3 Easy Passive Income Producing Assets

In my early 20s when I began to learn about investing in passive income-producing assets like real estate, I remember being told that I needed at least $100,000 as a milestone before I got started.

For me, at that time, it simply wasn’t achievable.

I was earning maybe $60,000 per year and living pretty much paycheck to paycheck.

So, I of course, decided the recommendation of getting to $100,000 was wrong and began looking for ways to invest for passive income with less money.

I looked at 0% real estate opportunities, FHA loans where you live in a unit and rent out the others, finding private investors who would lend me their money since I didn’t have any of my own and many other things.

What I found was that each of these opportunities required a substantial amount of my attention or energy to find, establish and then manage and I divided the money I would make per year by the time I put into them, and I found that for the hours traded, I made more money with my active income sources.

Fortunately, I did that math, and I think that many people fail to because they are enamored by the idea of living lavishly with passive income and traveling the world while having money roll in.

I don’t actually know of a single person who does this successfully and based on almost 15 years of research and real-world experience, I don’t observe that it exists.

What is actually happening when someone pursues this plush, lavish, passive income lifestyle is they’ve taken the concept of retirement, which is not a concept the wealthy use, and they’re simply modifying it by trying to shorten the timeline.

People only retire when they are retreating from life. People only retreat from life when their purpose is not aligned with their money and their work.

And study after study shows that when someone retires, they get sick more and die younger.

For someone who really understands their purpose and understands money, they want nothing to do with retirement. Which means the idea of trying to “escape the rat race” is completely gone because like me, they’ve realized they will always trade their time for something and if they’re going to trade it for something, why not have it be something they enjoy? And why not has it be something that serves more than just you and your immediate family? And why not get paid for it? Do you see what I mean?

So, in my years of searching, I’ve come up with the passive income options for someone just starting out all the way up to the top where someone is financially independent already. I started at the bottom and am financially independent now which means I am a real-life example of the discoveries I am going to share.

The $10,000 — $25,000 Range:

I was right in my assessment of it being too hard for an average income earner to build up $100,000 to invest. If I had followed that advice, it would have taken me quite some time to get there.

So, at this range, the solution I found is called an Equity Indexed Annuity. An annuity is an insurance product that allows someone to deposit money into it and it gives the following benefits:

- Tax deferred growth

- Guarantees against loss

- No fees

- Growth based on real assets such as precious metals and real estate up in the 8–12% annual range (I don’t own the underlying assets, but I do get credited the growth of them)

- Passive income up to 10% per year of your account balance based on the performance of the assets each year

This is beautiful because it allows for smaller investors to start and it is very easy to do…plus you can spend basically 0 time managing it and you don’t need to worry about losses or volatility. This means in a good year you can make up to 8–12% and in a bad year where everyone else loses, you don’t.

The $25,000-$150,000 Range:

I have been an avid purchaser of precious metals for many years now. I love metals, but traditionally there are a few problems with them. First, they don’t pay any sort of income. Second, they need to be stored and that can be inconvenient. Third, to store them typically involves fees and that can make them a negative yielding asset. I bought them anyways for years and always made money and even figured out how to do cool things like borrow against them and use that money to invest in real estate while the metals still grow. But I discovered a solution called Precious Metals Leasing.

Precious Metals Leasing means that I buy physical gold or silver, but instead of storing it, I lease it out to a gold dealer or jeweler to help them fund their inventory. This is similar to a car dealership where they don’t actually own all of the cars on the lot. They finance them from the manufacturer and pay interest and that car is there as collateral so if the dealer doesn’t make their interest payment, the manufacturer can just take the car back. But when the dealer sells the car, they pay back the manufacturer for the value of the car. The same thing happens with metals, but in this equation I “own the car” as the manufacturer and the dealer pays me interest. But instead of a car, it is gold and silver. My gold is held as collateral, insured, and extensive financial audits are done with the dealers I lease to so I can limit my downside. The owners of the dealers also personally guarantee the lease, which means if they don’t pay me, I can foreclose on their personal assets as well to recuperate my gold if needed.

