Ask most people and they will tell you that earning passive income is the holy
grail of making money i mean who wouldn't want to make money while you
eat sleep or even netflix and chill however earning passive income is easier
said than done especially when your funds are limited fortunately with that
earning passive income becomes much easier and in this video i will share
with you four ways to make passive income with debt and if you're new to
the channel then hit the subscribe button below for more life changing
content debt is arguably the most contentious financial instrument there
is today as people like dave ramsenia will tell you that dead is literally the
devil and that carrying around a credit card in your wallet is a sin grant
cardone on the other hand will tell you to borrow as much money as you can to
help finance your future prosperity with people while giving you two very
different pieces of advice about debt it's no wonder that people don't know
how to feel about it however generally speaking i think that most people are
somewhat averse to debt and really can't blame them we've all heard stories of
people ruining their finances by getting into higher levels of credit card debt
and others who will be paying back their student loans until they're 50. in short
we've been conditioned to believe that debt is bad but if you ask me it's all
and how you use it i like to think of debt like a car in the wrong hands
driving a car can be dangerous and if you get into an accident it can be
downright fatal however if you can use the car properly you can offer many
benefits like being able to get to from point a to point b making money if you
use it as a tool in your ride sharing business and in the back seat of the car
you can uh never mind in short debt just like cars can be bad or good it's really
just all in how you use them so what are four ways you can use debt to earn
passive income let's get into that right now number one investing in real estate
i believe that everyone at some point in their life should have the experience of
using real estate during passive income now when i say that i particularly mean
owning a physical property yourself and renting it out because there are many
ways to earn passive income with real estate but we'll talk about some of the
other options a little bit later you see when it comes to earning passive income
residential real estate is hard to beat and here's why first it's super easy to
understand how to use it to make money we all grew up in some sort of household
and as such we are very familiar with the day-to-day process of living in a
home as such when investing in real estate part of its workings will come
naturally to you moreover like i just said we must all live somewhere and when
you own an asset people just don't want but need then this asset class becomes
even more fruitful to own now you may argue that if people need to live they
can just buy instead of rent from you but the privilege of buying a home is
becoming less successful to the masses every single day now i know where i live
last year alone home prices skyrocketed by more than twenty percent that means
that a house that was five hundred thousand dollars in 2019 rose over six
hundred thousand dollars in 2020 and these large price increases are making
buying less and less accessible to the average income earner therefore if you
ask me the amount of people who will not just want to rent but need to rent is
only going to increase over time so how does debt plan to making money with real
estate i'm sure you already know the answer but for the slower people at the
back of the classroom i will explain anyways unless you're rolling in cash
and even if you are most people tend to opt to finance part of the purchase of
their property with debt this debt almost always comes in the form of a
mortgage which is a low interest debt instrument bestowed upon people with
sufficient income and credit let's face it basically no one would be owning a
home if it weren't for debt being able to save up hundreds of thousands of
dollars for the average income earner would take a lifetime and i'd assume
that living in your parent's basement until you're 50 isn't exactly the ideal
life you want to live fortunately that saves the day and offers a means for
people to buy homes or rental properties they can use to make passive incomes
through the rental income they can earn from them so beyond fiscal properties
however there are two ways to make passive income with real estate the
first is through real estate etfs these are baskets of funds invested in real
estate companies and when the funds pay out a dividend you collect a dividend
proportional to your level of ownership in said fund the second way you can earn
passive income without owning a physical property yourself is by investing in
reads reits are large holdings of physical properties that funds own and
you can pool your money into them and collect your share of passive income
from said properties so both of these alternate means of making passive income
with real estate typically require much more cash invested to see noticeable
returns so as such to increase your position and ultimately your cash flow
you can take on debt to gain more access to capital but i just warn you that this
is a financial move that i rarely ever suggest people use number two building
up a dividend portfolio making dividend income is seen by many as a holy grail
of earning passive income and i can totally see why who would want to do
absolutely nothing and get paid for it i know i could certainly get used to that
lifestyle actually while we're at it smash the like button below if you too
are about that life now if you're unfamiliar with what a dividend is then
you may be wondering what all the hype is about so let me briefly explain what
dividends are and how debt can be used during greater amounts of them dividends
or distributions accompany profits to shareholders so when a company pays out
a dividend to an investor it's basically thanking you for supporting the company
via the compensation they provide sometimes these dividends come in the
form of more shares but generally speaking these dividends will be
