Make These 3 Investments And Never Worry About Money Again

what's up everybody I am just bit Singh and there are some Investments your car that eat up all of your money and then there are some Investments real estate that put more money in your pocket the reason why you invest your money is so you can be financially free and do the things that you want without having to worry about money but all Investments don't work the same if you really never want to have to worry about money again you need three different types of Investments you need an investment that's going to pay you with income you need an investment that's going to give you growth of your wealth and then you need an investment that's going to protect your money so what I want to today is go over the three Investments that you need to make that way you don't have to worry about money ever again starting with number one which is investing in real estate for income traditionally when people talk about making a passive investment for income they talk about investing their money into the stock market into a dividend paying company so you look for a company like McDonald's that's been paying a good dividend you invest your money into McDonald's and then every quarter McDonald's is going to give you a dividend check but I prefer real estate rental income and I'm going to show you why real estate is the best place to generate passive cash flow the way it works is you can go out and buy a property this can be a house this can be an apartment building this can be a mixed use building you go out and you buy this property this building and then you're going to lease it out to somebody else who's going to use your building so in this case we'll use a house and now I'm going to lease it out to this nice person with a mustache with his wife who has a braid or as we like to call it in my native language Punjabi a good this nice couple live in my home now in exchange for them living in my home and using my home they're going to pay me $1,500 a month every single month for living in this property I don't have to do any work after they move into the property because now I already own the asset I'll give you another example of this the minority mindset company's office right here is two flors and I pay $4,300 a month to lease our office space so this is money going to the landlord I don't really see the landlord ever but I give him a check every single month and this is money that he uses to pay the mortgage for this building and put some money in his pocket every single month the reason why I say real estate is the best place to generate this type of passive cash flow is because for one if you do it right you're going to be able to rent it out to somebody else and this rent that you get is going to cover your expenses your taxes your insurance your maintenance your management fees and it's going to put some money in your pocket every single month and if you do it right you can hire property management company to deal with all the day-to-day work so if something goes wrong if the electricity stops working in this office I could just call up the property manager and then the prop manager will take care of the issue and the landlord won't even hear about it so I like real estate because of the cash flow that you can get and it can be pretty passive I'll explain why I say pretty passive in just a second but the second reason why I like real estate is because of the tax breaks that you get as a real estate investor now although I am a licensed attorney I'm not your attorney so if you have specific tax questions talk to a tax professional in your area but the IRS rule book gives Real Estate Investors some of the biggest and best tax breaks that our tax code has to to offer I'll show you what I mean so if I can rent out this home for $1,500 a month and let's assume for the sake of this example that my expenses are $11,000 a month to own this property that's my taxes my insurance my maintenance fees my management fees and my mortgage is $1,000 a month this means that every single month I get to put $500 worth of profit into my pocket this is the money that I get to put in my pocket which means every year I'm putting $6,000 into my pocket now generally when you make $6,000 you have to pay taxes on $6,000 but because this is real estate you get a little bit of a tax break you get to tell the IRS hey I made $6,000 this is the money that I put into my pocket but because my property is one year older I deserve a tax break so going back to this home let's assume that when you bought this home it was $20,000 for the land and $150,000 for the actual house now you will get to tell the IRS that because this property that I bought is one year older I deserve a $5500 tax break which means you put $6,000 in your pocket this is the money that's in your bank account but you only have to pay taxes on $500 this is your taxable income because you get to take this depreciation expense on your property you calculate this depreciation number based off how much you paid for the property but this is a paper depreciation it's a paper deduction meaning you take $6,000 put it into your pocket you can spend all this money but you only have to pay taxes on 500 this reduces your taxable income and your tax rate because your income is less this is the first reason why wealthy people love investing their money in real estate because you can make a ton of money and pay next to nothing in taxes legally because the tax code says so and the second reason why wealthy people love investing in real estate for the tax breaks is because well let me just show you so you bought this home for $170,000 you paid $150,000 for the building and $20,000 for the land a total cost of $170,000 now let's assume that you own this property for a number of years every single year you rent it out and every couple years you raise the rents meaning you make bigger profits and then some time goes by and you look at Zillow and you see oh I could sell my property for now $1. 7 million now this does have happen in some instances most of the time you're not going to see this type of exponential growth in just a few years but if you're invested in a good area where you see growing demand where people want to be you're going to see the prices of your real estate go up so assuming that this property value goes up from 170,000 to 1. 7 million and now you sell it well now you have a almost $1.

5 million gain which means you got to pay taxes on $1. 5 million now even if you have a low tax rate because investors get lower tax tax rates that's still a lot of money but real estate gives you another exception because now what you can do is you can take all of this money you take the $1. 7 million and you go out and you buy a bigger property let's assume that now you buy a bigger property with multiple units I clearly am not a good artist here but you go out and buy a bigger property with this $1.

