How to Build Passive Income
My son, Josh Mettle, just interviewed me for his Physician Financial Success Podcast on iTunes. I hope you give it a listen while you’re walking your dog, hiking or traveling up the coast 🙂 You will learn (among other things):
- The kind of stuff they never teach you in real estate school.
- What I learned from Donald Trump about picking up great properties.
- How to bootstrap your way into income property investment.
- How to weather the storm when markets move from good to bad to good again.
- How to retire with cash flow.
- How to start!
If you have a secret desire to bridge from the billable hour to passive income for life, this may help you get started. Enjoy!
How to Build Passive Income Streams
My son and investment partner, Josh Mettle, has a new podcast: Physician Financial Success, which teaches physicians how to avoid financial landmines. Dr. David Phelps teaches professionals how to stop trading time for dollars and transition from earned income to passive income. The two of them got together for this really great podcast.
I’m a “retired” attorney, which makes me kind of an odd bird. When I got ready to retire, I then had a full time crazy-busy law practice and I co-owned and self-managed 70 houses and apartment units in my “spare time” with the help of my daughter-in-law. I called the Bar and asked if there was some kind of a checklist or roadmap for how to wrap up a practice and retire. Apparently, attorneys don’t retire, they just have heart attacks and die. I wanted to skip that part! So I had to invent my own off-ramp.
Dr. David Phelps seems to have systemized it.
If you have a secret desire to transition from the billable hour to passive income, it’s worth 30 minutes to listen to these two smart investors discuss the process.
It’s like dessert without the calories!
P.S. You can sign up for Josh’s new podcast at iTunes if you want to hear more great investment advice while you walk your dog or commute to work 🙂
Ordinary Income vs. Capital Gains
It often pays to “venture” outside of your area of expertise and inspect the thoughts of other professionals. Fred Wilson is an investor, venture capitalist and professional blogger living in NYC. On May 2, 2011, he posted a blog about the difference between ordinary income vs. capital gains which is really worth reading for income property investors:
“Today, I’d like to talk about ordinary income vs capital gains. This is not tax advice. I am not a tax lawyer or a tax accountant. I hope both tax lawyers and tax accountants show up in the comments as this is important and complicated stuff.
When you think about the various ways you can make money, two ways predominate. You can provide services to others and get paid for those services. That is ordinary income. And you can invest in something; shares of stock, a building, a domain, and then sell it later for more. That is a capital gain.
The distinction is important, at least in the US, because these two kinds of income are taxed differently. Ordinary income is taxed at the full federal, state, and local tax rates. We live in NYC and according to our accountants, we pay a marginal fully loaded tax rate of 47.62%. That means we keep about half of the ordinary income [my wife] and I generate. More…