5 Way To Convert Earned Income to Cash Flow
Earning income, cashing a paycheck, closing a large deal and getting a big bonus all feel great! There is a lot of security in a paycheck, there's a surge of dopamine when you close a big deal, and it just feels good to get paid for your effort. However, once you spend that money on a new car, a new house, or a night out in Vegas and you have to go back to work to replace that win with another win, you're stuck.
When you're working for your money, you have a one-to-one earning ratio. If you stop working, you stop earning. We want to show you how to increase your earning ratio so you're able to offset your earned income.
While there are a multitude of strategies to end the cycle of being caught in the rat race, we're going to give you 5 easy to implement. At Ridgeline Investment Group, we specialize in real estate investments that produce income.
While the list below is certainly not an exhaustive list, these are typically the most accessible and easiest 'passive' investments in real estate. And while they're all considered 'passive', we've ranked them in order of active to passive since some still require more effort than others.
Rent out a property: One way to generate passive income with real estate is to purchase a property and rent it out to tenants. This can be a residential property, such as a single-family home or an apartment building, or a commercial property, such as an office building or retail space. This option involves actively managing a property and ensuring that it is well-maintained and occupied by tenants.
Invest in a vacation rental: Similar to the first option, investing in a vacation rental, such as a beach house or a ski chalet, involves actively managing the property and ensuring that it is well-maintained and rented out to guests. This can be a good way to generate passive income during the times of the year when the property is not being used by you.
Invest in a real estate investment trust (REIT): A REIT is a company that owns and manages a portfolio of income-generating real estate properties. By investing in a REIT, you can earn passive income through dividends and capital appreciation.
Purchase real estate notes: Another option is to purchase real estate notes, which are essentially mortgage loans that have been sold by the lender to an investor. By purchasing a real estate note, you can earn passive income through the interest paid on the loan.
Participate in a real estate syndication/fund. You literally put your money in and wait for the distributions. As a limited partner, you are not required or expected to participate in the active management of the property. This can be a way to earn passive income through rental income and property appreciation.
By investing your active income into one or more of the strategies above, you will start to offset your active income with passive income and you can make work optional!
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About the Author
Randal is the founder of Ridgeline Investment Group, a real estate investment firm specialized in acquiring and operating multifamily assets. At Ridgeline Investment
Group, Randal helps investors grow their wealth and achieve double-digit returns by investing alongside him in exclusive multifamily deals they usually don't have access to.
Randal is the host of Agents Building Cashflow, a podcast focused on helping real estate professionals grow their passive income through alternative investments such as syndications and funds targeting multifamily assets.
He started his career as a single family real estate investor where he flipped over 500 properties. He’s been a licensed real estate Broker for 10+ years and has recently been featured in Forbes. He’s a member of the Urban Land Institute where he sits on the ULI Next and ULI Neighborhood Development committees. He’s committed to entrepreneurship and works with local business owners as a volunteer mentor with SCORE. Randal is an experienced entrepreneur who has helped build and scale multiple companies.
Randal holds a BA in Political Economy from Tulane University in New Orleans.
You can read more about Ridgeline Investment Group at www.ridgelineig.com and you can connect with Randal on LinkedIn here.