Most of us understand that we should be investing in our futures. The general media teaches us that putting money into a 401K is investing; however, it is more akin to saving.
Yes, the money goes into the stock market, but you still “think” like a saver. Today, let’s discuss how to “create” money like an investor.
Investors like to create money. Most 9-5 W-2 employees believe money must originate from an employer or company. Once you begin thinking like an investor, you’ll never return to the employee mindset.
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Thinking like an investor. Transitioning from an employee mindset to an entrepreneurial one is incredibly challenging for older people—including myself.
It took me reading over 25 books to break years of being in the military and climbing the corporate ladder. Can you imagine looking at a pay chart and determining how much you are worth?
The most influential author in my life is Robert Kiyosaki—by far. I must stop myself from rereading his books over and over again. I like to think of his style as comfort writing for comfort readers.
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One of his most powerful ideas is that of an infinite return. This concept is complex, especially for standard W-2 employees who love to save money (but not invest).
An infinite return states that you own an asset without any of your own money involved. Of course, most people take this as using OPM or Other People’s Money.
Creating infinite returns safely. I like to reduce the leverage aspect of infinite returns. I started investing while having a wife and two kids. I already owned three houses and had a career.
I didn’t want to blow up my life by buying ten rental homes or starting a business with venture capital money (I am being facetious).
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You can still use controlled leverage to build a portfolio of assets safely. Let’s go through the steps of creating an infinite return with a barn house.
Our lovely barn house. My wife and I bought a barn house for our three acres of land in 2020. It cost $8,500, and we paid it off entirely with our own money in three months.
Today, we use it as a storage shed. However, we also allow others to store their things in the barn house for a fee. We bring in roughly $150/month in passive rental income from the barn house.
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I did not know or use the concept of an infinite return at this time. However, let’s look at how I can buy barn house number two using an infinite return. After writing this article, I am seriously considering taking this for action.
Creating an asset from thin air. One of the things I love about M1 Finance (affiliate) is that you can borrow against your account.
Currently, I have $41,000 in M1 Finance across three different “pies.” In total, I can take a margin loan of $16,000 at 6.5%. I also don’t have to repay this loan on any schedule.
Let’s say I take our $8,500 against my brokerage account and purchase another barn house. The goal is to use all of the barn house’s revenue to repay my loan.
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If I increase my monthly revenue to $300 by using better advertising, I can repay my loan in 2.5 years.
Now, I have an asset (the barn house) that produces money ($300/month) while having my initial investment ($8,500) to reinvest, repeat, or save. Welcome to the world of infinite returns.
Seeing infinite returns, everyone. Once you understand the concept of an infinite return, you can see them everywhere. You can literally grow infinite returns if you start a garden with seeds from a tomato or green pepper.
As an investor, you must think outside the box. You have to train yourself to turn everything into an infinite return.
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One of the reasons I started writing, designing, and publishing my own books is because the process is in an infinite return.
Renting rooms is perhaps the best example of an infinite return. I don’t think a more pure form of cash flow is available to the average person.
Use the sharing economy. If you must purchase something for your business, job, or hobby, why not share it with others for a small fee?
The sharing economy has never been more accessible than today. Let’s say you created a sound room with high-end microphones for your podcast; however, you only use it three times a week.
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Why not rent it out for a couple of days a week for $60 per day—this is pure income. Most people do not want to share because of some random fear of ruining their stuff.
Serve more people. The more people you serve, the richer you become. Place insurance on your sound room against whatever can go wrong, and proceed to earn pure money.
The more value you add to the world, the easier the money flows into your account. You can take the cash flow from your sound room and insert it directly into an income investing portfolio.
Most people only serve themselves by working a job. They exert no leverage, no thinking, and no sharing. However, they attempt to get rich by using time and retiring at age 65.
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Let’s say as a full-time podcaster using your sound room, you can invest $1,000/month. If you rent your space four times a week, you can save another $1,000. If you add additional luxuries to your room, like fancy cameras, a gaming rig, and lighting, you can earn another $1,000.
Conclusion. By sharing and serving, you increased your investing potential by three. Thinking like an investor is more than pushing money into a brokerage account or 401K.
Investors see a world of income (not money), therefore, a world of abundance. By sharing your things, creating content, providing houses, or leveraging experience (consulting), you can increase your income and improve your lifestyle.
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I was a 100%-employee-minded, corporate-ladder-climbing, 401K-saving, and pension-loving indentured servant.
Once I crossed over to an investor mindset, my entire life improved. It’s more than my brokerage and savings accounts that have grown.
I do not fear the world for my wife and me. Better yet, I do not worry for my children like before. I have the knowledge, skill set, mindset, and resources to ensure they can become whatever they want.
I can now write, edit, design, and market books. I can operate a blog website and a Facebook group and publish on Medium and LinkedIn.
The best part is I see a world of abundance. I can purchase three more barn houses and create cash flow tomorrow. I can use home equity to buy a home in Mississippi.
I have all the options in the world, but I choose to serve others. In the long run, that’s the heart of being an investor. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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