Passive Income overview 9/5/18

Passive Income is all the rage these days, with ecommerce blowing up, YouTube, podcasts, blogs, investing etc. there are lots of reason why it should be something to think about. Let’ s dive into it and see what it is all about!

Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it. (Wikipedia)

That sounds amazing! Minimal to no effort and receiving cash from it, but its not quite that simple. Passive income often requires either initial upfront energy, effort, and time or initial upfront cash.

My expertise is with the initial upfront cash portion, so we’ll get into that. I have been collecting data on my passive income for over a year now. I currently receive passive income in the form of interest payments from Lending Club, my savings account, stock dividends, stock interest payments, and I guess money saving apps as well. I won’t go into that last one in depth as I am saving that for an article in the future. Hopefully if you’ve been following me for awhile or are at all familiar with investing you understand what a stock dividend is. Essentially you own a dividend paying stock a every quarter or for every month you receive a little gift from the company in the form of a monetary payout for being their stockholder. I also receive some interest payments from my stocks when people short the stocks I own. Between my savings account interest, stock interest, dividends from both Robinhood and Stash I have received $186.37 this year. Not too shabby most would say, but this does come at a price to the tune of ~$12,500 invested in the above-mentioned platforms. The other vehicle I use for passive income is Lending Club. Currently I have received $233.74 in interest payments this year through that platform and that is to the tune of about $4,000 ish invested. A little calculator work later and we are at $420.11 this year in passive income, or about $46.68 per month.

I’m proud of that number to say the least but there’s more to come and in fact my goal for 2018 was to make $1,000 in passive income this year. There is still along way to go to reach that $1,000 mark and less than 3 months till the ball drops and we are standing in 2019.

My plan to get there is already in the works, I have a sizeable position building in Lending Club, in fact there is quite a lot of notes (loans) that haven’t paid me yet because they are so new. When that all comes clicking together and I continue to add to that platform I expect my interest payment payouts to sky rocket. I think I’ll put in another $1,000 into that platform or so and will be reinvesting the principals and interest payments to snowball that passive income stream and make it larger.

The other side of the coin is my stocks and etf’s I own. I have added around $750 into my stash positions and most of those pay dividends. I’ve also added $1400 to my robinhood portfolio and a decent chunk of that has gone to dividend stocks. I plan to continue to add to both and make profits on my positions to reinvest into dividend stocks as well as reinvest the dividends back from where they came from.

The goal for this is to reach financial freedom. There are various definitions to this but for my purpose it is to create passive income streams that are greater than my active income (the money I make from working). When you reach this and assuming you account for inflation, cost of living increasing etc. you can effectively retire. Now of course I don’t plan to retire super early and go live on a beach or anything like that, my mission is much bigger than that, however that is the ultimate plan.

You might be taking a look at this and scratching your head like, “Brandon, you’ve got a long way to go to replace your standard income if you aren’t even at $1,000 a year yet” and you are absolutely correct. My stock portfolio currently yields around 3%, for a modest $40,000 a year to live on my portfolio would have to be around $1.3 million at that same yield to produce that. That’s a lot of motherfucking money to reach financial freedom if you ask me.

That’s why I am looking into investing in real estate when I build my capital up. With real estate’s monthly cash flow and leverage assuming a modest 5% return not accounting for increasing rents or refinancing or anything like that an $800,000 property would yield $40,000 a year and with a 25% down payment of $200,000 you could control that. That looks much more attainable to me.

Using Grant Cardone’s 40% rule, profits from my investments, and existing passive income streams that will grow that should be attainable within a few years if all goes right.

As Warren Buffett said, “If you don’t find a way to make money while you sleep, you will work until you die.”

Now are these passive income streams passive, no. I actively invest in the stock market, I do research on the positions I take, I check lending club frequently and hand pick my loans that I invest in etc. But all in all they are pretty passive. Real estate on the other hand isn’t very passive until you get to the big leagues and can afford a property manager.

Grant’s new real estate investing book is in route to my door in STL and I will be giving that a read very soon and I plan to implement his plan and to go big on my first deal. We’re talking 24-32 units costing $1.4- 2.0 million requiring a down payment in the neighborhood of $500-700k. Like I said large upfront capital or large up-front work, time, energy.

