better you know if you receive any losses from that, you can even deduct that tax from your personal income which is great right.
So if you have a job on the side let's say right, so starting a business is definitely a better option. But it's still not necessarily the best option and I feel the best option is to invest. You learn how to invest, you can make a lot of money and you can pay virtually no tax if you invest properly. Now understand that you can't you know you have to pay some sort of tax at some point right. It’s not like you can just you know not pay any tax at all. but when you invest properly you'll learn what things that you can pay tax on and what things you don't have to pay tax on really you know and you know you'd be surprised even when it comes to real estate right people sell their homes, their investment properties and they'll pay no tax on them throughout their life.
Why? because they continue to wrap them into other things like a 1031 exchange right and the interest that you grow off the sale on your home, you invest or you reinvest that into another property of a bigger scale and as you continue to do that over your lifestyle, you will continue to grow that interest tax free time after time until you eventually get to your death. But even still in death right people can beat that tax. Because they wrap it into a trust or they wrap it into you know this and there are so many different ways that you can do it.
Well I'm sorry let me rephrase that, there are very few ways that you can do it legally right. But once you learn those tools that are out there, it's not impossible. but again going back to the start of this podcast, you have to change your mindset right and you have to understand that there are better ways of doing things and until you go out and dig right or you do your research and understand how to do it, then you'll constantly be living this paycheck-to-paycheck lifestyle and you know blaming everyone else for your position.
It's not anyone else's fault that you are in your position. Yes some people start out more behind than others. I get that that was me. But where I am now, where my mind is now to where my mind was three years ago completely different. night and day difference and that's all because I changed my mindset, I got educated, I'm still getting educated right, I'm still learning how to do things the right way and I'm working towards my goal. I'm taking action right.
All these actual steps we heard in the podcast right with buddy rushing, income producing actions. Those are key and necessary steps to success. There’s only so much education that you can absorb. At some point you need to be able to let your feet do the educating for you. You have to take steps in order to get to your goal and you also have to take steps in order to learn. I mean you can read a text book cover-to-cover. But you'll never really understand it unless you apply what you've Learned. Just like taking a test. I can talk to someone who has read an entire textbook.
But if they've never taken a test, right if they've never answered questions from the teacher how can I really judge how much they've learned from that textbook? Sure they can, we can have a conversation on things and everyone can have their opinions based off what they've read. but if you've never been tested in what you've been learning, how can you truly say that you have grown right and just like that it applies to life, it implies to investing, it implies to making money. if all you know is working your 6 to 6 right as in the military out there or your 9 to 5 or whatever it is that you've got, then how can you accurately say that investing or starting a business or even you know being self-employed fine if you want to take that next step.
How can you say that one is good or one is bad or one is you know worse than the other. So I challenge you, I've challenged every one of you out there to actually take up a book. Rich Dad Poor Dad, that's the book I suggest you take. Read that book, if you've already read it, read it again. Because I promise you you'll learn something different than you learn the last time you read it and me also challenge you to go out and research one thing. One thing that you have misjudged or that you have falsely accused for being more difficult than it may be.
Right if you have been looking at real estate and you say man I don't want to invest in real estate, because I've heard all these horror stories. That is what I challenge you to look up. I challenge you to look up one thing about real estate investing, one positive thing right and see if that is something that would appeal to you. If it's you know getting in the stock market okay you know, I'm not a fan of the stock market. But I also invest in the stock market as well right. That is one of my many investments. I don't like the stock market because of all the ups and downs you know even though my stocks have been doing pretty decent.
I mean its still so much volatility. Where I know why tried-and-true I invest in real estate and my real estate investments have been performing time after time, month after month without fail right and I have that system that I can accurately build in place. The stock market I don't really know if that's all going to pan out for me right. You never know you know 10-20 years from now all my investments may hit a crash and then you know as I'm looking to pull it out hey you know it is what it is. But you know I mean there are better ways to invest in that too and there are so many different ways to do it.
So if that's something that you have been, did you've shot away from, then I challenge you to look that up too or if starting a business is something that you've been you're nervous about or even if you're thinking about, I challenge you to go research that right. Go out there and go learn something new and you know what I want to hear what you've learned all right. Please share that with me. If you have me on Facebook, if you can't find me find me Mike foster, if you type in Mike Foster ADPI or active duty passive income you'll find me okay.
I want to hear what you've learned and please share that with me or you know share that on our active duty passive income Facebook page, that's an even better place. Go find us okay. Share it with all of us. Because we all want to know how you guys are learning and progressing out there and we want to help right and we want to learn too. You know everyone has a different walk of life and they all have experience in different things and it takes a community to grow each other right. Just like it takes a community to raise a child, it takes a community to raise people.
It takes a community to raise a community. really in general and when we are all learning all right, we're all growing and we're all bettering from it. so yeah so go ahead and share what you've learned, we want to hear it and we'll be looking for that and I hope that you know this topic as brief as it is was least able to spark something for you and so go out and research and if you like I said if you haven't read Rich Dad Poor Dad, go read that and if you want to learn more about the cash flow quadrant, there's actually a book called the cash flow quadrant from the same guys; Rich Dad Poor Dad team.
So go check that out too all right and I'll put links to both those books in the show notes here. But you definitely need to understand that things may not be what they were explained to you as a child right. We all were fed you know certain lies about money. Because not necessarily that they were lies, but they were misunderstandings, there were misconceptions right. I love my family, I love my family to death right and they are very very educated in their own right. But making money through investing, through starting a business was not something that they knew how to do.
So no one ever really taught me that and they instilled certain things, certain fears in me about money without actually you know understanding their long-term effects. but what they did instill in me also was a questioning attitude and in that questioning attitude it was able to develop me to go out and research on my own and find out these things that you know I never knew to be true right and so that is what I challenge you to do. I challenge you to take that questioning attitude and I challenge you to go out there and change your financial destiny. Just by going out and finding out how okay.
All right all right guys, that's going to do it thanks so much for listening again and thank you so much for all the contribution that you guys are given to our team. Also if you have questions that you've been looking to get answered, we have a Q&A; session going on Facebook live at 6:30 p.m. Eastern tomorrow and so make sure you are there to check that out all right. It’s going to be hosted by our partners Eric Upchurch and Tim Kelly, they are awesome guys. They’re out there crushing it every day and they're excited to share their experience with you. Alright guys I'm out of here bye.