Hey, what's up YouTube. Kris Krohn here. And today we're talking about how to
make passive income. Dude, it's one of those big buzz things
like everyone wants to know how to do it, everyone wants to know is it real and
I'm going break it all down for you right now.
So, listen. I absolutely want to break down for you what is passive income, how
does it work and I even as a bonus at the end of the video, I want to share with
you one of my favorite ways to create it. But I also want you understand that I'm
probably one of the best people on the planet to teach this simply from the
standpoint that I've been building residual incomes for the last 15
years. And the best part about the way that I've built a true residual income,
is that this is the definition. It's work you do one time but you continue to get
paid over and over again, potentially for the rest of your life.
Now, not all residual income have like, you know, can last a whole lifetime. Some
of them in last months, some of them last years. But that's the definition that you want to
understand. Work one time, get paid the rest of your life. now just for a moment
think how different this is from having a job, right? You go work for someone else
or you go to college and you go to work for someone else and get paid more than
someone that doesn't maybe get a college degree.
That's not always necessarily even true these days anymore. But what you're doing
is you're trading your time for money. So, whether you're earning $8 an
hour or $800 an hour. Basically, you have to put in an hour if
you want to get paid. Now, there's a lot of people that think, "Wow, I should get a
better paid job. Because if I do, then I can work the same hours but actually
make more money. Dude, you will always be trapped with that thinking. Because the
reality is, we always find a way somehow, someway to allow our lifestyle to adjust
to whatever our income level is. The real solution that will create freedom is you
got to stop trading time for money. And the way that you start doing that is by
finding a real residual income. So, the definition is work you do this many
times, one times but get paid the rest of your life. Here's what you're really
looking for. You're looking to get involved with something that can get
someone on the hook financially to continue making a financial investment
over and over and over again. The only way a residual really works is if you
can offer something to someone, sell something to someone or create value to
someone that they say, "Every month I want to give you some type of money." And
that's really the definition of taking that residual income, that passive income
and turning it into something really practical. So, what we want to do here, if
you want to actually take a look at your options like, "What can you do that would
actually create a residual income?" I would like to hear your ideas in the
comments below but let me share with you some of the common ones that I'm really
aware of. One thing that you can do, is you can get
started with an M-L-M, okay? If you don't know what that means, it means multi-level
marketing. Now, one of the problems with multi-level marketing is that, there's a
lot of people that aren't a fan of it. Laws have changed recently that make it
very difficult for them to work inside of boundaries that really work. But the
biggest problem with M-L-M is that, you really need to often build an
organization of thousands and tens of thousands of people to build a
meaningful residual income. I mean, the effort that it goes to go out there and
get someone to pay $100 for something and maybe every single month, you're
going to get 5 bucks. Now, the one hand, that is a residual income. But what I
struggle with when it comes to this kind of residual income is, it's like, "Okay,
$5 every single month. How many people do I need to know. If I could
actually go through 50 people and sell 10 of them and get 10 people doing this
deal, then I'll probably get some upfront money but now I'm getting 50 bucks a
month, right? 5 dollars times 10 people. And so, I'm getting $50 every month but
what happens in six months? A lot of those people drop off. So, guess what? Now,
All that work was really for nothing. That five dollars was really
only ever going to be worth 30 bucks. Now, there are some major massive net workers
out there that are built for models like this and they can make crazy amounts of
income. But do you see kind one of the problems I have with this passive income
is, "How realistic is it for the average person to win?" I want to share with you
something really different. There are not very many ways of making a residual
income out there but one of the ways that I absolutely love, you can guess, it
is real estate. And what I want to do right now is the bonus, is I want to
share with you a way to create a residual income and again, if a residual
income is doing work one time and getting paid over and over again, then
part 2 of that definition is I got to find someone that I can repeatedly
create value for that wants to keep paying every month. My favorite way of
doing that is with real estate. Now, let me just break down exactly what I mean.
Because this is very different here in the M-L-M world, I might need to get a
thousand people or 10,000 people involved and create all these different
levels and I can make some money with that. I know what I'm talking about this
because I owned a couple of M-L-Ms. I've built them and I've been able to
see firsthand what works well and what doesn't work well. Here's what I love
about real estate. If I buy one house, not ten thousand, if I buy one house then the
benefit that I have on this one house that I'm doing is that I can get this
house to pay me $500 a month of residual
income every month, on going, no matter what? How do I do that? I'm going to share
with you one strategy, it happens to be one of my favorite strategies. It's I do
something, you know, you've heard of rentals like becoming a landlord, not a
fan. Instead what I do, is I buy a house, usually I don't use my own money or
credit. And then what I do is I go to somebody else and say, "Hey, how would you
like to rent the house but we'll do it different. How about I rent it to you and
I give you an option to be able to buy it down the road. That way you're not
throwing rent money, away?" That's really popular, especially for someone that
can't use their credit right now or might be moving or the banks are
struggling to qualify, they need to do some credit repair. There's different
reasons why people want to do this thing called a "lease option" and a lease option
can pay you this 500 a month. Now, in reality, here's what's happening, you have
a mortgage and that mortgage might be $1,000 a month on this house but your
rent, if it was just a straight rental, might be 11 or 12 hundred a month. But
when someone has the option to come in and actually buy this house. They're
going to give you 3, 5 ,7, 10 thousand dollars upfront. And then all of
a sudden they're paying $1,500 a month and you see that you get 1500 every
month, pay the thousand, what's left over? Well, there's about $500 a month left
over. That is this positive cash flow that I'm talking about. Now, this residual
income can last maybe 3 months or 6 months or 9 months. How long is
this residual income going to last. Well, as long as I own the house. So, let's just
say for a moment that I own this house for 2 years and then I sell it to the
people that are in it. Well, now of a sudden, on average, I've made $5,000 up
front. This was their initial down payment.
I made $500 each month of a residual income and then when I sell the property
let's say, that I make a $3,000 game. We have this up for
two years. If you're earning $500 every month for 2 years, that's $12,000. You get
you're 5000, you get your 30,000, you've made $41,000 dollars. How many
transactions? One. This my friends is what I call a "true residual income." But I want
you understand that you're not going to have it forever. Because when you take
that gain and any equity you have this property, let's say it's 50 or $60,000,
what are you going to do with that money? Well, you're probably
going to parlay that into a couple more homes. Well, shoot. Now, you have 3
homes paying you 500 a month. 500, 500, 500. My passive, the residual income went from
500 a month now, it's what? I was 1,500 month. That's how in a four and a half
year period of time I retired. I was dumped by 26. I custom built this home
and started traveling the world and having all these new options. That's why
I'm glad you're watching this video because residual income is really key to
becoming ultimately free. I have freedom like, so few other people have. It's not
because I can demand a lot of money per hour. It's that I don't have to put in
hours but I still what? I can still get paid. Now as a bonus here at the end, I'm
going to share with you a way that you and I can work together and I can plug you
right into a system like this. So, we can get your residual income going for you
right now. Listen, it's easy for me to just say, "Hey,
go do real estate." But instead I'm going to say, "Go to this website" and let me
share with you the easiest way that you can get into real estate. This is the way
that I wish I have been able to get into in the beginning. It's worked out from
the other way but I can make it work for you far better.