I should also mention what I am doing right here follows that other method that I haven’t gone over. This blog while it does not produce any income and actually never has produced any income for me may be able to one day. Consider how much time I’ve spent (10 months, 60 blog posts, advertising, Instagram etc.) to get it to this point and still haven’t made a dime with it. That’s what I am talking about in terms of up front time, energy, and effort.

It will not be easy whatever passive income route you choose, but with a good strategy and the work you need to put into it the prize is pretty frickin nice.

Let me hear your passive income journey!

B^2

Strategic plan ahead

I took this from a homework assignment I completed today. Its a pretty raw form and I rambled and the grammar isn’t great. It does give a general overview of what I plan to do and how I am trying to get there.

My strategic plan for the next 20-25 years looks like this:

(Ages subject to change, general outline given)

Age 22: Where I am at currently, game plan is to graduate S&T in May 2019 with the Eman and Mechanical degree and have a technical sales job with a competitive pay plan and great benefits.

Age 25: Build a solid foundation from the first job and possibly move to another company or make moves in the company I start with. Begin building a real estate portfolio (investment properties) and build a passive income stream while maintaining solid performance at my new job or the higher position I am moved to.

Age 30: Continue to build passive income through the real estate portfolio. Increase passive income to a point where I could maintain a minimal lifestyle with just the earnings from that portfolio. Start own business or seek new ventures as the opportunities present themselves at that time (2026).

Age 35: Build out the side business/own business/ new venture to create another sustainable stream of income. Ideally have at least 3 high flow streams of income with 2/3 being relatively passive. Begin giving back to the people and organizations that made me who I am. (parents would be first ideally when I am 25ish, SLUH wrestling, Sigma Chi Fraternity, Boy Scouts of America, philanthropic endeavors etc.)

Age 40: Ideally many streams of income have formed by now between stock portfolios/dividends, real estate portfolios, 2 or 3 businesses, any job that I still work, etc. Continue to give back to philanthropies, organizations, start to mentor or guide those that could benefit from my knowledge and experience. I’m sure kids are already in the picture by now and set them up for success.

Age 45: Passive income would be enough to sustain a comfortable lifestyle if I choose not to work. I would still in some way shape or form work as that’s just who I am. Continue with multiple streams of income, various companies or side businesses I’ve started partnered with. Consult for other businesses, organizations etc. again benefiting from my various roles and positions and knowledge I have gained throughout the years. Continue to give time, energy, and effort to those around me to ensure their own success. Be a family man. Make a difference in the world, not just those around you in the present but for those that are in the future and still to come.

The Last Splurge

If you follow Grant Cardone at all he preaches increasing income above all else. The 2nd step in the process is to reduce taxes. I have done a relatively good job of that thus far, my internship allowed me to dictate how much income I make because it was a 100% commission job. I have tracked all receipts and have started researching how to minimize my tax bill this upcoming spring as well. The third step in his cycle is to save specifically “save it all”. This requires you to live your daily life without increasing your cost of living while you increase your income.

We see people violating this rule every day, some guy gets a promotion at work makes an extra $10k a year and goes out and celebrates by purchasing a new BMW. That promotion and pay increase did not make any difference since he increased his cost of living. He probably would have been better off getting a $5k pay increase and not blowing the money on material things.

I never was into blowing my money, here and there I would “treat yo self” but nothing drastic. Last summer at the end of my internship which paid me quite well and was a decent increase from the previous year ($150 more a week) I bought my only watch and a piece of wall art. That was my form of treating myself which came out to be about $250.

This summer by the time it is over and with bonuses included as well as any lingering payments I should avg a pay increase of about $350 more a week (no living stipend though) than last summer. I should be able to reduce my tax bill because of my 1099 status this year substantially. (I received about $1300 back last year, but I also had taxes taken out every paycheck and I am not taxed under my current pay system yet.) So, check box 1 and 2 for Mr. Cardone. I should also note I didn’t upgrade my standard of living during this time. I currently live in the cheapest apartment my roommate and I could find that would be able to accommodate a 3-month lease. It is cockroach infested and is pretty hood for a $400 a person month rent ($450 for 3-month lease). I drive the same car, I wear the same clothes, I buy the same food, I buy the same beer, and spend the same amount at the bars.

