Passive Income Unveiled

8/10/2019 Passive Income Unveiled

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Copyright 2014 TheFinancialFreedomFoundation.org All Rights Reserved Page 1


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SPECIAL REPORT from TheFinancialFreedomFoundation.org(If you find this reort interesting! lease For"ard it to a Friend#

$o" to Achie%e Total Financial Freedom&

'ulti)illionaires Are *ot Any Smarter Than +ou!

They ,ust -no" $o" To Play The oney ame/

This Reort Re%eals E0ACTL+

1hat +ou *eed To 2o To 3uild 1ealth

,oining Our 'astermind rou/ Re%eals E0ACTL+

1ho to 4se For Each Comonent

According to the World Institute for Development Economics research, of United NationsUniversity, 2% of adults in the orld on !"% of the orld#s ealth$ What does this mean It

means that the 2% &no something that the other '(% of people don#t &no, and they ta&eaction on that &noledge$ )hey &no ho to correctly apply the principles of ealth creation$

If you ere to ta&e their ealth aay from them, they ould li&ely regain it fairly *uic&ly$ Andif they ere to tell an average person hat they ere doing and the e+pected results, the averageperson ould proaly say that it sounds too good to e true and ould simply al& aay-dreaming of ealth and never achieving it$ It is simply a matter of understanding the principlesand ta&ing action$ )he main levers of ealth creation are ar5itrage, le%erage, andcomounding$

)he .1 most fundamental principle of ealth creation is to on or control assets that generate

income$ )hese assets might e rental properties, usinesses, oil ells, patents, franchises,uildings, stoc&s, onds, mutual funds, etc$ )he amount of income generated y the assetdepends upon the si/e of the asset and the rate of return$ )he typical annual rate of return ontraditional assets is anyhere from 1$!% to 1!% per year$ 0ost traditional assets also re*uireyour time to manage them$ oever, here#s hat most people don#t &no-

Shhh6 Come closer6 $ere7s a little secret6

)here are nontraditional assets that can sustainaly generate high douledigit annual returns,ithout re*uiring your time to manage them3 )hese assets are uni*ue in that they ma&ema+imum use of aritrage and compounding, and the returns really s&yroc&et hen you add in

leverage, as you shall see$ 4ut first, the asics5

The La5or ame %s. the oney ame

0ost people &no ho to play the 6laor game,7 ut never really learned hoto play the 6money game$7 0ost people trade their laor and their time formoney, y ecoming employees$ )his is called 6active income,7 ecause itre*uires daily action to generate the income$ )his strategy constricts their


$a%ing a '8o5/

is the ris9iest

tye of income
http://www.thefinancialfreedomfoundation.org/http://www.thefinancialfreedomfoundation.org/


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earning potential, ecause there is a limited amount of time in each day 8it is impossile to or&more than 29 hours in a day:$ When the 6active income7 is insufficient to meet their needs, theyuse det, in the form of credit cards and home e*uity loans, to ma&e up the difference$ )his iscalled 6Consumer 2e5t.7 )his is a ad type of det and results in ondage to creditors and evenan&ruptcy$

Acti%e income is the ris9iest tye of income! 5ecause it can sto at any timedue to causes "hich are outside of your control , such as illness, accidents, orinvoluntary unemployment 8;ou#re laims,over 9"",""" s&illed, talented employees hear those to dreadful ords every ee&$


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etting Started

If you already have a 6nest egg7 of B1""C availale to or& for you,then you can get started right aay$ If you have B1"C availale toor& for you, then you can get started, too$ 4ut hat if you don#t evenhave that ;ou can get started, too3 What most people dont fully grasp

is that ealthy people implement the principle of leverage y usingther eople#s 0oney 80: and ma&e )A) money their employee,too3

Le%erage in the form of OP

)he leaste+pensive, loestris& form of 0 that e have come across is using nonpersonallyguaranteed, unsecured usiness lines of credit$

Nonersonally Fuaranteed means that you do not act as the personal guarantor$ nly

the corporation you#ll form and on is liale for repayment of the det, not youpersonally 8sometimes, you have to start out as the personal guarantor, ut removeyourself as a guarantor once you have estalished a repayment history ith the lender:$

Unsecured means that you don#t have to pledge a car, house, your first orn, or anythingelse as collateral that ill e sei/ed if the det is unpaid$

4usiness means that the orroer is the corporation that you create and on, not youpersonally$ It does not sho up anyhere on your personal credit profile, only on yourusiness# credit profile$

Gines of >redit means it can e either5

1$ A standard usiness credit card

2$ A traditional usiness loan, ith a fi+ed interest rate and a fi+ed numer of years torepay the loan 8large corporations issue onds ith these characteristics:

