2 Ways to Build Passive Income Streams in Different Markets
It's wise to build passive income streams in the young adult years and allow them to grow. Before long, you'll be earning significant money from your previous work.
Two Easy Ways to Build Significant Passive Income
Passive income is great because it's a way to earn income without putting in a lot of work on a consistent basis. Technically, passive income works because a person does an amount of work in the beginning, but the cash flow is reoccurring and provides financial health. This is especially beneficial for the older generations as they continue to age and desire to preserve their energy.
Invest in Real Estate: Condos, High Rises, Homes
For some people, the thought of owning multiple properties may sound daunting and almost impossible. However, there are many ways to earn money as a real estate investor. One of these ways involves rentals. You can purchase a home, condo, or high rise by researching various investment property financing options. Don't be deterred by the idea just because of the finances. When you prepare a house to put on the market as a rental, you'll be able to earn a lot of money on a monthly basis. A few years of rental income can easily pay off an entire mortgage without your help and the rest becomes profit.
Books, Music and Other Copyrighted Material
Books are great forms of passive income for building wealth. An author spends a significant amount of time writing a book. Once it's published and available for sale, the book will sell over and over. The same concept applies to music. The percentage that's paid to the creator is called a royalty. With the right marketing plan and a wide audience, anyone can experience royalty checks in the hundreds of thousands of dollars. There are also many celebrities who make a lot of money from their book tours and book signings. If you don't consider yourself a good writer, but you have a story to tell, hire a ghostwriter. They'll create the content and you'll be able to eloquently share the story with the world.
Finances and the Future
Passive income streams eliminate the process of exchanging time for money. When you free up your time and can still earn lots of money, this is a dream that most people long to experience. In the meantime, be intentional about creating passive income streams and you'll experience financial freedom in no time.
The Top 5 Most Common Refinancing Misconceptions
When it comes to refinancing your home, there are a few misconceptions that many people have. Before you rule out the possibility of refinancing your home, you might want to learn why it may be easier than you think.
Some of the most common refinance misconceptions are not having enough equity, not being able to afford the refinance, or that it simply doesn’t make sense because of high interest rates.
Regardless of why you think you wont qualify to refinance your home, don’t let what someone told you stop you from taking advantage of some of the great benefits it can provide such as lowering your monthly payment, cashing out to consolidate debt, or getting a lower interest rate.
Here are the most common myths when it comes to mortgage refinance:
- I don't have enough equity in my home
Most refinancing programs require you to have at least 20 percent equity in your home to qualify. However, new federally chartered programs make it possible for homeowners with little or no equity to refinance their home and take advantage of the benefits that comes along with refinancing. The federal program is called Home Affordable Refinance Program, or HARP, and it has helped many homeowners with low equity reap the benefits of refinancing. Just like any mortgage program, you must meet certain requirements before you can qualify, but if this sounds like your situation, a federally chartered program, such as HARP, may be able to help.
- I can't afford it
Just like any mortgage or refinance program, there are lending fees involved for processing the loan. The fees vary based on the lender, but the average cost is about 1.5 % of your total loan value. For example, if you have an estimated loan balance of $300,000, you will be required to pay $4,500 in fees. That may seem expensive, but don’t worry, most lenders will let you add those fees to the total loan balance and let you pay over time through your monthly mortgage payment.
- I was turned down before, so there's no reason to try again
Were you recently rejected for a mortgage application? Don’t give up just yet. Just because you were rejected in the past, doesn’t mean that you won’t ever qualify. If your financial situation has changed since you last applied, then there’s a chance you could qualify. Most applicants get rejected because of low credit, low income, or too much debt. However, if your financial situation changed, then you may be able to qualify. For example, maybe you got a raise at your job, raised your credit score, or paid off a good amount of debt. A change in any of these factors could get you one step closer to qualifying for a refinance program.
- It's easier to refinance with your existing lender
Many people think that refinancing with the lender that did your original loan is the best option. However, this is not always true. Lenders have different fees, interest rates, and programs that could be better for your situation. Even though you gave your financial documentation to your original lender when you did your first loan, you will still be required to resubmit new documentation that represents your current financial situation such as job status, income verification, bank statements, and credit score. So, the process to refinance your home won’t necessarily be easier with your original lender because you worked with them in the past. You are free to work with any lender you choose and there are many lenders in any given community, so it is smart to shop around and find the one that works best for you
- Interest rates are too high to make refinancing worthwhile
With talks about the rise in interest rates, you might think it is not a good time to refinance. However, in the mortgage industry, things are constantly changing. Regulations, loan limits, and interest rates can be different on any given day so it is smart to talk to a lender and find out what the current state of the industry is. When you secured your first loan you were locked into the interest rate that was available at that time. It might not seem like a significant change, but if you are able to lower your interest rate a full percentage point, it could save you a significant amount of money on your monthly payment when you refinance. There are also benefits of refinancing your mortgage to a shorter term so you can save more money long term on interest and pay your loan off faster. For example, if you refinance from a 30 year fixed rate mortgage to a 15 year fixed rate loan, you could reduce the amount of interest on the loan by $100,000 or more. Your monthly payment will be higher, but your interest rate and total interest owed over the life of your loan will go down.
If you are a homeowner and you're interested in refinancing your home, give us a call and we will guide you through the process! 702-331-8185
Should You Combine Finances with Your Partner?
Depending on who you ask, combining finances with your significant other is either a positive step towards establishing a life together OR the worst idea ever. If you're considering it, here are some pros and cons to weigh.
Pros
Teamwork
If you’re on the same page and your financial priorities are fully aligned, you're likely looking beyond your own personal needs and wants and putting the needs of the relationship first. By combining all your assets and liabilities, you’re ultimately making the commitment to succeed or fail together, as a unit.
Simplicity
One of the benefits of joining accounts is that it makes bill paying and record keeping a whole lot easier (particularly if you’ve established a budget).
Furthermore, combining your loan accounts, such as credit cards, could help you get additional loans in the future.
And if you’re making consistent, timely payments, both of your credit scores will improve. If you had kept that credit account separate, only one of you would have the benefit of a higher score, which could hurt you down the road when you apply for additional credit.
Taxes
Sure, filing separate returns may be beneficial in some instances. (For example, if one spouse has large medical bills and can meet the deduction threshold by considering only his or her income.)
But joint filing saves time, and possibly money, too — particularly if you both work and one of you makes considerably more than the other. Combining incomes could bring the higher earnings into a lower tax bracket.
Also, some tax credits are only available to a married couple when they file jointly. Talk to your accountant for additional information about minimizing the tax bite.
Cons
Attitudes
Some couples may not agree on certain issues, like creating a spending/saving plan, setting retirement goals, or even how much debt they should carry. After all, opposites do attract, and in many relationships, there is, in fact, a spender and a saver.
If your financial philosophies don’t align, and you’re combining your financial life with someone who has vastly different expectations, goals, systems, ideals and habits, this could bring challenges and unwelcome relationship conflict.
Dependence
If you’ve been managing your money on your own for years, and have been relatively successful in doing so (from choosing your 401K funds to setting a budget to planning a vacation), you may not want to relinquish your financial autonomy.
Sure, there may be more bookkeeping for you to do if you keep your finances separate, and opt for more of a yours/mine/ours account type arrangement (commonly referred to as the “three pot system”), but it may ultimately provide you with the independence and comfort you desire.
Disentangling
You may be in la la land now, but what happens if the relationship doesn’t work out in the long run? Joint mortgages, credit cards, and bank accounts can be very difficult to separate, even with a formal court-ordered divorce decree.