How To Build Wealth With Passive Income! - Using Assets To Buy Liabilities | The OPM Strategy
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- เผยแพร่เมื่อ 8 ก.ค. 2024
- How To Build Wealth Through Passive Income! - Using Assets To Buy Liabilities | The OPM Strategy
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Long-term strategic investing for passive income is a great way to build wealth. After all, as Warren Buffet says "if you don't find a way to make money while you sleep, you will work until you die." Today we'll share a strategy that will do exactly that, and give you some real-life examples to help envisage how you can do this in your own investment choices.
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Disclaimer:
This video is for entertainment purposes and does not constitute personal financial advice on whether to buy or sell a specific financial security. Capital is at risk, investments may decrease in value as well as increase. You may not get back all the money invested. Investment objectives may differ, and therefore investment strategy must be factored in. If in doubt, seek advice from an investment adviser regulated by the Financial Conduct Authority (FCA).
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Rich Dad Poor Dad regurgitated. Nice. The magic is when you use your first passive income source to buy another asset from that passive income, that also provides passive income, then rinse and repeat Next, diversify the wealth you've built, to protect it. Then, decide on some exercises to keep you active (because your life is changing, and you no longer have a job to pull you out and keep you engaged), and choose healthy meals and diversify both your fitness and food for best results, for overall health. Enjoy. peace and love
Golden
true, very true
Thank You ❤️
d
good job
“Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.” - Robert Kiyosaki
OPM (other people's money) typically refers to borrowing money to invest ie: leverage. What you're talking about is cash flow banking. You're using the cash flow from your income producing asset to pay for your liability.
I read the book in one day back in 2017. I recently closed on my first property, a newly built 3 unit building. I recently furnished one unit and im marketing to corporate renters.
How did you start ?
@@TyNguyen-ov1mq originally I was looking to purchase a house, but the Chicago market was so competitive I changed my approach. Plus the loan for a single family home and a multiunit of 4 or less units are the same. I got financed through a mortgage broker with no points on my mortgage and an interest rates of 2.75. Since it was a newly constructed property I plan to do an airbnb however the terms of my contract wouldn't allow it. Corporate housing was my next choice, because you can make way more than residential rental and it's less risk than airbnb.
Congratulations! Keep going 👍
Wow!
This is what I do now. My wife and I work but her entire take home pay is saved and not spent. Plus the passive income we get we could both stop working if we moved outside of the USA.
That's great! You are saving a substantial amount. Keep it up and your passive income will match and exceed what you are making in your day job today! This is fantastic to hear.
Nice man, i am happy for you
I think Mexico is nice...
Rich dad poor dad book
One of the best book I had ever read about finance, language is every simple.
I am highly recommending to read this book, u will never regrets
Absolutely!
If you want to go a level up don't buy liability and make the most of compound interest in the long run you will definitely make much much more🙌
That would be the more beneficial play in the long run financially. Sometimes we should allow ourselves to enjoy the finer things in life too!
I remember watching this vid a year ago and barely understanding anything. These days I‘m watching this and it’s as basic as it gets because I have such a deep knowledge these days. Thanks for creating such quality content!
Thanks for watching! Always great to hear of viewers progressing on your journey 👍
I’ve bought 2 houses and one lot on owner financing. I’ve asked about 6 different people about owner financing. 3 out of 5 isn’t bad. Currently, I own 4 homes, a cabin I built on 60 acres of land and 2 building lots getting ready to go for two more. It’s not easy. 10 years ago I was renting a shit apartment and barely being able to pay the $700 a month rent. Many times, I put it on Credit Cards.
You’re in a great position! Reinvesting that income into more income-generating assets will compound before you know it 👍
Very lovely and impressive effort !
if those 60 acres are on some pretty rec land in nature you could buikd a few more cabins maybe and open a nature cabin air bnb business
Can you help me get rich ?
@@JohnDoe-iv5hx Invest in cryptocurrency, is profitable.
