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Questions about Passive Money System from TFL Book...

Discussion in 'Progress/Execution Threads' started by EvanOkanagan, Aug 16, 2013.

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  1. EvanOkanagan
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    EvanOkanagan Gold Contributor FASTLANE INSIDER Speedway Pass Summit Attendee

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    Hey guys,

    I just went through my business system & money system targets from TFL book and I really like the idea. My question is though, is it counter-productive to put money away at, say 5-7% interest when I could be using that money as leverage, or putting it in investments that yield a 30-40% return?

    I really like the idea of having an account and watching it grow, especially with an end goal in mind to shoot for. The trouble I'm having is deciding if it would slow down my speed to get there if I don't invest in higher yields or use it as leverage in a business system.

    Can any fastlaners tell me if they have this account set up? What are your thoughts?
     
  2. Vigilante
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    Vigilante Legendary Contributor Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    27? You can make and lose and rebuild a fortune 10 times if you had to. Low risk low yield is for grandpas. Live a little.

    [video=youtube;7WS6C-TuMHA]http://www.youtube.com/watch?v=7WS6C-TuMHA[/video]
     
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  3. EvanOkanagan
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    EvanOkanagan Gold Contributor FASTLANE INSIDER Speedway Pass Summit Attendee

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    Haha agreed low risk low yield is for grandpas! I'm trying to grasp this part in the book and wondering about MJ's philosophy for doing this.
     
  4. Eskil
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    Eskil Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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  5. timmy
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    timmy Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Thank you sir very much..
     
  6. socaldude
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    socaldude Gold Contributor Read Millionaire Fastlane Speedway Pass

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    You know whats counter productive? Losing 50% of the principal. At 1 million dollars you will lose 500k!. Ouch.

    Trying to turn 1 million into 2 million in the markets is no different than trying to turn 10k into 20k.

    Trust me i've been there. WTF does it matter if I make 3k one month but lose 5k 3 months later?

    At 30-40% yields we are now at sky high financial risks. No different than playing russian roulette or speeding on the freeway at 120 MPH.


    Read any financial newspaper: Barrons, WSJ, Forbes etc. and you will see that the rich use the markets for safe income and liquidity not to get 50% returns or get rich.

    The same way your grandpa puts 500k into a bond fund and retire is the same way a 17 year old kid or 30 year old can do.

    You wanna know what made me a better trader and investor? Realizing that I was CHASING MONEY. Not repackaging value or creating it via marketable investments. I was better off going to the casino blackjack tables.

    As an investor or trader your goal is to CREATE VALUE. When you buy equity privately or publicly you create value via working assets and if you buy debt you create value via money's intrinsic scarcity and time value via interest. Chasing money means you will never make money. It's a catch-22. This is probably the biggest reason why some people will never get rich; they don't understand how or why wealth or money is created or why money is transfered between parties.
     
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  7. socaldude
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    socaldude Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Look at it this way:

    One of the hardest things you will ever do as an entrepreneur is to raise money.

    Why?

    Look at it from the investors perspective.

    Will they get their money back? Will they make a return?

    They think about this in terms of your ability to create value. Your ability to execute.

    Notice how much scrutiny and investigation is involved?

    Your doing the complete opposite. Anybody who promises a 40% return I will just hand over the money and hope and pray. No analysis, no value, no nothing!
     
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  8. EvanOkanagan
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    EvanOkanagan Gold Contributor FASTLANE INSIDER Speedway Pass Summit Attendee

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    I appreciate all the feedback. The 30-40% returns I'm referring to are rent-to-own investments where I would receive a large initial deposit from the renter (usually 25k-50k non-refundable) that ensures they'll fulfil the term or they forfeit all of this money and I keep the house.

    I think I might have asked the question differently than I wanted to though.... I was more meaning, would it not be wiser to put back this money into building your business system than putting towards an investment account? Or would you wait until your business is flowing heavy cash and THEN start this investment account? This is all referring to the chapter in TMF on building a passive money system. MJ states you should start an account from wherever you are and keep building that until you hit your ultimate number.

    A lot of people will have different opinions about this, and I definitely appreciate any input. I'm curious though of the idea of putting aside a 40-40-20 split from the start vs putting nearly all the money back into your system.