It’s always amazing to see the lights at night in El Paso, Texas. I can see an ocean of lights from my hotel as I overlook Juarez, Mexico.
El Paso is a unique city that has its own sense of identity. I usually stay in Las Cruces, Mexico, because it is much smaller and quieter, but I choose El Paso this time.
A unique city calls for a special income stream. That’s why we must continually grow our revenue to experience everything life (and El Paso) has to offer.
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Welcome back to the Financial Freedom Road Trip series (Part #1, Part #2), where we get to the bottom of growing passive income streams.
The joy of rental income. Buying a home has been a divisive topic over the last couple of years. As the Federal Reserve raises interest rates, people have had difficulty affording mortgage payments.
The good part is that we can earn rental income in many other ways besides owning rental properties. The most essential part of creating rental income is learning to share.
The joy of rental income is that it helps you beat inflation. Asset prices tend to grow during an inflationary period, along with rent increases.
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Therefore our goal should be to eventually own some rental properties, even if it is to assist our children with homeownership later in life.
Let’s start with rental properties. The most well-known type of rental income is owning rental properties.
Most people can generate rental income by making some sacrifices. How so? The average person is sitting on a gold mine; however, they cannot see it.
Over the years, families (parents, siblings, cousins) have lived farther apart. Even if they live in the same city, they each have separate mega houses.
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But what if the families combined forces? What if two families moved into one house and rented the other house to tenants?
It sounds unbelievable, but how do you think people get rich? You must do something different to get a different result than the masses. Let’s run the math.
Doing the math of shared housing. Let’s say each couple makes $10,000 monthly and pays $4,000 toward their mortgage.
Couple A moves in with Couple B and can rent their home for $5,000. The couples split the rental income profits ($500 per month), and they also split the cost of the mortgage ($2,000 each).
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Now, each couple has $2,500 extra to invest in dividends or start an options trading account. They can also save a down payment toward buying another rental property.
Will this scenario work? Umm, yes! Not only will it work, the families will thrive. The kids would have more friends to play with, and the parents could reconnect.
Sometimes we forget that families were so much tighter 100 years ago. The idea of leaving your family to start your own adventure wasn’t very appealing to many folks—family was everything.
Time to get roommates. What if you don’t have family nearby? What are your options? Well, you can always get a roommate or two.
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Having roommates may not be your cup of tea, but it can change your life and financial situation.
My wife and I had roommates for 4.5 years, and we went from -$77,000 in debt to +$250,000 in savings and investments.
Finding the right match for your household is the most challenging part of having roommates. You will go through a few tenants before discovering the right fit.
However, once you get the right tenant, it is the easiest money you will ever make. Please ensure you are investing or saving your income from roommates.
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There is no worse feeling than having roommates for years and nothing to show. I recommend investing in dividends because, eventually, your dividend income can replace the income you receive from roommates.
For example, we made $1,600/month from roommates from 2020 through 2022. Now we make $1,600/month in dividends—no need for roommates.
Sharing your stuff. There are even more options to earn rental income outside of properties and roommates.
You can rent your car in Turo. My friend makes over $1,000 per month renting her minivan on Turo.
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We live in the sharing economy; you only need to be willing to share your things. However, this tends to be what prevents people from earning rental income.
Letting go of your things. To earn rental income, you must remove your attachment to “things” and “stuff.”
The purpose of these things is to earn income so you can enjoy time with your family. Your life shouldn’t be about accumulating more and more stuff but more memories with loved ones.
If you struggle to let things go, read “The Life-Changing Magic of Tidying Up” by Marie Kondo. It will help you build the proper perspective on owning and releasing certain things.
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If you can adjust to the concept of lending people your things, you can make a lot of money renting to others. It is a different mindset that can help you beat inflation and enjoy your time more.
An excellent place to start. A good place to start could be renting your garage or buying a storage shed and renting it to others.
Or you can build a little dog park in your yard. Many folks would like a private place for their dogs to play.
Maybe your house is close to a busy street, and you can create a billboard to earn rental income from advertisers.
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Conclusion. The possibilities are endless, but you must learn to see these opportunities. Reading books is the best way to envision this new world of money.
Most of us only know how to work for money, but the world is so much bigger than that. That’s why the rich keep getting richer—they are not waiting on a pay raise from their boss.
The rich create their own paychecks by buying multiple cars for Turo and paying someone to run their business.
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They buy rental properties and place them on Airbnb. They build community farms where they can sell fruits directly to consumers.
In short, they take their financial futures into their own hands. You can do the same, but it starts with sharing and helping others.
The golden rule is “The more people you serve, the richer you become.” Once you understand this philosophy, you’ll be off to the races. 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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