Here are some of the benefits of Precious Metals Leasing:

- I own physical gold and silver, which I believe is really important in today’s economy

- Gold and silver both grow 8–12% per year historically over the long range and I capture 100% of that upside

- I have no storage costs

- I can earn an additional 2–4% in lease income on top of the growth of gold

- My lease income is paid in gold and silver

What I love about this is that in a down year where most people would lose money on gold and silver, I still earn my lease income. In an up year where gold and silver do really well, I get the full upside, plus my lease income. It’s a win-win!

$150,000+ Range:

For those that have $150,000 or more to invest, in this range I’ve discovered turnkey seller-finance real estate.

Turnkey means 100% of the work is outsourced so I can remain passive. In this case, there is a management company I use that handles all of the heavy lifting for me on what I’m about to describe.

This basically means that I buy single family homes as is from bulk rental or foreclosure portfolios. The management company finds the homes, purchases them for me, cleans them up so they’re sellable, and also places them in a series of trusts to keep me protected and anonymous as an investor.

The management company then finds qualified families who will live in the homes and execute a private mortgage with me. This is known as a land-contract and is similar to “rent-to-own”. This makes it so that I’m not a landlord and each month I simply collect my mortgage payment the way a bank would.

The management company collects the payments for me and manages the relationship with the family. They also handle any necessary foreclosures and place new families as needed.

With $150,000 I can start with 3 homes at $50,000 each. After that, I can continue buying with just 1 home at a time, which is around $50,000, but initially I start with 3 because each home can take anywhere from 3–18 months to get fixed up and occupied with the right family. Having 3 diversifies me out of vacancy when I start.

Here are the benefits of Turnkey Seller-Finance:

- I own real estate and land

- I am completely anonymous

- I get to be the bank, which makes me as passive as possible

- I resell the home to the family for 10–30% more than I paid for it, which gives me an instant equity gain in the first year

- I charge 12% annual interest on a 20-year mortgage, and it is solely based on the family being able to pay me

- I can own homes all across the U.S. via private mortgages just like the banks do

Single family homes have been around forever and will continue to. But because with these homes, I am dealing with lower income families, the demand will never go away. Anyone who is low income and renting would LOVE to be a homeowner. I don’t have to be a landlord. The families will never contact me or bother me. And I sign 20-year mortgages, so I don’t need to worry about repairing and turning over rental units every 6–24 months.

Here is the reality. You don’t need tons of investment options. You need a few reliable ones that aren’t going anywhere.

Annuities have been around for a very long time and the company I use for this one has a track record of almost 200 years.

Gold and silver have a 6,000-year track record.

Single family real estate has been around for thousands of years as well.

These assets require almost none of my time. They pay me passive income. And they work at all levels of financial growth.

I hope this article gives you some solid ideas and if you’re interested in learning about any of these, reach out to me and my team.

In closing, my mission in life is to help good people build more wealth who make the world a better place.

So, if you’re a good person who wants to help make the world a better place and this article helped you, I want to encourage you to start planning your next quarterly trip and putting this into practice. And feel free to write to me and let me know how it went.

If you’re a client of mine and you’d like help leveling up, send an email to my team with “Level Up” in the subject line to Contact@WealthDynamX.com.

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The Blueprint to Financial Freedom by Jerry Fetta

To Purpose, Wealth & Freedom,

Jerry Fetta

Jerry Fetta is the CEO and Founder of Wealth DynamX. He is a nationally recognized financial expert featured in Forbes, Yahoo Finance, Fox, Chicago Weekly News, New York Finance, interviewed on 100+ podcasts with world renowned experts, earning endorsements and affiliations throughout his career with names like Kevin O’Leary, Grant Cardone, Dave Ramsey, and Pamela Yellen.

Jerry’s mission in life is to help create millions of financially educated and solvent families achieving greater financial freedom and sharing the truth about money with those around them.

Learn more at www.WealthDynamX.com

(DISCLAIMER: The information in this content should not be considered tax, financial, investment, or any kind of professional advice. Only a professional diagnosis of your specific situation can determine which strategies are appropriate for your needs. Wealth DynamX can and does not provide advice unless/until engaged by you.)