“In Serving One Another, We Become Free” – Engraved in the Center of the Round Table, belonging to, King Arthur and his Knights
People at Work
There are Three Strategies of Earning Money
- People trading their time for money is the most common strategy people use to earn money. The problem is a person’s time is limited by the number of hours in a day.
- Money at work is the second most popular strategy people use to earn money. It’s limited by the amount of money you can invest.
- Micro-businesses and/or systems at work are the least popular way people earn money. They could also be a form of people at work but without the time limit, making earning potential unlimited, multiplying your time and building multiple sources of income. If I could build a self-service automated website or system that provides a service or sells goods… then I can build multiple websites or systems that work, so I don’t have to.
- Other Examples:
- An author writing a book once and selling it over and over again. (Stephen King)
- A software developer creating software and selling it over and over again. (Bill Gates)
- A businessman building a business system generating continual income. (Warren Buffett)
- A restaurant worker that builds a referral system generating continual income (Stone Evans)
- A salesperson building recurring revenue streams from network marketing. (Tim Sales)
- An entrepreneur or small business owner creating something new that generates income. (Steve Jobs)
* We don’t need to be the most successful but anyone can benefit from the power of building multiple sources of income.
“You can have everything in life you want if you will just help other people get what they want.” – Zig Zigler
The power every individual has in common, and it can be tremendous, is the power of their relationships. Nurture your relationships and they will bring you wealth in so many ways. One way is businesses will pay you and your Friends or Family members for an introduction. That is the essence of referral marketing. Some call this a sphere of influence.
Everyone can learn to multiply their time and I have found Referral Marketing to be the absolute, most productive.
We start with a goal to earn $1.00 per day and absolutely anyone can do this. Refer and teach someone to duplicate what you are doing. It really doesn’t get any simpler. When they earn $1 per day, you will earn a commission of 30% in addition to what they earn. Each person that you refer and teach to earn $1.00 per day and they do it, you will earn $0.30 per day, multiplied by 365 days in a year equals $109.50 per year in commission for the life of each referral. Referrals are like Customers who are also partners in your success as you are in theirs. Treat them like living gold and silver.
1 Referral = $109.50/yr (This is a start)
10 Referrals = $1,095/yr (Good start)
100 Referrals = $10,950/yr (On your way)
1,000 Referrals = $109,500/yr (This is influencer territory)
10,000 Referrals = $1,095,000/yr (You are an influencer)
This is just one example and you can create multiple sources of income like this. They aren’t all the same size, some are bigger and some are smaller but they all have one thing in common… they all can flow into your bank account.
“Save in Silver and Gold, Own Your Land and Invest in People.”
Money at Work
Money at work is the second most popular method for people to earn money. It’s limited by the amount you can invest and accordingly takes time to build a portfolio that produces enough income to replace the need of trading your time for money. Stocks and Real Estate have long been the investments used to build a retirement plan around with silver, gold and bonds for protection against an abnormal economic fluctuation.
Silver and Gold (Money for Saving)
“Only Silver and Gold are money, the rest is credit.” Banker J.P. Morgan, in a statement correcting congress. Physical silver and gold have no counter party risk, basically nothing is owed back when physical silver and gold is purchased. Because it holds its value over long periods of time vs fiat currencies which are designed to be devalued, silver and gold are the only assets that meet the full definition of money as a store of value. Only silver and gold are money and they create a great place to save or store wealth over time, providing a protection against inflation with the true monetary definition of expanding the currency supply (Printing Money).
Loans & Interest (Spend, Lend and Borrow)
“Compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn’t, pays it.” – Mathematician Albert Einstein.
The Dollar, Euro and Yen are examples of national currencies in debt based monetary systems. All currency is lent into existence either from the Central Bank or Fractional Reserve Lending at the Commercial Bank level, with interest owed back. The interest owed back part becomes of extreme importance and why there is never enough currency in the system to pay back all the debt. Instead, what must happen is for the central bank to create more currency in partnership with the Federal or National Government, which votes on deficit spending (spending more than they receive in taxes) to get that currency in the system.
When you deposit money in a bank, invest in a money market fund or buy a bond, you will generally receive interest over the time of the deposit. Depositing currency is a form of lending too and there are risks.
- Credit Risk – Default or risk of the entity paying back the loan.
- Inflation Risk – Currency the loan is held in getting devalued, which could cause the bond price to go down or value of principal in other loans to lose purchasing power. If the inflation rate is higher than the interest rate you are receiving, you can have a negative return on investment.
- Interest Rate Risk – Losing the rate you were getting if rates go lower or higher interest rates which could cause bond prices to go down.
US Government Treasury obligations are considered the safest investment globally. They are backed by the US Taxpayer and you will receive 100% of the principal you invested back, if held to maturity.
“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” – Monetarist Milton Friedman
Land, Real Estate & Rent (Utilization)
“90% of all millionaires, do so, through owning real estate.” – Andrew Carnegie
There are many ways to invest in or get exposure to the real estate market. The focus on income-producing assets is to create and build cash flow. Real estate has historically been an investment that provides a substantial passive income stream. As with each section on this page a deep dive or even a book can be written about each. While real estate wealth may be the ultimate passive income goal, it is by no means passive, as there must always be someone managing it. Really, a hybrid between hard asset, paper asset and business asset.
Stocks & Dividends (Invest in People)
“If you don’t find a way to make money when you sleep, you will work until you die.” – Warren Buffett
Shares of stocks represent ownership of a company by the Shareholders. Dividends are distributions of profits from the Company to its Shareholders. Roughly speaking, there are about 3,800 publicly traded companies (stocks) and about half or 1,900 of them pay dividends. When a company grows and increases its profits (depending on the corporate policy) dividends generally increase too.
They say dividends don’t lie, by law, dividends must come from past or current profits and if a company management believes the company will do well in the future, it might increase the dividend rate, while the opposite is also true from a management that is not as optimistic about the future, management may decrease or cut the dividend all together.
There are some common names for companies that increase their dividends regularly. Dividend Growth Companies, Dividend Kings and Dividend Aristocrats. May be a good place to start one’s research for passive income producers.
From an overall prospective, I look at investing in stock like investing in people. How well does management, manage their employees, suppliers, consumers and shareholders. It’s a tricky balance in an ever-changing world.
A Powerful Combination
Combining a steady stream of income from multiple asset types which provide passive income from interest, dividend, rent and commission creates a powerful wealth-building system. This is just a very high level overview of some common types of passive income for anyone to begin their research and study. In the future, I will introduce some masters and guru’s that I follow within each category.
Disclaimer: As with everything in life, all investments have their own set of risks.