Onto box #3 spending: Looking over my expenses which I track to the penny, we’re looking pretty good. I went over them in a blog post about halfway through the summer and you can check them out here. I spent some extracurricular on/with my girlfriend for the vacation and everything like that. I also spent some money at the bars and on booze and other non-constructive habits and vices, but that was minimal. Overall, I didn’t blow any of my money. That is until this upcoming weekend.

I plan to spend a bunch of money when I return to home and go shopping with the girlfriend Saturday. I WANT new clothes, new shoes, a new suit, and some other Knick knacks. I say want and not need because that’s just what they are. The clothes I wear are fine but perhaps a bit dated. Some of my shorts and shirts I often wear I purchased 3-4 years ago and some are not in the best condition. I’d still wear them though, so it isn’t necessary I purchase new ones. Essentially this shopping trip is to purchase my “adult clothes” things that I will need in the future after I graduate college. That is why I call it the last splurge. This theoretically should get me the next two years or so of my life in terms of clothing and what not and would be considered the “treat yo self” portion of my saving.

Some of these purchases have been a long time coming for example the suit I currently wear I’ve owned for about 5 years, and I received a gift card for the purchase of a new suit last Christmas. The watch I purchased previously was intended to go with this new suit I plan to purchase. With upcoming interviews for full time jobs and the networking, events and other occasions I plan to attend you could consider this an investment in my dated wardrobe.

So, what do you all think? A waste of time and money or a much-needed update to prepare myself for what comes in my future.

 

 

Premier Roofing Update 7/31/18

Hey I’m back and its only been 8 days but lots of good things have happened so let’s jump right into it. The previous update from 7/23/18 had the following stats below, followed by the new stats:

Presented Roofs: 86                97

Signed Roofs: 25                    43

PFYNR’s: 9                            18

Built: 5                                    8

Massive massive improvement thanks to an 11-roof investment property lead and success in the new neighborhood. I still have lots of potential customers to follow up with and PFYNR’s to close. This next week and a half is going to require 100% effort to achieve the results I want but it is entirely possible. My new goal is to make $17,000 from this internship and while I am quite a ways out according to my current stats ($6,600 made) I have a $3000 check coming Friday, I am currently at $1200 dollars made this week with 2 more days to go. I have $2200 riding on the PFYNR’s for the rental properties, as well as a bonus of $2000+ I will surely hit by the end of this week and will be received after I have completed the internship. With all that factoring in it is not unreasonable for me to hit that figure above! Again, an all-out effort is going to be required and I’m grinding it out every day knocking doors, following up with customers doing my best to crush it and keep pushing for the top of the leaderboard. Speaking of which I am about 5th in the company currently which is much better than about 25th which was the case in the previous update. I am gunning for the top spot and I believe that if my pipeline comes through and I continue to be successful in this new neighborhood that I will have a strong chance of achieving that. The #1 spot is held by a fellow intern at the KC branch I work at with 53 sales. I believe this is his last week working which provides a terrific opportunity to make up the ground next week!

As always, I will keep you posted and show you how it all turns out this summer. Stay tuned!

 

 

Premier Roofing update 7/23/18

We are fast approaching the end of my internship here with 3 weeks to go. This is a very critical timeframe because I may be able to get PFYNR’s completed with any new customers before I leave for the summer. After I leave my work will be handed off to my supervisor and I believe I will receive a bonus for any jobs that are still in progress from when I leave. Not sure exactly if that is the correct phrasing or if that is the correct bonus structure however we will get there when we get there, and I still have plenty of work to do before we get there.

