Build Massive Passive Income (Leverage + Velocity + Tax Savings)

Build Massive Passive Income  (Leverage + Velocity + Tax Savings)

When YOU change everything will change for you.

Most people are waiting for the economy to change; job; relationship; business to change. YOU change. Everything Changes. VALUE Makes the difference in Results. You can’t get more time but you can Create More Value.

1st Lesson In Economics.

We get paid for value. You don’t get paid for time. You get paid for the value.

Is it possible to get more valuable in the marketplace and make 3 times the money? YES!

It is possible to do much better in the marketplace if you work primarily on yourself.

How to do you develop an above average income? Become an above average person.

Develop an above average intensity to Win. That will change everything.

 

LEVERAGE

How do you use the principle of wealth? Using leverage. You entice someone to lend you the money and invest in something that pays you a better rate than what you are playing on your loan.

YEAR 1

Let’s say you borrow the 100,000 from the bank to add to your 10,000 to invest into your business. This is called having skin in the game.

After the first year you earn a total of 13,200 on that money at 12%. You have to pay the bank interest of 8,000 so you are left with $5,200.

Now if the bank was willing to lend you 100,000 so long as you put in 10,000 then the bank should be willing to lend you another 50,000 because now you have another 5,000 invested of your own money in the business. This is true even though 5,000 came from business earnings. Banks like to see you leave earning in the business.

This is called “Retained Earnings” because you leave them in the business.

 

VELOCITY

Velocity = Retained Earnings.

How fast can you go? The key to financial velocity is to keep your money moving. Think about the compound interest in the bank. All you did was keep it sitting. While it earned a small amount of interest it took you 10 years.

Think about when you added leverage. You earned almost the same amount in the first year that it would have taken in 10 years.

 

The key to financial velocity is to keep your money moving.

YEAR 2

Here’s How Velocity Works.

The additional earnings are a result of using all 3 core wealth principles

  1. Compound interest.
  2. Leverage
  3. Velocity.

You earned compound interest on all your money.

You leveraged your initial 10,000 investment by borrowing 100,000 from the bank

Instead on being content with the earnings on 110,000, you decided to leverage again with the earnings from the first year. This is where you borrowed the additional 50,000. Leveraging your first years earned interest is called VELOCITY.

You’re simply moving your money into additional leverage so that you can continue to gain speed in building wealth. By doing this you would earn a total of 13,000 in 2 years.

The more you leverage the faster you employ your money, the faster you build wealth.

 

Build Massive Passive Income Through Tax Savings

(Year 1 & 2)

Suppose your tax strategy produced a tax savings of $20,000 per year. What happens when you add your tax benefit on the earnings?

You can take that 20,000 add leverage say 80,000 and buy an additional investment for 100,000 in year 1. That 100,000 investment produced income at 12% or $12,000. You pay 8% to the bank on your 80,000 loan of 6,400 leaving you with earnings of 5600.

The second year you earn 12% on 105,600 (100,000 + 5,600 earned in 1st year) for a total earnings of 12,672.

You pay interest on your original 80,000 loan of 6,400 leaving you with earnings of 6,272.

Plus you have another 20,000 in tax Savings! Since your tax strategy produces 20,000 of tax savings per year. So you invest this along with another 80,000 bank loan, producing income of 5600

Now after 2 years you’ve added 11,872 of investment to your original 13,024

(Year 1 Leverage earnings 5200 + Year 2 Velocity earnings 7,824 = 13,024)

You’ve added a total of $24,896 of investment earnings in just over 2 years using your original initial investment 10,000. This doesn’t include the 40,000 of additional equity because of your 2 years of saving 20,000 in taxes.

This was achieved using all 3 at the same time: Leverage, Velocity and Tax Savings.