Unless you buy a house with cash, you need to generate income for the bank (interest). Also, the income you get from rent would also go to bank, to pay the rates for the house's price. So no paying the car with the rent.
True.
I have one rental property.
It's paid off and worth almost 500k.
Rent is a long term tenant. So instead of the 2400 I could be getting. I get 2100 for it. Guys been there for for years.
The impatient investor would've already had damn near 6+ properties. But when you only have property taxes and small bills on the paid off rental. I make more than those guys with 6+ properties without the added risk of getting behind on a mortgage payment.
Lots of wisdom.Lots of people want to look wealthy at the expense of their financial freedom.I started thinking like this and instantly sold my Benz car for a smaller Toyota car and invested the difference .
That’s great! Hope your investments are already reaping rewards for you 👍
This is a great video.. smooth explanation.
I raised money from Affiliate Marketing and Network Marketing, took that money and started investing in commercial properties ever since.
Leveraged on other people's effort and built a fortune. 💯
That’s great to hear! All the best 👍
It still isn't other people's money. You're just giving up the opportunity costs by using it on a liability rather than to buy more assets.
But where is that money coming from that you could reinvest? OPM
i thought its just need "idea",,
and somebody become investor for us and we just need "a good idea"..
@@WiseWealth all money comes from other people.
@@WiseWealth - For people that don't immediately grasp this concept, there's a Spanish adage that goes like this: ¿Para qué les vas a escribir, si no saben leer?
Thank you, mate! You did a great job with this video & explaining it.
True, but using the strategy you decide what you want to spend the money on! A car, boat, another property, stocks ect. This is a little tease for ppl who don't think along these lines.
Last week I owned already 3 houses and 2 cars by reading this book.thank You
That’s great! 👍
This is a great example. The idea is something that is in the back of any investor who must find a "investment" to reach a reward and future return. Start small and grow. Growth is exponential but realistic.
Growth takes time and discipline, but those small steps will snowball over the years and you will reap the rewards in the long run! Thanks for watching.
I retired at 43 and have compound enough for my retirement through crypto investment. Had it been I knew about it earlier I would have retired at 25
@@nathancook8325 how does crypto currency works to again more cash?
I'm currently renting out my vehicles through the Turo platform . I love it! I pay nothing on my cars.
It is smart way to easily and quickly increase your portfolio of whatever asset you owe
👍
It seems so wise to acquire assets first that Will buy the liability, pay for liability expenses while still having your regular INCOME from the asset.. just a matter of prioritising INVESTMENT...
Exactly. Then it’s not coming out of your pocket. Discipline in the near term will reward you in the future. Thanks for watching!
I'm new to this whole financial education stuff but an option for your last technique to keep the workload off of the asset holder would be to hire a property manager, assuming the asset/assets are bringing you enough income after the investors return. This would bring you as close as possible to passive income.
Correct, I think I talk about that towards the end but yes you are exchanging convenience for some of your returns. Thanks
I’m considering a similar strategy in the near future. Not too fond of the idea of using your rent/passive income that goes straight to a car. Make sure you have a few months reserves for that car in the event a tenant default or decides not to renew the contract. Not to mention rental insurance.
Always have an emergency fund!
The contents of the question define somehow the concept of securitisation which in short refers to the use of assets to buy liabilities.
Yeah he said that lol
First British finance channel I've found keep the good work up
Welcome to the channel!
@@WiseWealth are you still making videos
Yes. Currently animating the next video 👊
Robert’s book really helped me
Great to hear 👍
The rent pays the mortgage, not for the car payments. You have to come up with money to maintain the house, pay taxes, insurance and times when the house isn't rented because the tenant has left.
