How to Get Income Producing Assets
My goal is to buy income producing assets. So I don’t have to work.
What’s an asset?
Therefore assets are what I own. So Liabilities are what I owe. In other words, assets remove liabilities. So I now have a plan for my investing.
Create or buy income producing assets
Buying income assets is expensive. Amazon costs $3096 today. However, it produces zero income. So why buy it? Because it appreciates. So I want both. The less income, often the greater the appreciation. So the reason is companies reinvest income, instead of paying it out to me in the form of a dividend.
Buy income assets
Therefore I buy income assets. For example JP Morgan Chase Bank. Pays $3.50 or 3.5% per share. Therefore it appreciates and pays me income too. From $99 to $117 a share this year.
Create Income Assets | Income Producing Assets
So businesses I own 100% pay me more. 32% to 40% return, not 3.5% like JP Morgan Chase. However, it’s more difficult to create a business. Therefore a higher return to me. I am a passive investor. So someone has to manage my business.
In addition, I own 100% of the asset recovery company. Therefore I get all the income. So with the Amazon example, I get no income but a big appreciation and it costs me a lot more to own. It costs me 100 times more than the income it produces.
Here are my 5 rules
Firstly, buy or create income-producing assets.
Secondly, creating is more difficult than buying
Thirdly, creating assets produce more income.
Fourthly, buying assets cost more if publicly traded
Fifthly, buy undervalued assets.
Simple, not easy.
It’s easy to say, hard to do. Therefore it takes laser focus. Above all the right temperament. So I need to be patient and persistent. Wealth happens over time. My wealth and income increase through persistence and focus. Therefore I have only this one job. Increase income-producing assets.
Why people succeed
Reasons people succeed.
- Focused. No distractions.
- Right temperament. They love the game.
- It’s not a job. It’s a passion. Better yet, an obsession.
- Finding or creating is fun.
- Lastly, I can do it from home.
Work from home
I love my home. So finding and creating income-producing assets, I can do from home. In other words, I have all the tools I need at home. For instance, TD Ameritrade gives me all the information on public income-producing companies. Interactive Brokers loans me 3.1% money to buy the income-producing company assets.
Therefore I have information and money at my fingertips.
Warren Buffet tells me how to invest for free. Therefore I have the best teacher in the income-producing asset world.
Create income-producing assets
Creating income-producing assets come in 2 forms. Business and Real Estate. So public companies are examples anyone can buy. Creating income-producing assets is a challenge. However, the reward is greater. I own an asset recovery business. It produces over 30% return per year. Sometimes almost 40%.
I created this business in less than 1 month. 35 years later it still produces income. However, I don’t run it anymore.
My first monthly income was over $67,000. 2nd month $88,000. So this was 35 years ago. Therefore it’s double that today. Above all my profits and net income are up 10 fold.
I can own real estate income-producing assets without buying real estate. McDonald’s owns billions in real estate. Just buy stock in the company. So all those 40,000 locations are owned by Mc Donalds. So the franchisee pays McDonald’s rent. Therefore by owning the stock I own the real estate too.
So I own real estate here and abroad. Just buildings that produce income. The risk is higher because I pay cash or take out loans. The more loans the less income. So zero loans mean I get higher income. So if I pay cash for my real estate I have less risk from debt.
It’s not rocket science.
Being a successful investor is not rocket science. Therefore it takes no special knowledge. The key is persistence and obsessive focus. Therefore the more of these qualities you have, the more you make.
How Much can you earn?
My income-producing assets return me about $300,000 to $500,000 a year. If I reinvest then I make less. However, reinvestment gives me bigger and better income-producing assets. So in the long run I make more money by reinvesting.
Warren Buffet bought 9 Billion dollars of his company stock this year. So he invested $9,000,000,000 in shares of his own company he did not already own. So why did he do that? Because it was a good value and he will make billions more on that investing in Berkshire Hathaway of which he owns 20% and controls.
I am obsessed with what I do. Building businesses and income-producing assets are what I do.
So you can be less focused and make less money. Or more focused and obsessed than me and make more money.
Please comment and ask questions? This is the most fun game to play.
Mike Addis, Carlsbad California