7 million and this $ 1. 7 million property is going to pay you with more rent more profit because it's a bigger property and bigger tax breaks for depreciation deduction but now the advantage not only is that you own a bigger property but you don't have to pay any money in taxes today this is called a 1031 exchange it's called a like kind exchange you don't get this in the stock market but you get this in real estate where you can flip your property after one year you own the property for a year you can sell it for a profit flip it into a bigger property and pay $0 in taxes today and you can do this again and again and again keep flipping properties to a bigger and bigger and bigger deal and you can do this until you die and never have to pay a penny in taxes on these capital gains this is what wealthy people love doing with the real estate because you can just keep flipping into a bigger property every year or every couple years whenever you're ready you can just keep flipping the property into something bigger and you never have to pay taxes on those gains as long as you do this 1031 like kind exchange now again makees you talk to a professional an attorney a tax professional in your area that way you're doing this the right way because there's a lot of regulations that are involved with 1031 but this is one of the biggest loopholes for wealthy people because now once the numbers start to get bigger you just keep adding on zeros and you keep going into the bigger deals and the bigger deals and now your rental income goes up which means you have more cash flow to live off of the key here for one is this requires you to buy real estate not for you to live in yourself but for you to rent out to somebody else because now this becomes an investment that you're buying for the sole purpose of making money and second you have to understand your market and you have to understand the type of real estate that you want to buy I like residential real estate because this is a Innovation proof real estate we're always going to need a roof over our heads no matter how crazy the metaverse becomes which is why I like residential real estate we've seen retail real estate get hit so hard because of the digital Revolution we've seen office real estate get hard because of the pandemic and people working from home those two will keep going through Innovative shifts and they're going to be changing a lot but residential real estate we know that people will need a roof over their heads which is why I like single family homes which is why I like apartment complexes the last thing that I want to say regarding real estate is what determines a property that I want to buy because a couple things that I look for Beyond just a good area low crime growth in population young people wanting to live there once I have all that the other thing that I want to look for is the numbers and when I say the numbers a lot of times people get confused when they look at real estate because they say oh I can buy this property for $150,000 today and maybe in a few years I'll be able to sell it for $300,000 and if they think like that they'll be willing to overpay for the property because they have their eyes set on the future price appreciation all they're looking at is how much can I sell this property for in the future I don't do that when I buy real estate I don't care about what's going to happen to property values tomorrow or next month or next year the only thing that I care about is how much cash flow I'm going to get so remember my goal with real estate is cash flow I'm working to create income so when I invest in real estate I don't care about what's going on with property values what I'm looking for is a 7% cash on cash return on my money meaning for every dollar that I invest I'm going to make 7 cents in positive cash flow 7 cents in profit every single year if I invest $100,000 that's $7,000 a year in positive cash flow that's what I'm looking for so when I invest in real estate remember you have to understand your goal my goal is cash flow property values crash okay I'll go out and buy more I don't care because this is what I'm looking for I don't really care about that growth this is what I'm Investing For and if I do see a lot of growth in real estate prices well that's IC seeing on the cake now before I move on to number two if you are interested in learning more about investing your money in real estate I put together a onehour long class on how to make your first real estate investment you can watch this class for free on our Market insiders app it's an investing education app so if you want to watch my 1hour class on how to make your first real estate investment for free I'll put the link to how you can watch that class down in the description below the second place where you want to be investing so you don't have to worry about money is in businesses now the reason why I say in businesses is because this goal is to give you growth with real estate it was cash flow here when I invest in businesses I'm looking for growth and the reason why I say growth in businesses is because you have to look at how do you attract money the more value that you can provide the more money that you're going to make well when you go out and you buy a home or you buy an apartment complex the only way that you can really add more value to raise rents is if you renovate the units and if you make the home nicer but at the end of the day if the location isn't good you're not going to be able to raise rent significantly so you're ultimately dependent on the location which is why real estate is more of a passive way for you to generate that type of cash flow versus in business you can invest in companies that are working to produce more value you can invest into a company that way they can use your cash to hire more employees to innovate to create new products to sell more products because now the business is actively working to create more value and produce more revenue and make a bigger profit now there's a number of different ways that you can invest in business depending on your risk tolerance so I'm going to do it in order of least risky to most risky the least risky would be investing in the stock market now you're investing in established companies many times these are companies that are worth billions of dollars now of course you can see a stock go bankrupt you can see a stock go to zero but a stock that is on the stock market is less likely to go to zero than a startup that has less than $100 worth of sales the second which is a little bit riskier than the stock market would be investing into what I just said a startup a startup now is maybe you're investing into a smaller company a company that's working on raising their first million or 10 million or $100 million you can invest some money into the startup give them some money that way they have some cash to go out and grow and hopefully get bought out hopefully go public