If you want income that is not totally based on your performance you need to move to Level Two, which involves income that works for you!
Let’s review the priorities for income:
1. Tithe/offerings.
2. Saving
3. Living expenses
4. Asset building.
5. Seed for investing
6. Foundation wealth
Level Two concerns asset income. Income from an asset that produces income for you. First of all let me stress that your home is not an asset. Why? Because it is draining finances from you. I did an entire blog on this earlier this year. I will not get into more detail on this.
You cannot develop assets if you have not saved. Before developing assets, you need to have 3-6 months of living expenses put aside to weather any type of economic challenge you might face, such as the loss of your primary income.
Asset development can include investments, managed income, and income not worked for. Developing Level Two income requires focused attention to the following:
1. Eliminating all consumer debt.
2. Acquiring assets-things you own that create income:
a) Businesses
b) Real Estate
c) Stocks, bonds, mutual funds
3. First priority is income coming in after all expenses.
4. Appreciation is secondary.
5. Replace employment income.
6. Insure acceleration of capital
We need to leverage something. Some people leverage real estate, some money, some people, some businesses. You need to choose something to leverage. Consumer debt is negative leverage. You are the one being leveraged against.
These will be discussed in more detail. Remember:
1. Pay God.
2. Pay yourself.
3. Pay everyone else.
Jacques
CreatingWealthThatLasts
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