In November, I was in San Diego to attend a Magnify Your Wealth Seminar and after the second-day session was over, Aaron Young the host took about 50 of us out on the bay late in the afternoon. I snapped this picture of the sea lions contemplating their financial future. They don’t seem to have a worry in the world.
The new tax law is pending and you will find all sorts of changes that will affect us starting the beginning of 2018. One unfortunate part of the bill does away with any further contributions to the ESA (education savings account) also known as the Coverdale education fund. What it did was allow you to put $2,000 a year of after-tax income into the fund to grow tax-free. It also allowed for this to be handed down to other generations.
I know of people put in $2,000 in 5 years ago and it grew to the point of paying their child’s education and still have money left over. And it was tax-free money.
Like the guys above many people were asleep at the switch and did not know this existed or new it and did nothing. Procrastinators seem to travel in bunches. And they are like the herd and follow one another.
Passive income is a great vehicle for providing financial freedom. Sometimes referred to as mailbox money. How much additional monthly income do you need to provide you with financial freedom?
There are many ways to generate passive income and you do not have to have a lot of money.
One way is with options. I gave a farmer $900 for an option to buy 25 acres of grazing land in return for a set price which could be exercised within 12 months. Rather than exercise the option for myself I sold the option to a cattle farmer who needed additional pasture and made $10,500 as an assignment fee. Suppose you did one of these a quarter, would that make a difference in your family’s life?
You could do this with anything. Suppose you took an option on a car that you would buy at a set price and then turn around and sell it to someone else. You would make money on what is called “the spread.” The difference between what your options were at and what the price is when you sold the car for.
Options allow you to control the ownership of an item yet not have your capital tied up. In some cases, the dollar amount that you own for the option can be very small. I have done with $10.00.
The land where Disneyland stands was acquired by options. Over a period of time, Disney through options acquired all the land at a very low price. The lawyer who acquired the option did so in names other than Disney.
Passive income can make a difference in you having the freedom to many things in life. It might be taking the kids to Disneyland or helping a friend or family member who is having a tough time financially.
Like the sea lions don’t lie around doing anything. Get up and start putting an action plan together. Get the momentum started.