MY FAVORITE QOUTE
Finally someone ACTUALLY EXPLAINS how to invest or have a passive income!!!! Thank you so much!!! 🤗🤗❤️ I'm subscribing
Welcome to the channel! Keep an eye out for more upcoming videos
💯Agree with top comment. Thank you for simplifying it for ppl like me. Subscribing😁👍
Thank you for the tips
No problem! Thanks for watching
I am using other people's money when I work, they give me money and I pay for the car. It's all subjective. You are still working, buy a house, fixing it up, etc, etc... IT'S ALL SUBJECTIVE. You are still working for it. If you have a job that you absolutely love doing everyday day in and day out then you are happy. If you are nit materialistic and need other people to admire you, then don't listen to this guy. Do exactly what makes you happy 😊 😊 😊 😊
Ig having to maintain these "assets" was never thought of. This all requires a crap load of years for a single man. Or in short, a soul for a small empire.
Building something bigger than ones self can give people a sense of self worth! Much like how people treat career progression in their day job.
Sounds fantastic on paper.
Glad I found this page, always people talking in terms of dollars and American laws not UK, thank you my feiend
Welcome! 👍👍
Great explanation, many thanks for the video
Thanks for watching!
Great advice I'm in Sheffield I wouldn't pay £100,000 for a car I'd buy a classic 1973 Rolls for 15-£20,000 Depreciation is all ready done still a classic great advice cheers regards from stewy Hudson and family Sheffield,England!!!
You can’t go wrong with a classic! Go for a slightly older model and you won’t have to pay any road tax! Thanks for watching, big up Sheffield!
I had to get a new air conditioner in my house for $9k. I financed the charge, and I'm covering the monthly payment selling puts with $3k capital. So far the A/C has not cost a penny of my original income.
@Jennifer McCall Thank you!
So long as you can keep winning with puts then great!
Invest in bitcoin now i invest with the help of a broker Miss Debra and i have never regretted she is the best i have worked with contact her on WhatsApp +1(760)589-6558 to learn more.
I did the same when consolidating CC debt. I took out a personal loan, paid down my high interest debt, and used the rest to buy dividend stocks and trade options.
Good educative video , I am starting to use the OPM strategy.
Thank you! Great to hear you are using this strategy.
Thank you for this 💕💖💗❤️👍😍
Thanks for watching!
Wow! Thanks for this very simple way of making us understand how to do this.. thanks a lot!
I'm glad you found it helpful. Thanks for watching!
Love this
Thank you! 👍
Very resourceful.
Thanks for watching!
Thank you
👍
A Business is also an asset, a different type of asset class. 4 asset classes in total.
Which are?
Whats the 4 asset classes?
Thanks for this video, good job
Thank you!
Yup all you have to do is find that ''limited partner'' to lend you the money. Easy.
Spot on!
👍
Thanks for this video
Thank you!
I did read that book. I think it's a great book.
There are definitely some useful concepts to take from it! 👍
Great video very informative.. only have 1 disagreement. Being a landlord is by for NOT passive income. .. the only true passive income o have found is shares in stocks.. keep on with the great videos
Thanks so much for this!
Thanks 👍
We love to learn from your sharing😍
Thanks for watching!
Bonds and houses don’t deliver enough income until you amass a fair amount to purchase them . To be fair , the concept is good however at the same time bonds and houses won’t drive you and your family around …
No one said it’s easy! You need a lot of capital to be able to live off your assets. If it was simple everyone would do it 👍
WaW! I enjoyed ur teaching
Did this last year, bought my wife her car that way 😁
Very proud to watch a YT video confirming it😊
That's great to hear. Congratulations to you and your wife!
@@WiseWealth Thanks!
Thanks
Thanks for watching! 👍
I really rate your ting my g keep going!!
I appreciate it. Thanks for watching!
You did a great job on this video and I appreciate the information.
Thank you!
All well and good until the tennant stops payings and you cant get them out... unless YOU pay for the court costs... then the tennant trashes the house... its more common than you think.
This is why I plan to get a property manager 😅
It does happen! Owning a property is a great responsibility. A property manager will help with the tenant application process by screening potential tenants to avoid situations like this. Something to consider!
