How Can I Invest to Create Passive Income Streams?

Speaker A00:00:00

I bet you heard about all those people making millions while they sleep. Listen, if you spend any time on social media and bam, you see all these latest trends and maybe, like me, you wonder.Ralph, is this something really that I can do? Let me start by sharing some interesting statistics. And I want to thank Abby, my producer, for finding these.They are really interesting things because a lot of people think passive income. They're like, well, Ralph, that's for the wealthy people. Or that's for the people who've arrived. But this is what really interesting.53% of Americans. Yeah, 53% already have at least one passive income stream. I gotta be honest with you, I was kind of surprised by that. But listen to this next one.And this one was really amazing to me. $4200 a year is what the average median passive income is for most people in the US Now. That includes dividends, interest, rents.So I was like, wow, a lot of people already doing this. And which led me to this quick tip. And I always want to start this show with a quick tip. This is a quick win for you. Great statistic here.20 to 30% of people were able to grow more wealth if they kept their dividends invested. Now we'll talk about that in another show. What dividends are. But they're basically the income you get from stocks.But think about, that's a quick win right there. So if you're an investor in dividends, 20 to 30% more wealth is derived by reinvesting those dividends.And that leads us to this great question from one of our loyal listeners. And I was so happy when I got this question. Ralph, I keep hearing about passive income. How can I actually build it through investing? Great question.And the truth is, many people don't really understand.In fact, Abby and I were talking before we hit the record button, and she says, ralph, I hear about this passive stuff on social media all the time, but I don't know necessarily understand what it is. And as we talked about, we all understand the idea. If we work, we make income, we get paid. Yeah, that's pretty straightforward.But let me ask you this question. What if money could work for you? That's right, you'd be the boss. Imagine this. You're the boss of your own money. And guess what?It is absolutely possible they may be saying, ralph, why are you talking about passive income? Well, here's what I'm talking about. It's so important because it brings some amazing thing. It brings freedom, it brings flexibility.And listen, if you do it right, it makes a huge impact on your financial life. So today we're going to skip that Instagram hype, we're going to tune out social media and we're going to get really practical.And today I'm going to show you real attainable investing strategies to help you build passive income and more importantly than that, build confidence in your financial future. Are you ready to be your own boss today? Well, let's get started.This is Financially Confident Christian, your daily dose of gospel, grounded insight and faith driven tips to help you break the cycle of financial shame with confidence. Welcome to the show. I'm Ralph. I'm so happy that you've chosen to give me just a little bit of your time today.And we're in the final week of our 30 day investment series.Man, we have talked about all kinds of things related to investments and if you missed any, any of the shows, you can get all of our shows by going to financiallyconfidentchristian.com and specifically yesterday we talked about breaking that piggy bank and Abby and I shared our own little piggy bank story. So if you missed that one, I'm going to encourage you to go check it out. And you might be saying, ralph, okay, that sounds good.You're an accountant, you do some financial work. But how do you qualify to be involved in telling me about passive income? The truth is I've worked with clients for over 30 years.It makes me feel old when I say that, to be honest with you. But I've seen how clients have benefited from these multiple streams of income to really build that long term stability.And that's what we're talking about. If you want to encapsulate what this whole investment series has been, it's not been about quick wins.It's not been about going to the casino and pulling that slot machine real. That's not what we've been talking about.We've been talking about building long term stability and this passive investment, these passive income things can bring you that freedom and opportunities. And here's the reason.The big takeaway for today, it helps you be more generous because a lot of people have said to me, we've gotten a couple emails since we started this series. Ralph, it seems like you're really tying into greed in this series. Not at all.What I'm talking about is building financial freedom, breaking that cycle that so many people feel of that financial shame and finally giving you confidence. Which leads me to a client story. I had this one particular client, started working with this client when they were really young.They had just Gotten out of college, they were just getting established and I laid into them. I said, listen, here's a great idea for you. Take just a little bit of money. In fact, I think at that point he was doing $25 a month.I said, I just want you to go find a broker and start doing some investing and buy some dividend paying stocks. Doesn't have to be anything big or anything elaborate like that. And build that extra monthly income