See how to use “The Black Box” investing strategies the ultra-wealthy use To Make Millions.
Look at the investment portfolios of the world’s most successful people and almost all of them have one thing in common: Passive income investment. But creating a passive income investment isn’t an easy thing to do. What are the steps to creating passive income? Where do you start? Especially when you don’t have much money to begin with.
More from The Elevation Group CEO and investment expert Brian Fouts on the steps to creating passive income:
Hey, Brian Fouts with the Elevation Group once again, and in this video, we can talk about the third source of income because before, if you caught the previous two videos, we're talking about the three sources of income that you have to understand in order to build that wealthy lifestyle that you deserve.
And so when I first learned about these three sources of income, it really changed my mindset around money and trading time for money because the first source of income is active income. Active income is typically generated through employment, you're trading time for money or you're actively involved in producing that source of income. And if you stop doing that, guess what happens? No more income. Unfortunately, most people spend 90 to 99 percent of their time, their working life, only involved in generating an active income. Then they take 10 percent or 15 percent of that income and they put it into their portfolio, which could be something as simple as a 401k. It's assets that you want to get a return on, but they don't generate an income until you sell the assets. If you want to generate income off those assets you’ll have to sell them. And because of this, portfolio income is actually a shrinking asset. Once you sell it off, it gets smaller and smaller in value. And of course, you have to deal with the volatility of the markets. If you have a crash, you might lose your portfolio or a chunk of it and you're still taking money out for that.
So once again, people put most of their focus on their active income. They take a portion of it and they passively put it into some sort of portfolio investment. But they don't really manage these assets and they certainly don’t maximize them. So what is the third source of income, though, that you want to be aware of? Well, of course, we know what this one is. It's passive income, right?
We all love the idea of having passive income. Put simply, passive income is generated when you have assets that provide, but these assets don’t diminish like portfolio income can. Unlike portfolio income where you sell the asset, passive income assets like real estate, a business or an investment remain intact. Passive income assets actually provide you with a higher net worth because these assets, of course, carry value on the open market. So that is passive income.
Now, where do we all want to end up? We all want to end up with passive income through assets. That's what we all want to have, right? We love that. Unfortunately, most people want to jump forward to this point without maximizing their active income and portfolio income streams. I hear this a lot, “Hey, Brian, I want to create passive income, but I have no money to invest. What do I invest in?”
Well, you have to actually do the work up front. We all know that generating passive income is the key to true wealth, but few people are willing to follow through on the steps to creating passive income.
So here's the thing: To generate passive income, you have to do the work up front. You have to create the income to acquire assets that will generate passive income. So, if you think about it, the term passive is kind of a misnomer right there. So what I learned is that it’s absolutely essential to first maximize your active income and get as much control over that income as you can. So if you're an employee, become self-employed, if you work for a business, become a business owner. Be the person in control of your active income and then maximize it so that you can put it to work as portfolio income or passive income. That's what allows you to do this, right? You do the work up front in order to acquire these sources of income, because when you understand this and to focus on these ones down here, it will change your life. I guarantee it, because once again, if you're focusing all your time generating active income, start to shift your focus and energy into learning passive income techniques and learning how to maximize your portfolio. But make sure you understand how these ones work and that starts with active income.
Start with your mindset and knowledge. So that's what we do here. Basically, by the way, we love passive income, but I also love to maximize the active one as well so that you can actually build this one right there. So if you want to follow us here at The Elevation Group and join us on the inside, go to theelevationgroup.com or click the link below and join us there and I'll see you on the inside. Take care.
We’ve put together a free online training we’re calling “How To Use The Black Box Investing Secrets of the Super Rich”. This free online training condenses a decade of intense research into the banking habits of the super-rich, down to 3 “Black Box” secrets the super-wealthy don’t want the rest to know.