They had a property manager 2 infact... they never vetted the tennant and said they did as the bad tennant paid 6 months rent in cash! Now he pays nothing.
very well explained video 👍🏻👍🏻👍🏻
Thank you! 👍👍
You got a subscriber my friend :)
Thank you and welcome!
Its a fact. Most people are more concerned with appearing wealthy than actually being it.
Exactly. True wealth is so much more than your possessions 👍
Wealth takes a lot of sacrifices that most people aren't willing to go through, Working a 9 to 5 is much easier, and that's why they will always be poor.
@@LohTek You can definitely build wealth with a 9 to 5 but most people won't though. Most people will wait for the next bonus check and spend it on a down-payment for a car they can't afford🤦♂️
@@oslotismcboom6733 I agree you can amass tremendous wealth working a 9 to 5 in addition to investing; but as I said most people don't want to go through the pain of sacrificing that shiny new car for a few years of differed payments into an income generating asset. They want it now.
@@LohTek Sad isn't it... The lack of financial management teaching in school is a crime.
I always say this to the people that say they want the shiny new toy now:
Why would you want the newest toy today even though you can't afford it? Why not delay gratification, and then get the newest toy 5 years from now which will not only be newer and better than the one you're looking at now, but you'll also be able to afford it.
The opm strategy !!
very insightful, you've earned my sub and like :)
Awesome, thank you!
Informative
Thank you!
"Rich Dad Poor Dad" is a motivational book, NOT a book on financial advice.
I've been looking all over the video for the point where he says it's a book on financial advice. He only says "It's a good book"... So does your statement negate the other 11 mins?
The problem is after paying property , income taxes,maintenance cost u get 3-4%ROI at best i.e like 3,500 pounds annually.
You need like 10 years to save for downpayment on that car plus all acuisition costs assosiated with it and then use the rent to pay down the rest over the next 5 years.Just don`t buy a 100 000 pound car and you are set.
Yes owning a property is a great responsibility! If you can find an alternative passive income stream that works better for your personal situation then go for it!
...don't buy a 100k car, lease it, drive it for a awhile and trade it in
@@jenninemorel7693 Leasing is the most expensive way to operate a vehicle
Don't buy a car. after 4years of rental increases bank will give you the equity as monthly payments were met. Equity equals the difference in repayment from day 1 and after 4years. So if your bond repayment was 2000pm with increases @10% after 4years it will be around 2942.The difference is 942 which equals a bond of roughly 100 000.This is the equity available on the property
Thanks for this video. Very nice
Thank you!
Amazing video
Thank you!
*amazing video*
Thank you!
Thanks for the video
Thanks for watching 👍👍
just subed your vids makes a lot of sense
Thanks and welcome! 👍
most will be more likely to buy a car that is pretty basic an dependable and get them to work, if you have to go into work the car is more of an asset then a liability or at least a tool
True!
Cars are consumed and lose value the moment you drive it off the lot. Not an asset by any means
@@oslotismcboom6733 if you can't get to work without one, it is an asset, I covered that when I said it the first time
@@oslotismcboom6733 you also fail to account for the concept of buying a used car from the owner rather then a dealer but
@@robbybee70 You don't understand lol
OPM car example needs you to set aside 4X the value of the car to invest to get a return equal to to the payments for that car. You will be much richer for it, but is a major detail left out.
Yes - to leverage the OPM strategy you may have to set aside a greater value than buying the car outright. It depends on the yield you return on that investment, which is impacted by many variables. Finding a good investment with that great yield takes time, knowledge, experience and research! Thanks for watching.
The book contains a fair amount of miss-information. It emphasises that Robert and his wife both retired early, yet he recently did a speaking tour of the UK. I hardly think spending a large chunk of your time drumming up new pilgrims is the kind of retirement most of us would enjoy. In its defence there are a number of great 'take-aways' such as the link between 'Baby-Boomer' pensions and the stock market. Keeping to the ethos, put it on your Christmas wish-list and get someone else to buy it for you!
