So which is best, and why? Let's look at how much money
you'd need to invest to get a return that could be used to pay the mortgage, the
car payments, or even better, a big enough return that would enable you
to quit the day job.
Look at this chart to see how much money you'd need to get the return
you need: example, you would need to have $240,000 in the bank to get a
return of $800 per month assuming an Interest rate of 4%...
$800 Per Month
$2,000 Per Month
$5,000 Per Month
$10,000 Per Month
Interest Rate
Amount in Bank
Interest Rate
Amount in Bank
Interest Rate
Amount in Bank
Interest Rate
Amount in Bank
2%
$480,000
2%
$1,200,000
2%
$3,000,000
2%
$6,000,000
3
320,000
3
800,000
3
2,000,000
3
4,000,000
4
240,000
4
600,000
4
1,500,000
4
3,000,000
5
192,000
5
480,000
5
1,200,000
5
2,400,000
6
160,000
6
400,000
6
1,000,000
6
2,000,000
7
137,143
7
342,957
7
857,143
7
1,174,285
8
120,000
8
300,000
8
750,000
8
1,500,000
9
106,667
9
266,667
9
666,668
9
1,333,335
10
96,000
10
240,000
10
600,000
10
1,200,000
Now let's compare using your Time. First and most important is
that you're not risking your money, and you're not at the whim of the
economy causing interest rates to drop, or the company to fail.
So what do we mean by 'using your time'?
Using your
time to build a network, so that you
can then leverage that network, is a well proven way to build a Residual Income.
It's true of course that once you've created a sizable Residual Income, you'll
use some of that income to produce even more income by
investing in property, precious metals, or shares, etc. And most likely
you'll give back to society in some way.
Time is something we all have; we just have to prioritize it. Everyone
can find the time to do something they really want to do, and
prioritizing your time to build a Residual Income, whether it's
to prepare for retirement, or to regain control and have a quality of
life, is undoubtedly worth doing.
Why
you absolutely have to leverage your
time!
What is
leverage? Leverage is what makes people like Richard Branson of Virgin
fame, Bill Gates of Microsoft, and many others, so financially
advantaged. And it works like this:
Lets take
Microsoft as an example. The company employs an estimated 25,000
employees.
Multiply that by 40 hours per week for each employee,
and you will get an answer of
1-million-hours.
So Bill Gates is being paid on the productivity of
25,000 employees equaling 1-million-hours!
Now
compare this to the hours that you work as an employee; if you work full
time you might manage 80,000 hours in your entire lifetime! Do a quick
calculation and you will see that Mr. Gates is being paid on the efforts
of 12:5 employee lifetimes - each week!.
Now you
see how the rich get rich; they are leveraging on other people's time, and the
system works right down to the the smallest company.
The good
news is that you can do the same,
but in a way that also gives everyone
in your team the power to do the same.
As an
example, let's assume that you have only 100 people in your team, and
they're each averaging 5 hours per week in building their business. You
now have a leverage of 500 hours per week, plus your own hours.
I won't
labor the point as I'm sure you can now see why leveraging is the key to
long term financial success.
So what is Residual income, and why is it a necessity?
Anyone with a job is earning Linear income, which means that they
get paid for how much work they do, no work equals no pay. No job, no
pay! But residual income, once built, will see you getting paid
whether you're asleep, on vacation, or enjoying leisure time with family
and friends.
Another very important advantage of owning your own
business is the Tax Advantages - See this video, then your accountant.
The Remarkable Tax
Benefits of Owning a Home Business.
The video is obviously targeting for the USA, but
most governments encourage small businesses.
Check with your local accountant how to save
taxes where you live. Makes starting your own home business a necessity.