I am currently at 25 sales as of writing this on July 23rd, this puts me just shy of the leaderboard which starts at 28 sales as of this morning. I do have an incredibly stacked pipeline however and I will explain that one a little further. My current stats are:

86 presented roofs

25 signed roofs

17 Do not have enough damage

9 PFYNR’s

5 built

As I mentioned the pipeline before, I have 25 potential sales in my pipeline, and 11 PFYNR’s. Not to mention what I am going out and selling currently. Much of my overall success in this internship rides on my performance in these last few weeks to close sales, put roofs in production and continue to deliver outstanding customer service. I need these sales and roofs in production for my own personal income as I am far off from my goal of $20,000 from this internship as I have originally planned. I’ve made $6200 this summer so far with thousands of dollars riding on my pipeline alone. Now my actual breakeven number is around $14,000 which is about what I made last year including my living stipend. I believe that is achievable when my pipeline, potential future sales, and my bonus are factored in.

So, my game plan is to just keep on keeping on and grinding this thing out. I have a build coming up this week which 5 sales in my pipeline are riding on. I’ve also moved to a new area that was recently struck with hail, I’ve only worked a ¼ day or so out there as I had an event this weekend I was leaving town for. It will be a little more difficult now as I have a little way to travel to this area and still have meetings and follow ups in my old section of neighborhood as well. I also have a block and a half that I still need to door knock and follow up in in my old neighborhood. This will make things more difficult, but I will make the most of it. If I can close my leads and work my pipeline I think that will bring some weight off my shoulders and we can start making some serious progress and drive this hard into the end of the internship.

As always, I will do my best to keep you all updated. Feel free to leave a comment.

B^2

Premier Roofing Update

How everyone is doing well I’m sorry its been awhile, while blogging and the content I am trying to deliver is one of my goals I’ve been more preoccupied with work and building my Instagram platform. Anyways as I write this post I have 22 sales with 3 dead. Its rather unfortunate as there is a tier at 25 sales which I wanted to hit about 2 weeks ago but I am still slowly struggling to get there. Several issues which have led to this, I have taken days off that I shouldn’t have, I’ve had other commitments on the weekends that took away from my time on the street. I am currently on my way back from a week-long vacation as well which has obviously taken away from my sales potential. I’ve also had sales fall through via failed inspections, cancelling the contract etc. Ultimately it is my fault for my shortcomings however some of the circumstances are out of my control.

Looking forward, I’ve had 3 builds completed and two more coming up this next week. Builds in general help me out with closing the deals in the surrounding areas, another opportunity to provide an excellent customer service experience, and of course my commission off the build ($200).

This next week I had a potential $1400 to be made as well as $1200 that I am waiting on an email for, hopefully we can get that all closed here shortly. I finished this last week up at $1300 and had a terrible week prior to that finishing at $100. Ultimately, I need to make over $1500 a week from this point on + my bonus to make up for the disappointing performance and hit my breakeven point ($14000). It may take less than that to reach a break even point (I apparently get some very nice tax breaks that I didn’t have at my previous job) which could make it easier to break even in comparison to the previous summer.

I want to finish this week with over 25 sales, I have an estimated $1400 on the table however I want to make more than that as I need to average approx. $1500 the rest of the summer. I’d also like to get my $1200 deal completed so I can move on with the builds for those before I leave for the summer.

I’ll do my best to keep you all updated as we progress and keep crushing goals throughout the summer and the foreseeable future.

As always feel free to leave a comment, I’d love to hear what you think!

Thanks, B^2

Leadership Positions that have Advanced my Life

In my life I’ve been fortunate enough to have plenty of leadership opportunities and I have taken advantage of them to further my personal development. Today I will be analyzing a few of them to give some better insight as to how they developed the person I am today, what knowledge and lessons I took away from them, and how you can also get involved and become a leader in your own field of interest.

Let’s start way back to boy scouts, for those of you who don’t know what the Boy Scouts of America (BSA), “The BSA’s goal is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. For younger members, the Scout method is part of the program to instill typical Scouting values such as trustworthiness, good citizenship, and outdoors skills, through a variety of activities such as camping, aquatics, and hiking.” – Wikipedia

I was involved in Boy Scouts all my life essentially, from a Cub Scout when I was in first grade all the way to Eagle Scout at 17 years old. Through my time there as it mentions above I learned a lot and I put myself in positions to further develop my character. These include, Patrol Leader, Senior Patrol Leader, and Junior Assistant Scout Master. To break down some of these further clarify the situation, Patrol leader essentially led a patrol (for us that was between 8-15 scouts) and you were responsible for your patrol on camping trips, each patrol was responsible for cooking their own food, cleaning up their own mess etc. Senior Patrol leader oversaw all the patrols that comprised the troop (we normally had between 3 and 4 patrols), your job was to ensure all the patrols were functioning accordingly. Junior Assistant Scout Master was a position that brought me another tier above Senior Patrol Leader and I assisted the SPL in making decisions and relaying information to the Scout Master.