?$ A fle+ile usiness line of credit here you can access the money y riting a chec&and must egin paying interest only hen you dra don on the line of credit

)his &ind of det is called 6In%estment 2e5t.7 )his is a good type of det$ @ince it is usiness

credit, it does not report on your personal credit profile$ 0ost importantly, you can useinvestment det to generate investment income or 6passive income$7

A credit profile is an intangile asset$ At )he


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EGuity Areciation 'Passi%e/ Income 'Acti%e/ Income

0anaged Accounts 8Wealth >reation @trategy:

Froth @toc&s

@ingle ommercial E

@elf @torage E

4illoards

0ortgage Notes

il Wells

=o Income


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In e+change for their services, the professional traders either receive an annual fee or &eep apercentage of the profits the generate on your account$ It is a inin situation$ ;ou havecomplete control over your 0anaged Accounts and complete transparency5 you can see each and

every trade, efore it is placed$ )hese accounts are on/iproof3 ;ou see theresults of each and every trade, in real time3 ;ou are the only one ithauthority to place money into or ithdra money outof the account$ ;ou

simply give the professional traders a 6Getter of Direction7 hich onlypermits the trader to recommend trades for your on ro&er to e+ecute onyour on account, implementing strategies that generate high douledigitannual returns3

4ecause the ealthy put their financial intelligence to or&, they do not needto go to a 6Ho7 each day to generate this 6passive7 income$ )his strategy hasunlimited earning potential, ecause their employee 8money: or&s 29 hours aday, days a ee&, ithout vacation or sic& days$ And the profits can easily

e reinvested, causing a compounding of the return$ )his is huge3

The 3irth of the Concet

o did e come up ith our investment model While getting our 04As at )he Wharton@chool, e learned to thin& strategically and to focus on ma+imi/ing efficiency$ 0ost usinessmodels are comple+ and inefficient$ )hat is hy their returns are so lo$ )he more profitaleusiness models re*uire some uiltin arriers to entry so that other people don#t copy hat youdo, therey increasing competition and driving don your profit margins$ After going ac& tothe draing oard several times, e finally drafted a usiness model that as so efficient, that itecame more of an investment model than a usiness model, ecause it did not re*uire the saleof any product or services, no capital e+penditures on property, plants, or e*uipment, and noemployees$

ere are its @)ENF)@5

1$ Scala5ility can add more money at any time and get the same return$ In traditionalinvestments, such as ith real estate, if you ant to invest another B!",""", you can#t Hustadd that to a property that you already on$ Instead, you have to loo& for anotheruilding to uy, and that re*uires time, money, and headache$

2$ Transarency you can see each and every trade as they are e+ecuted in your 0anagedAccounts, and you see the results, ith full visiility, in real time$ )hat ma&es ourapproach on/iproof$ In traditional investments, such as hen you invest in a fund or

uy a share of onership in a company, you hand your money to someone else and onlysee hat they report to you on a monthly or *uarterly asis$ )hey can use fancyaccounting to hide negative results$ oever, ith our approach, you get the truth, thefull truth, and nothing ut the truth$

?$ Retains control you only give the professional trader limited authority to made traderecommendation for your ro&er to e+ecute on your ehalf$ ;ou can fire the trader at anytime and replace them ith someone else, if they are not performing up to your

Copyright 2014 TheFinancialFreedomFoundation.org All Rights Reserved Page

These Accounts are

Poni) Proof:

+ou see the actual

results of each and

e%ery trade! in real

time:


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e+pectations$ In traditional investments, hen you give your money to someone else,you give them control over your money, and hope they give it ac& to you hen you as&for it$

9$ LiGuidity you can ithdra funds from your investment account at your leisure, ysending an email to your ro&er instructing them to do a ire transfer to your chec&ing

account$ )he funds arrive in your chec&ing account usually ithin 29 hours, or maye 9(hours if they have to close out some positions$ ;ou don#t have to put any real estate onthe mar&et and ait for several months, nor ait until a fund#s redemption period$

!$ Recurring incomeO hen you have professional trader that perform, they &eep ongenerating income for you$ 0ost usinesses sell a product to customer A, and then haveto find a customer 4 in order to sell more product$ >onstantly finding ne customers ise+pensive$ >onstantly finding ne stoc&s to uy or houses to uy is e+pensive, too$

M$ Allo"s for comounding you can reinvest your profits into the same account and ma&ethe same return$ )his creates e+ponential groth, hich is the true &ey to ealth$ ;ou

cannot reinvest rental income into the same rental property and get the same return$

$ *o emloyees the closest thing to an employee is the professional trader and yourro&er$ )heir fees are nothing compared to having salaried employees$ Employees aremost usinesses largest e+pense, and someone has to manage the employees$