stream.This wasn't flashy, this wasn't some, oh, I heard around the water cooler, I'm going to make a mint if I buy this stock. That's not what it was at all, but it was something that was consistent.It's something that added to his income and budget so that he could gain that financial freedom over time. And I love what Warren Buffett once said. He said, if you don't find a way to make money while you sleep, you will work until you die.Hey, that's a great quote, isn't it? But Warren Buffett nails it. If you don't find a way to make money while you sleep. That's what we're talking about here with passive income.We're really talking about putting your money to work even when your head's on the pillow at night. Because if you don't do that, guess what? You're going to work until the day you die. And listen, passive income isn't magic.I'm not talking about some magic tricks, Houdini pulling a rabbit out of a hat. It's the result of steady planning. Which means I really need to break down some myths right now.So many people see these knuckleheads or on social media, Instagram, TikTok, oh, you know, you can make a million dollars overnight while you sleep. Just send me 10 bucks. Guess what? You're going to send them 10 bucks. You're going to get nothing back.Because a lot of people have this belief, this social media hype, and I want you to watch out for that. They believe that passive income means instant money while you sleep.You know, you go to bed tonight, tomorrow morning you wake up and you're rich beyond measure. It's not going to work like that in reality. It takes discipline, it takes time and it takes patience.And here's a lot of thing a lot of people don't think about. A lot of people say, well, passive income means there's no effort in it. No, not at all. You gotta really understand what you're investing in.It's just not tied to the hours that you work. So let me ask you just a few questions. Do you want to chase those get rich quick schemes? Listen, I've talked to people.They say, Ralph, that's exactly what I want to do. I want to make a million dollars overnight. Well, this isn't to show for you, so click off now. Go find somebody else that's going to lie to you.That's not what I do here. Or do you want to build lasting financial confidence, something that's going to withstand the test of time? Let me ask you this question.Would you rather have unpredictable side hustle income or dividends that keep showing up year after year? See, a lot of people say, well, Ralph, I. I'm going to go get that side hustle. I'm going to do this, I'm going to do that.I'm going to be a photographer. I'm going to be a wedding planner. I encourage you to do those things. But the truth is those things are unpredictable.You never know if you're going to be able to make money with that. But dividends, stocks and things like that, these passive incomes, if you do it right, they will show up for you year after year.So let me give you some basic passive income ideas. And when I was preparing for the show, I. I didn't think about how simple these things really are. We've alluded to this one a couple times.Dividends from stocks. Let me drill into that just a little bit. The way dividends work is when you buy company stock, the company shares a part of their profits with you.For example, let's say you have $100,000 in stocks. Now, that's a lot of money, but I just throw it out there because it's easy to see this mental math picture.If you have $100,000 in stocks and let's say the company's giving you a 3% yield or a 3% dividend, think about this. You're going to earn $3,000 a year. All you're doing is staying invested in that company. And that's a steady way to build wealth over time.Now, maybe you're not big into the stock market. Well, you can do it with bonds, you can do it with certificates of deposits.As we talked about on the show a couple weeks back, when you buy these things, there's lower returns because there's lower risk. They're more predictable. When you put that money in that CD every month, guess what? The bank is going to put interest in your account.When you get to the end of what's called the maturity, you're Going to have more money than when you started. Again, it's not flashy, but it's reliable. Now, we also talked about real estate investments. I'm not going to get too deep into those details.But rental properties, those are great passive incomes. There's some active when you go find the property, get the property ready for rent.But once it's set up and once it's being rented, that can grow into a large income source. I work with clients that have many, many rental properties. It's a huge thing. Maybe you're not. You don't have the stomach for the rental properties.You can do those REITs that we talked about, that that's basically rental properties that are handled like stocks. And listen, some of those pay 3 to 5% of your investment every year. Again, while you're sleeping, that REIT is giving you back income.And we hit this one a little bit a couple weeks ago. That's index funds and ETFs. Those are also great passive income streams.Remember, they're like baskets of different stocks, so you're not playing one individual stock. The beauty to them, as I talked about before, is they've got lower fees and they spread out that risk.But that's something else that you can buy and let them grow over time. You might be saying, great, great, Ralph, I want to do this, but how do I effectively do it?So here's your one action