Interesting spot on his UK tour. Ha yes, if you can get someone else to get it for you then you've already applied a key takeaway!
We can take the things of our own 😃 is also a great deal 👍
He is most certainly retired. He is now doing what he wants to do just because he wants to do it... he has no need to do it.
Personally I think it depends on your definition of retirement.
If you define it as not working at all. I suppose you're right.
If you define it as having time to spend on doing things you enjoy without having to worry about if you've got an income to support your lifestyle. Than you can still do a job if you like doing it and if you get bored of it you can quit any time.
Maybe retirement should be abandoned as a goal and financial freedom should be the thing to strive for.
What are your thoughts on this?
Retirement isn't what you think Simon_k - very different in fact. When you retire, if you stop living and doing, you begin to die. This is what they don't tell you in life. So, speaking engagements is exactly what retirement should be - still being pulled to do things, keeping you engaged, keeping social, keeping alive; all on your own schedule. Throw away your own misunderstanding of what retirement is, and realize that your whole life is about grooving you to keep going, and keep doing. A happy retirement is truly when it's on your own schedule. peace and love
Great content!!
Thanks! 👍
I am almost financially blind, I just saw a great video
I read Rich Dad Poor Dad book
how do you find these investors to buy the home for you? do you refer an investor to the bank load or to actual private people who do that? and if you're talking about actual people, why would anybody trust to buy me a home and i will manage it if i have no experience at all and i know nothing about real estate? that would help so much, fantastic video you dropped here.
It could be the bank or it could be an individual with money to invest. If you approach them with an opportunity that could allow them to generate a rate of return that is attractive and secured against a stable asset like property then they could be willing to lend you the money in return for interest payments over time as well as a balloon payment for disposing of the property to distribute remaining cash proceeds to them and any profit for yourself.
Everyone must start somewhere. If they are willing to put their capital at risk by investing then they may be willing to do so if you come to them with a genuine opportunity. Of course you have to demonstrate to them that you mean business and take the proposal seriously, they are after all trusting you with their money! Thanks for watching.
So what can I do if I don’t want to deal with interest ??
Where do you find a 100k property to generate rent to pay for mortgage and the car. Numbers do not add up.
Very interesting video, I’m currently reading cash flow quadrant, I must get rich dad poor dad too!
One that I need to pick up! Thanks 👍
Spot in100%
Thanks for watching! 👊
I love Rich Dad Poor Dad!
Many people do!
Warren buffet quote would be good apart from he's 90 and still working. On a serious note t though he video gives good advice
Ha good point - perhaps he loves what he does so much that it isn't a 'job' for him anymore!
009⁰0
I Think this video just talked me out of my Tesla Cybertruck.
Ha - if it ever gets released! Food for thought but something to think about. Thanks for watching 👍
Avoid recurrent expenses,have recurrent income
What are those?
Theres not many good opportunities to make passive income. Nothing easy anyway, most things are near on impossible today!
This is nice, pretty simple concept. The problem is, 100,000 pounds isn't accesible to most people. What most people would really want to know is how to make 100,000 pounds. Some persons will never see that kinda money in their lifetime working a 9-5 which is where majority of the viewers here are coming from.
Continuously save and invest as much as you can into a diversified portfolio of stocks and allow it to compound over time. Charlie Munger famously said that the first 100k is the hardest and that you should do whatever you can to make that first 100k as quickly as possible. It becomes easier after that. Good luck to you 👍
Great video
Thank you 👍
YES this is good information to me , i have mini super mart and i invest monet on that it know a days its runing on locess becouse of covid19 ,and it invest is totaly by lone i am abaile to pay emi also becouse of loss this video it use
👍👍
Using your mortgage line of credit to invest in stock , would that be a good or bad example ?
That would be a very risky venture! You don’t want to default on your mortgage
ASSETS OVER LIABILITIES
Yes, although in order to own a house that generates income…you must first own a house to live in.