Through all these positions you had to effectively communicate to your peers who were both younger and older than you were, as well as adult leaders in the troop. You were essentially responsible that the young men you oversaw were doing their part and contributing to the task at hand. As you advanced through the ranks you started leading by example and teaching the younger guys what they needed to do and how to do it. Although everyone in the world at the time thought Boy Scouts were gay and it was a stupid program, I had incredible opportunities to travel and do cool things (white water rafting, snow skiing, Pike’s Peak, hiking, climbing, canoeing, archery, rifle and shotgun shooting etc.) that other kids didn’t have the opportunity to do. That in addition to vast amount of survival skills and knowledge I accumulated I also was able to develop leadership skills that others forsake. This also lead into my other leadership roles and opportunities later in life that we will now go over.

Next, was High School Wrestling captain. This wasn’t as involved as the Boy Scout leadership positions that I had previously, but it did mean something. Essentially you ran warm ups for practice assisted the coach in demonstrations and provided advice and inspiration to those around you. This position required very little outside work that wasn’t already required to be a starting varsity wrestler, not much to say about this. In other sports Team Captain may have some more meaning however wrestling is both individual and team oriented but more so individual.

Next up would be involving my Fraternity in my currently ongoing college career. As I write I still have 2 more semesters to go with 12 and 9 credit hours respectively. I have been a part of Sigma Chi Fraternity since my freshman year in the Fall of 2014 and am still heavily involved in the fraternity even as I approach my 5th and final year. I have held a ton of positions for the fraternity including, Recruitment chair, Greek week chair, Social chair, Vice President, houseman, Philanthropy Chair, and brotherhood chair. While there is leadership and character development in all of those positions I want to focus on Vice President as the primary one.

As Vice President I essentially oversaw internal operations of the chapter, ran the executive committee and its meetings, ran the post initiation training of newly initiated brothers, oversaw all the committee positions. It was quite an interesting year in my position, possibly the hardest terms as Vice President we’ve ever had to deal with. We had several executive members get co-op (extended internships) after they were already elected so we had to elect new exec members, we had new national policies implemented that nobody saw coming, had to drop several people from their committee positions due to grades, overcommitted and unable to do fulfill their position. It was a mess and I was already under a strenuous workload and amount of stress. We did survive, and I think we turned out better than we started but It wasn’t easy and really challenged me.

Couple things I learned, things can and do go wrong (shit happens, get ready to roll with the punches and adapt). People suck, I don’t say this to be mean, but people tend to be forgetful and take the easy way out when they can which puts more strain on you. Another important lesson I use was taught to me when I was a pledge and it was an adaptation of this parable.

 

“Os Hillman tells the story of a rider on horseback, who many years ago, came across a squad of soldiers who were trying to move a heavy piece of timber.

A corporal stood by, giving lordly orders to “Heave.”

But the piece of timber was too heavy for the squad.

“Why don’t you help them?” asked the quiet man on the horse, addressing the important corporal.

“Me?  Why, I’m a corporal sir!”

Dismounting, the stranger carefully took his place with the soldiers.

“Now, all together boys – heave!” he said.  And the big piece of timber slid into place.

The stranger mounted his horse and addressed the corporal.  “The next time you have a piece of timber for your men to handle, corporal, send for your commander-in-chief.”

The horseman was George Washington, the first American President.

I love this story as it reminds me that leadership isn’t barking orders at your staff, it’s helping them with the heavy lifting.