step today of how to build this. You don't have to be a mega investor. You can start small. You can open a brokerage account with 20 bucks. It's really that simple.You can just go and find that account, put $20 a month into it, start buying some of these dividend paying ETFs. Once you do that, here's one of my little tricks. Automate that process. A lot of people will do that first investment, then they never do it again.Reinvest those dividends as I talked about. That's a great tip. But, but automate the process.Set it up so that whenever you get your paycheck automatically, you put that money into retirement or into that investment plan. It's a great way to automate that. And as we talked about a couple weeks ago, make sure you're diversifying this. We did a show about that.You could check that out in our archive as well. But mixed stocks, mixed bonds and REITs, you don't have to be a super market investment genius to do this.There are some great funds out there that do this. But bigger than all those things, you really need to take a second and think about shifting your mindset.Because so many people hear passive income, they're like, oh, this is great. I'm going to quit my job next week. I'm not going to have to work again. Doesn't work that way.But if you take that consistent ability to build that plan, what it does do, over time, it creates financial breathing room. I thought this was a great analogy. Think of passive income not as an escape hatch, but it's not going to pop open, you're going to fly out.But it's a safety net that grows stronger year after year. Well, let's get into the Bible. Today I found this verse from the book of Ecclesiastes. Now that's a big word to use.One of my favorite books of the Bible, though, Ecclesiastes, chapter 11, verse 6. And this one just nails exactly what I'm talking about again. Ecclesiastes 11:6.Sow your seed in the morning and at the evening let your hands not be idle, for you do not know which will succeed, whether this or that or whether both will do equally well. Let's unwind that a bit. Sow that seed in the morning. Plant those investments, plant those things in that passive thing.But again, what's the Bible telling us? Don't quit working. Right? It's not telling us to quit working. It says don't let your hands be idle because both things.You don't know which is going to work out better, this or that or maybe what is the Bible telling us? Maybe they'll both do equally well. Why about we pray together right now?Father, we come to you right now and we're a little bit confused sometimes with all the jargon and the things coming at us from all directions. These get rich quick schemes and his passive income. So, Lord, right now we just ask you for wisdom.Help us to understand how to build these multiple income streams, Lord. Give us guidance. Show us to use this passive income not for our own greedy purposes, but. But to build the kingdom of God for good purposes.We just thank you, Lord, for the creativity and the opportunities that you put right in front of us to grow these resources in our everyday lives. And we just thank you and we praise you, Lord. We ask this in confidence in the name of Jesus. Amen. All right, one more action item.I want you to just choose one passive income stream this week, whether it be a dividend, a reit, or some bond fund, and write a goal for yourself. We talk about on my show what gets measured gets done. Write that goal. And like I said it doesn't have to be a ton of money.Start small but make that commitment for the long term. Because remember this passive income is money working for you. Guess what? You're the boss. Dividends, bonds, rentals, REITs are all practical options.And again, remember it's not magic. Planning and wisdom are required, but what you'll find in the end is freedom comes from multiple streams and faith filled stewardship.Again, it's not quick cash, it's confidence. It shows your money works for you and that anyone can start with just $25 a month. Are you encouraged by that? I don't know about you, but I am.Well, tomorrow we're going to continue in our financial series and we're going to talk about what's a financial advisor and do I need one for investing? That's a great question and it's something that we hear all kinds of pros and cons about.But I'm going to break it down on the show tomorrow and really show to you why I think you might want to consider having one of those financial investors. So here's my charge for you today. I would love for you to spread the word about this show. I feel like we're making an impact.I hope you feel the same way too. Share it with a friend, post it online, invite others to come and listen to what we talk about. We talk about hope here.We talk about breaking that cycle of financial shame. The more we can grow together, the more impact we can make. Just send them to our website. That's Financially Confident Christian.Again, that's financiallyconfidentChristian.com because you never know, your share may just be the thing that they need to finally break free of that financial shame. Let me end with this. True financial confidence isn't about chasing a side hustle that you hate.It's about knowing your investments are quietly building freedom for you. So go out there today and be a financially confident Christian. Stay financially savvy, keep trusting God with your resources.And I just want to thank you right now for being part of Journey. God bless you and you have a great day today.