distributed as cash instead so how do you start acquiring these dividends
simple you start investing in dividend producing companies now up until this
point my explanation of how dividends work and how they earn you passive
income must sound like a dream scenario simply invest your money and collect
paychecks every quarter or every year and honestly who doesn't like the sound
of that however when you open that check and you see that your investments only
yielded a measly 14 your level of excitement may take a dip
the harsh reality is that to earn any significant amount of money from
dividend stocks you need to have a large amount of invested capital even with a
hundred thousand dollars invested in high yielding stocks like at t you would
still only be collecting roughly seven thousand dollars a year in dividends
this is certainly a far cry from the income you need to earn to live a life
of dividend freedom let alone being able to speed up your path to wealth by any
measurable means the key to winning in the dividend investing game comes down
to two elements picking the right stocks and maximizing your position i won't get
into how to pick good dividend stocks here but as you can see from the last
example you'll need to have a strong position to be able to collect
substantial dividend checks this is where debt comes into play if you invest
on margin which means you're using debt to acquire extra cash to invest with you
can increase your position to reap the benefits that come with having more
money in the market this will lead to bigger dividend checks over time however
part of these returns will be offset with the financing costs you pay to
invest in this way not to mention if your position gets called because you
lack sufficient funds in your portfolio you may be forced to sell which is
another reason why this approach should be used with caution however i'm just
here to tell you the options you have accessible to you not the ones you
should necessarily pursue number three productizing your skills whether you
realize it or not every day you work you're exchanging the skills you have
for money for some they're exchanging their expertise with cars when they work
as a mechanic or their expertise with financial statements when they work as
an accountant the problem with these two examples and with most jobs in general
is that the only way you get paid for your expertise is by actively putting in
effort now what if i told you that there was a way to use debt turn passive
income through the skills you have would you be interested of course you would
that's why you're here well the good news is that half of the work has
already been done because chances are you have already used debt to acquire a
skill or a set of skills via the post-secondary education you have right
now there are roughly 42 million americans who have some amount of
student debt to pay off and while he won't get into how sad that is that the
average student graduates with nearly 40 000 worth of debt the good news is that
the skills they do acquire from going to college can be used to make passive
income you've probably never thought about turning your knowledge into a
product before but when done right this is an excellent way to make positive
income one example of this that comes to mind are people who use their knowledge
and fitness to sell meal plans and workout programs simply set up a site
generate traffic and you can exchange all your knowledge and wisdom via the
programs you sell alternatively you may have gone to school as a hardware
technician and no computers like the back of your hand in this case you can
build a course or write a book around how to build your own computer from
scratch which is knowledge i know a lot of people could benefit from in short
ask yourself what skills and knowledge you possess create a project around it
and then market it and when you do you'll be one step closer to starting to
make some of that sweet passive income everyone keeps talking about number four
building and running a business i may be narrow-minded but i believe that the
only way people can become wealthy in this day and age is to start their own
business businesses are amazing vehicles as well because they allow you to
leverage greater levels of knowledge scale and distribution during revenue
which is the biggest issue that people struggle with on their quest to personal
financial prosperity now we are blessed to live in a world where many businesses
can be started with very little capital for instance i started my youtube
channels with roughly a hundred dollars and i would hope that you wouldn't need
to go into debt to gain access to that kind of money however over time
businesses need more money to grow and depending on how profitable the business
you run is you may need to go into debt to see the growth you desire for example
you may need to access business loans to hire more staff or acquire the equipment
you need to run your operations i don't think that the fact that a business
needs money to operate is a new concept to anyone so let's get into how you can
use debt in a business during passive income generally speaking most tasks
that get complete in a business need to be done by someone most of the time that
someone is you the business is founder and operator however it doesn't have to
be i know my own business i've now outsourced many of the core functions to
managers so that i can free up my time to start working on other endeavors that
will allow me to increase my income further now if you don't have cash to
pay people to run your business for you what do you do you guessed it you take
on debt low interest lines of credit can be viable means of financing your
workforce as long as your profit margins can support the interest costs that come
with it again this is probably not the most beginner-friendly means of making
passive income with debt but it's important to point out because as you as
an individual will only ever have so much personal capital to deploy and as
such if you want to ignite your growth deploying other people's cash is often
the way to go hey it looks like youtube thinks this next video is the one that
will change your financial life forever give it a watch and let's see if they're
right