 

It simply states that the leader must also contribute and do the heavy lifting just like the men he leads. The same applies to the fraternity and leading by example. While we are not a large chapter we stand around 50 members give or take, so within that group there are young men of different temperaments, talents and convictions that must be handled in separate ways when issues arise. I learned how to cater to different people’s temperaments from the shy quiet freshman who was underperforming to the drunk disorderly super senior enjoying his last hurrah.

The last leadership position I currently partake in is Missouri S&T Miner Rugby captain. Now I have been in this position for a solid year perhaps longer. I think I was unofficially the captain for a little bit but for the last 2 semesters that was made clear. This is an interesting one because there are many positions and situations I am faced with. To my team on the field, I make the play calls and control the game. To the Sir (the referee) I communicate all issues that my teammates bring to me and express my concerns with the Sir. I sometimes take a back seat on practices and let the president make the calls on that but I voice my opinion on that as well. After the game, I am no different than anyone else on the team, there to have a good time and enjoy the spoils of victory.

Again, there is a lot to be learned from this position, I address my teammates on the field on game day much differently than at practice. I also address the sir differently than my teammates. I juggle between who needs to get more playing time and who needs to get on the field to deliver the best performance.

Overall, I have been a leader in many aspects of my life, all different, all unique in their on way. I think that it is important to have that diversity because it gives you more tools in your toolbox to handle the different situations you may face out in the real world. It also presents you with various challenges that will build your character and your problem-solving abilities as you struggle between the pros and cons of situations. I would highly suggest getting involved in some organization, club, sport etc. that you enjoy and look for a meaningful way to contribute whether that would be a leadership position such as the ones I’ve mentioned above, or a minor position. Getting involved, developing communication, problem solving, and leadership skills will make a lasting impact and help prepare you for your future endeavors in your career or activities later in life. Take advantage of the opportunities that are available to you now rather than wasting away your time, because in 10 years the lessons you learned from getting involved will get you further than that tv episode you watched.

As always, feel free to leave a comment below I would love to hear from your guys!

B^2

 

Premier Roofing week 4 and 5

Well it’s been an interesting one.

Let’s see we sandbagged week 4 because I couldn’t really get anything going, it was the weird middle ground of running out of potential customers on my old street and just starting out a new street and trying to earn the trust of my customers in the area. I only had 1 sale and 1 PFYNR ($300 total) for that week and we pushed those onto week 5.

Now week 5 gets me heated. Very heated. It turned out well I made $1100 on the week but in all honesty, it should’ve been around a $1500 week. The last $400 could have been made up very easily with some customers doing their part and communicating with me. It would have worked out much better on both of our ends. That was very frustrating but now the wheels are turning on this beast of a position I am in. Week 5’s slightly disappointing results should lead into a stellar week 6. I would like to finish the week at $2,000 but we will see how we do, as I’ve mentioned previously some of this is simply out of my control. I mean when I call and text a customer 3 separate times over the course of 5 days for some information and they don’t deliver it to me and I knock on their door trying to get a hold of them there’s not much more I can do.

I also can’t control when my supervisor gets his paperwork and estimates together, I am waiting on two of those to be completed to schedule 2 PFYNR’s this week. Either way though, I have finally been gaining traction and gaining momentum in the areas I’ve been working in. With my first build happening on Wednesday this week and several insurance inspections already scheduled for Monday, Tuesday and possibly Wednesday we should be getting well on our way here shortly.

A couple more street signs, couple more claims approved, couple more builds and we will be moving forward with so much momentum and reach that I will be pulling money in hopefully. It was just a shame that we ran into some claims that didn’t go through because of bad luck, lack of communication, and drones that don’t do a very good job at inspecting. Either way we’ll keep pushing on like we always have.

This is absolutely needed because I am well below what I need to average to make the equivalent amount that I did last summer. I will do my best to update you but definitely check out my twitter @bsquaredweb10, my Instagram @ bsquared.website and of course this blog.

I will be doing my best to keep the content rolling and keep providing value and inspiration to my followers. I had a message in my inbox for a while on Instagram (it was in the requested message potion, sorry it took 3 weeks for me to notice it!) and it was the first time that someone said they actively followed me and were inspired by what I was doing and was asking what they should be doing. That was a huge honor for me and I hope I can inspire and help others soon!