that way you can then liquidate your equity and make some more money this is what you see happen on Shark Tank where the Sharks the investors are investing into startup companies and they're hoping to see the startup companies grow and then you have the option of investing in your own business now I was really debating whether to put this here or this here because when you invest in your own business you're investing in yourself and at the end of the day you are your best investment which is one of the reasons why it might not be as risky of an investment but the reason why I put it here is because not everybody's meant to be an entrepreneur and you don't always know that until you go out and try to start your own business because starting your own business is tough you have to be very disciplined you have to be very creative you have to be able to do the things that a leader and entrepreneur does which isn't always very intuitive so that's why I put it here but another way that you can invest in business is just investing in yourself and creating your own business the reason why this is so important is because when you invest in businesses you get Equity Equity meaning ownership because that is the way that you build wealth in our economic system Equity is so important because it allows you to monetize on perceived value instead of just the value that you created so if you go to work every single day and you make $50,000 a year you only get $50,000 worth of value you're only getting $50,000 but if you're a company and you make $50,000 worth a profit your company might be worth half a million dollar 10 times the profit because now the equity the value of the company is worth a multiple of that profit so a way for you to out to capitalize on this perceived value this Equity game is by owning a piece of these companies now obviously you can invest in your own company where you work at or you can go to the stock market and invest in some of these companies this whole multiple valuation game is so powerful because it allows you to capitalize on this perceived value and allows you to capitalize on the growing values of companies that you believe in I made a video talking about this not too long ago but we live in a capitalist society and in a capitalist Society you can make money one of two ways you can make money from your labor which is you going to work every single day or you can make money from your Capital make money from your capital is when you invest in equity it says it in the name in a capitalist Society the way that wealthy people make the money is through their Capital more than from their labor so what you want to do if you're working to become wealthy is you need to use your labor as leverage to use that money that you earn to now go out and invest in equity that way you can put your Capital at work so you get your capital from your labor now you need to put your Capital to work by owning equity in the right companies that way you can get the growth of all the smart people working hard to grow your companies and there's three ways that you can do that you can invest in publicly traded stocks you can invest in startups or you can invest in your own business publicly traded stocks means a company is now on the stock market and anybody can go and buy and sell shares of this company so if you go and buy one share of Amazon you become one of the owners of Amazon if you buy one share of McDonald's you become one of the owners of McDonald's now you don't get to the company what to do with that small of ownership but you get to share in the profits because as these companies make more money and their profits grow well the share price goes up if they don't make as much money and their profits shrink and their companies go bust well then the share price of the company that you own will go down as well so there is risk associated with it you're never guaranteed to make money but if you invest in the right companies then you can make more money now the way that you invest is going to depend on you if you like the idea of studying companies and researching companies and reading their financials then you can go out and invest in individual companies I like doing that but if you're not interested in doing all the research and putting it all the time then you can just invest in some ETFs and exchange traded fund which gives the exposure to a basket a group of companies I do this as well so I have a path and strategy where every week I have money that's automatically being invested into a few different ETFs one ETF is giving me exposure to the S&P 500 which is the biggest 500 companies on the stock market as some ETFs they give me exposure to Innovation these are companies that are more along the lines of your technological startup companies that are trying to innovate and create new products and then I have some ETFs that give me exposure to Emerging Markets these are companies and countries that are overseas that are working to grow there to give you some protection in these ETFs so in my passive ETF investing system all I'm trying to do is just invest my money into these ETFs which give me broader exposure to a bunch of companies instead of me perfect trying to pick the right company and then in my active strategy I'm looking for the right company when I find a good price that's when come in and buy that way I can build My Equity but the whole goal here is for me to just accumulate more and more Equity over time by consistently putting in more money with startups it's a little bit different now you're investing in smaller companies that are trying to grow that are trying to get some sort of market share that way they could go on to the next stage of their business the risk here is when you're that small there's a bigger chance that you will fail but if you hit the right one now you can see an insane return on your money because if you can find the next Amazon or the next Uber before it becomes Amazon or Uber well now you can see a massive return on your money so higher risk and higher potential reward now there's a bunch of platforms on the internet that let you do this we funder Republic and start engine are just a few I've invested some of my own money onto companies on WE funder they're not sponsoring me they're not paying me to say this I'm just telling you some things that I've done so I've invested some of my own money into a couple companies on WE funder I've invested into a company called upcounsel and a couple others so I like this type of startup investing because I like entrepreneurship and I like taking on some of this risk and I like seeing these companies grow but you got to know you if you don't like that added risk then maybe this isn't for you and then you have the option to invest in your own business so earlier this year in 2022 I separated minority mindset from the companies and products that we had under minority mindset one of which is Market briefs Market briefs.