Keith Craft: Rule #7: An investment is only an investment if it creates passive income.
Rule #7: An investment is only an investment if it creates passive income.
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The thought behind the quote
Investment is seen as a financial term, but in the essence of the etymology of the word is my favorite definition: an act of devoting time, effort, or energy to a particular undertaking with the expectation of a worthwhile result.
In the context of #mymoneyrules, I could list many ways to invest...stocks, bonds, real estate, etc... But as it relates to my financial philosophy, I think in terms of categories that encompass ALL types of investments. The categories are: investments you own, cash equivalents and lending type investments.
Read the full thought
Without going into a long explanation here, when I think INVESTMENTS...I think about entities that will eventually produce passive income. Therefore, for me, Rule #7 dictates WHERE I invest...WHAT I invest in and HOW I invest based on long-term risk factors and potential!
My goal in giving you this MONEY RULE, is not to show you the what, where, when and how of my investment portfolio (get you a financial planner and or investment strategist for that:) but more than that...I want to help you think about what an INVESTMENT is to you:)
Bottom-line for me: if it does not have the potential to produce passive income for me in the future, I DO NOT consider it an investment!
One example: crypto-currencies for me, are not an investment! They are a SPECULATION! I am not a “speculator” I am an INVESTOR:)
Related
- What you learn will eventually determine what you earn.
- Rule #1: Put God first (return the first 10% or tithe).
- Rule #8: Whatever you are naturally gifted at, can become a talent. A talent has the potential to be monetized when it becomes a competency.
- Resources are useless without relationships.
- Truly, it is not want, but rather abundance, that breeds avarice.
- Investing in yourself is the most important investment you will ever make in your life... There's no financial investment that will ever match it, because if you develop more skill, more ability, more insight, more capacity, that's what is going to really provide economic freedom... it's those skill sets that really make that happen.