Retirement Part Three

I left my last post kind of hanging for a reason. I do not know about you cokes but when someone tells me that I am too old or not smart enough it is like waving a red flag in front of a bull. I get stubborn and make it a point that I will show them, who ever they are that I can build a business or do what ever, just get out of my way I am coming through.

The first thing I learned was that there are two types of income.

Active income is described as trading hours for dollars. This is the way that 80% of all of all people today make their income.

Passive Income is best described by examples, income from property rentals, investment income, pension income, to name just a few. The rich of the world acquire most of their income from passive income the same as we do from our pensions, the only difference is that their income is a lot more than ours.

Wealthy people learn to work smarter not harder. I heard that statement repeated over and over through out my working career, applied it to what I was doing at the time and missed the whole concept. Who ever came up with the concept of working smarter not harder had to have seen the true way of creating a business and wealth.

I bought an existing business back in 1974. I was young and figured I new everything. I was able to make a successful business but, in actual fact the income I generated was mostly active income. I was trading my hours for money, I had to work more hours to make the business successful. I ended up having to hire a couple of people just so that I was able to work more hours doing the business. To be honest at the time I had no idea that I was actually generating more income with the help of my employees. All I could see was that the employees were an expense to my business. As I look back at it today I think how stupid my reasoning was. Today I would not make that mistake, other mistakes, well that is something else.

Building a business that generates a passive income to the owner the answer to creating wealth. But everyone does not see wealth the same. For a wealthy person that makes over say $15,000.00 per month an extra $1,000.00 per month isn't all that much, but to someone on a small monthly pension a $1,000.00 is a great deal of money.

Each and every person that decides they would like to have more money each month has to sit down and decide exactly how much money the want and then make a decision as to what they want to do to accomplish this.

A lot of people get scared when they think about starting a business because they do not understand what a business is. Business is nothing more than a game where people evaluate their success by the amount of money they can accumulate.

How many of you have played the game of Monopoly? For those that may have forgotten how it is played. Basically it is a game of business where each player tries to end up with all the money, you know just like Bill Gates. The US government probably had to print more money because of him.

Until my next post keep on keeping on.