Hi this is Diane Kennedy. Today is Day 10 of the 30-day Coundown to the release of my new book, The Maui Millionaires™ that I co-wrote the book with David Finkel. The book is scheduled to be released on November 3, 2006, and from now until then I’ll be checking in every day with a Wealth Tip excerpt from the book, written either by myself or by my co-author, David Finkel.
Wealth Tip 10: Focus a portion of your Wealth Building Efforts on Creating Passive, RESIDUAL Income
Residual cash flow is money that flows to you again and again. This could be the monthly cash flow you enjoy from a commercial building you own that is managed by a professional management company. This could be quarterly distributions you earn from a passive interest you own in a business partnership. This could be dividends you enjoy from publicly traded securities. The key distinction is that residual cash flow is an income stream that flows to you over and over again.
In my personal wealth building this has meant monthly cash flow from commercial real estate, interest payments I receive from first and second mortgages I own, and the cash flow I enjoy from Level Three businesses I own which require less than 10 hours per month of my personal time to run.
Where are you putting a portion of your wealth building energy into in order to create passive, residual income? The answers you come up with will ultimately have a larger impact on your becoming financially free than any amount of active “earned income” you’ll likely to generate.
For more on the three types of cash flow and creating passive income see The Maui Millionaires™ pp. 167-190.