That's right, it takes time
And it's just this easy, too! Go ahead and just pay cash for a rental property and stick a tenant right in there. And, of course, the tenant will pay on time every month, like clockwork. No moratoriums or rent controls or forbearances. You'll get your money. And, don't worry about the city hassling you for ever increasing fees and service charges either. That hardly EVER happens. State taxes on an income property are really reasonable too, especially if you live in say...California. Don't get me started on what happens if the tenant hurts himself while on your property and then how easy the insurance company will be to deal with. It's awesome! Read a book and cash flow your way to wealth! Boom. What could POSSIBLY go wrong?
No one said it would be easy!
Agree. I’m trying so hard to find something in my area. It’s def not easy
It's so easy but why most ppl won't do it is because most ppl only think of working to make money or a get rich scheme. Illegal stuff. They dnt wanna put in the hard work and reep the reward in time.
It’s not easy! It takes discipline to keep doing it especially early on when the power of compounding has not had time to show its true potential.
Rich Dad Poor Dad is one of the greatest books ever written, it's far more useful than Bible. That book changed my life and I have been sharing it with anyone who would listen. Great video
There are some useful tips to take from it for sure! Thank you 👍
The problem is that passive income generated by the 100k asset is probably a lot less than that lease payment of 100k car
Correct. You will need to invest in an asset worth more.
You completely missed the point. An asset generates money, a liability costs money. Buy assets first, then use that income to buy liabilities.
@@foodgeek. Dude shut up he didn't miss the point at all. He made the point of a 100k asset is in no way shape or form gonna be able to fund a 100k car and he is right. So this whole little "example video" is misleading in a way with showing a high end sports car and a 100k house.
Very true but in my 100k asset I'm making round 800 to 900 a month in dividends. some are very high yield but only enough to make 50 month so 4 to 5k in each stock of 40 holdings to generate that type of income
@@byranttaylor1535 9.6% yield of dividend?
DON’T lend money to people or businesses! This is my biggest mistake and regret!
When you dont have a better yield earning way for your money, lending and investing on businesses is the way to go.
Investing is risky, you need to look for risk-adjusted returns. The risk you take should be according to your risk tolerance, which is different for everyone. You always put your capital at risk when you invest, but you cannot build true wealth by avoiding investment in most cases and only saving.
@@WiseWealth I was conned. It’s not the same as normal investment risk.
@@WiseWealth what wrong with just saving?
@@isaidit4720 Savings are eroded over time by inflation. You should look to generate a return on your capital
Excellent job with the information
Thank you!
Do you have any tips for finding investors that are interested in people that are new to this model? Its really hard finding investors if you dont have any connections with the community...
You've got to get yourself out there and make yourself known! Be your own marketer, start social media channels, reach out to others to connect. It's all a numbers game my friend.
Unique hardware can help you, to arrive your wealth-goals. 👍😎🚀
That's great advice but how does one buy an asset without money? If one can afford to buy a 100k liability then I'm sure the loss incurred wouldn't really hurt
Of course you cannot buy an asset with no money… by definition you cannot “buy” something for free. You have to invest in it. The 100k number is not set in stone, you can scale up or down based on your personal situation, the principle in the same.
The 100k cash example in this video is not a good representation of real life, I don't think anyone would ever outright buy a 100k car off the lot in cash. The real pain comes when you realize that the loss of 30% is 30,000 that you just gave away for free to the car dealer, and on top of that you are paying interest on that 30k for the pleasure of giving it to them.
The car, while fun and exciting at first, will never generate wealth for you, and you will never recover the 30k that you lost to depreciation. The same can be said for a house that you intend to occupy, spending upward of 200k on a home that does not produce income does not make sense. However a home worth 200k is better than investment into an expensive car, you can pull out a home equity line of credit from it and use the loan to invest, though most people don't use the money for that. Better to buy a home that you intend to rent from the start, and don't spend 200k on it because you will never rent for enough to cover the cost basis.