Ideas To Build Wealth - Grow More Passive Investment

By © Arthur, The Online Internet Home Business Opportunity 

You don't need a financial guru to tell you that your full-time paying career will not lead you to a money-worry free retirement.

Pure common sense tells you that your financial future rests in your ability to create passive streams of investment income.  One of the simplest example is the yearly cash interest you earn from your bank. These small, typically single digit sums, depending on what part of the financial cycle you are in, can look small. With a cash deposit of $1,000 at 5%, you got to wait a whole year to make $50 is nothing to throw a party over. However, we have to agree that a bank is very safe. So safe that many people never realise that a little monster called INFLATION is quietly eating up the PURCHASING VALUE yearly.

The true is that there is no such thing as completely safe. If you were to hand over your money to someone, there will always be some sort of risk, however a bank is a very safe place to put your money and getting it back at the end of the term is not going to be an issue unless there is a major financial crises such as the Asian Currency and the US sub-prime crises.

Making a deposit of $2 million into a bank at 6% is a little bit more useful. The return would be around $120,000 and this amount is passive and compoundable. After deducting tax, your lifestyle would be quite comfortable. The hard part of course for most people is getting that $2 million in the first place.

Real financial independence is really about releasing yourself from work without a corresponding drop in your current lifestyle. Anyone can resign from their full-time paying career and live on welfare (if any), as an example, but your life style would be quite appalling, and that is why we work in a job, to maintain at least a comfortable life style.

There are a numbers of known paths for developing a passive income stream of cash.  If you take the time to search the web, your brain would surely received full of money making ideas that you can make used of.

The following ways will return much better than banks and financial instruments but they require work to set up.

- The most labor and cash intensive and I would say in my opinion is the most risky, is becoming a landlord. Buying, renting or selling properties can be lucrative if enough properties are purchased, sold or rented. Unless you are cash rich, most probably, you would have ended up with large loans totaling millions of dollars for all the purchased properties.  These properties would slowly over time increase in value, generating more cash for you to buy more property. This is a well known path that had been preach by many rich guru and had been a trend recently. However, do note that there are many unpublished casualties along this path and you would need a robust nervous system to handle the stress.

- Another well known path is investment for capital gains. Again it is very hands on but the cash required are much lesser. The idea of investing for capital gains is to purchase objects with existing intrinsic value or at a margin of safety if you are purchasing stocks and shares of listed companies. The profit idea for this is that the object you intend to purchase for immediate resale would need to be priced in such a way, that the cost after all expenses in the transaction, is lower than the ultimate real worth of that object. Buying and selling investment objects in this way, one can compound ones capital very effectively. For example, if you had $100, you could start with a bicycle. Find a buyer and re-sell that bike for $140 and you have made a real fantastic 40% gain. With higher levels of investment objects, like luxury boats or diamonds or land or property, your profit margins can be quite substantial.  There are many rich people who have invested this way for capital gains quite successfully but it takes time and experience.

- The last path is to develop a small business where it is composed of systems. These systems represent a unit of value that is scalable or in other words re-produce able. If for example you had a system that runs itself, where one hour of work fairly consistently brings in 50 cents a day for a long long time, you can reproduce that leveraged unit of value to create more 50 cent hours. If you put in 1000 hours of work over a 6 month period, then of course, the passive return would be $500 per day. This type of systematized income is well-known on the net.  By creating multiple money making websites that runs on auto-pilot, you are still generating cash to your bank account even when you are not physically working.

Now, with some passive income ideas in your brain, it's time for you to take some action on it.

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