So you’ve been struggling to figure out exactly what is passive income and how it affects you. In this blog, I’m going to answer that question, coming up! 

Hi there, I’m Billy Keels and I’m back once again to share some tips and strategies with you that are gonna help you to go out and make more money, have more control of your free time and ultimately, help you live with less stress. So if it’s your first time to visit this website, check out other resources that could help you learn more about real estate investing.

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And, when you find value in this blog, go ahead and share it with at least two or three other people because by doing that, you are going to be in a position to really help other like-minded individuals, attract them to the community so that we can continue to grow together. That is going to be absolutely phenomenal, and I want to thank you for that right upfront. 

I want to make this blog very brief because I think it’s the best time to talk about it. Recently I talked to a lot of people that are thinking about getting involved in real estate investing. Those that are already invested in the stock market are looking into doing new things, but they feel a bit uncomfortable and they are looking for new alternatives. This is probably one of the reasons why you’re here, to understand more what passive income means.

And so in this blog, I want to explain what passive income and also give you an example of what that might look like. In the past, we also talked about what passive income really means, what active or passively investing is, and what’s the difference between the two. I have done a video on Understanding Active Income. I strongly recommend that you also watch that video so you can juxtapose that with passive income. 

What is passive income and where would you find that?

Passive income is when you have no material participation which is basically you’re looking at investing in a business or rental property. Primarily, you find it through rental property and also limited partnerships that you can have in certain types of businesses. But the key here is passive income is always a type of business income. And so, yes, rental property as in rental income is a business. This is actually one of the things that I recently listened to, when I was talking to my accountant, and I even had a great podcast episode with Dr. Buck Joffrey. He had a great talk with Tom Wheelwright. 

Just a reminder that you need to go out and discuss passive income with your accountant, and they will let you know how this will apply to your specific situation. 

When you talk about passive income, you talk about changing your facts to change your tax. And so ultimately, the way that passive income is taxed is typically lower. You can even get to a place where you can actually pay zero percent tax legally in the United States. 

This is one of the great concepts that’s really important for you to understand about passive income. As you invest in businesses or invest in real estate, one of the great benefits of that is you can potentially pay zero tax in the United States, and the tax brackets are much lower.

That was important for you to know that, and so I made this blog real quick. I’d appreciate it if you let me know if this was helpful through your comments. Feel free to leave your comments below or if you have other questions about previous videos because I really like to make sure that you get this clarified so you will feel much more comfortable, confident and move forward faster. 

Also, if you’re one of those busy six-figure salary earners and you have been dedicating your time and energy to a big day job, that’s great! At the same time if you’re thinking about creating some alternatives for yourself, I’ve been able to find a way to do both those things. I’m happy with my day job and at the same time, over the last few years I’ve been taking more control of my financial life. I share these story of how I’ve done it in the PLTO Secrets book which you can pick up absolutely FREE. Just leave your name and email when you click on keeponcashlfow.com/roadmap, and we’ll send you that PDF right away.

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Also, if you’re more inclined to passive investing and you want to pick up more information and expertise,  you can go and check out the Going Long Podcast with Billy Keels, which is on all major podcast platforms, where we’re doing audio and video interviews. We’re releasing those twice a week so you can listen in and learn at your own time, and I’d love for you to be part of that community too. Make sure to leave your comments because I’d love to engage with you! 

Hopefully we’ll be seeing you very soon. So until then, go out and make it a great day!

 

You can also check out my latest podcasts and collaborations here keeponcashflow.com/podcasts/