($ inimies lia5ility there is no threat of a lasuit from a tenant, an employee, acustomer, a partner, or a competitor$

'$ inimies ris9 O once your account doules in value, if you remove your originalinvestment principal, then that account is, in a sense, ris&free from that day forard$ ;ou

can then use your original investment principal to open up another account ith adifferent professional trader, creating diversification$ 4y having several different tradersthat focus on different noncorrelated mar&ets and have different strategies, then youminimi/e the variance 8ris&: in your portfolio and have diversified aay specific ris& andmar&et ris&$

1"$ Allo"s for ri%acyO you can on the account in your on name or through an GG> thatyou form$ None of it is pulic record, unli&e real estate here anyody can loo& up hoon P;Q property$ If the GG> is filed in Ne 0e+ico, even etter, ecause Ne0e+ico protects privacy$

ere are its WEACNE@@E@5

1$ Caital HolumeO the nature of the investment model cannot accommodate hundreds ofmillions of dollars$ It is not uncommon for professional traders to refuse to accept neclients, so that they don#t start moving mar&ets ith their trades 8this has alreadyhappened to us once, efore e got our account opened:$ )his ma&es the model nonattractive to institutional investors and large financial institutions, here even B1"million is a small investment$

Copyright 2014 TheFinancialFreedomFoundation.org All Rights Reserved Page (


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2$ *o 5arriers to entryO if anyody &nos aout this usiness model, they can easilyduplicate it, especially if they &no the names of the professional traders$ )he ay tocreate a arrier to entry ould e to &eep the investment model a trade secret, y nottelling anyone$ oever, having a arrier to entry is only a concern hen ne entrantsinto the mar&etplace ill drive don your profit margins$ As e mentioned, the tradersill stop accepting ne clients efore it starts affecting their personal returns or our

returns$

A savvy usinessperson turns their ea&nesses into strengths$ ere is ho e did it$

When e find a trader ho meets our criterion, e ma&e sure that e get our account ith themfirst, efore e give their name out to anyone else$ )hat protects us against the first ea&ness$eali/ing, hoever, that this investment model is ideal for people ith less than B1 million toinvest, e determined to turn the second ea&ness on its head and actually sho people ho toreplicate our investment model 8that is hy you#re reading this report:$ While this is partiallydue to the fact that e are altruistic, there is also something in it for us-

We see a dire need for increased involvement ith organi/ations that focus on relieving humansuffering, such as feeding the hungry, clothing the na&ed, lierating the captive, andadministering relief to the sic& and afflicted$ We feel a great amount of satisfaction in dedicatingsome of our time, talents, and resources to addressing these very issues, ut our personal reach isvery limited$ )he income gap eteen the rich and the poor is groing and it is causingincreasing social distress$ )hose ho &no ho to play the money game aren#t sharing, andthose ho do not &no ho to play the money game aren#t learning$ It is very difficult for us tochange the mindset of ealthy people ho are set in their ays$ )herefore, e ill create nelyealthy people ho already share in our mindset$

)here are over 2M$! million people ho are either unemployed or underemployed$ If they cannot

&eep a roof over their heads, they and their children end up living under a ridge, and in somecities the underpasses are already getting croded$ )here are ?'$1 million people officiallyliving in poverty, in the U$@$ alone$ In many U$@$ cities, unemployment rates are already aove?"%$ In other countries, such situations result in violent uprisings$


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performance of nonprofits, ut they do not have the funds to pay competitive ages to peoplecoming from the private sector$

With that said, if you ere to approach a nonprofit and offer to or& for free, and perhaps evendonate money to them on an annual asis, they ould asolutely love you$ ;ou could changethat organi/ation forever, and e+pand their reach ith regards to the numer of people that they

help$ ;ou can impact the lives of people in ays that e couldn#t thin& of, and in places heree are not personally focusing$ We reali/e that e cannot dictate to you here and ho you goaout your philanthropic efforts, ut ith this approach you on hat you do, and you illchoose something that you are passionate aout$ )ime is more valuale than money$ )alents aremore valuale than time$ We ant to or& ith people ho are illing to contriute all three$)han&s to the speed of the internet, e can remove arriers to entry very *uic&ly, for the peopleho have the right &ind of heart and are illing to ta&e action$

@ome notale e+amples of social entrepreneurship in action5

Dennis evoto ho founded @tar of ope 0ission serving homeless people in ouston,

)P$ )hey regularly provide over !"",""" meals to the hungry, (",""" articles of clothing,2(",""" eds for the homeless, and M,""" medical appointments$

Dr$ William 0agee L Cathy 0agee, ho egan doing facial correction surgeries for afe poor children ac& in 1'(2 and gre the organi/ation into peration @mile, providing freesurgeries to over 2"",""" children in more than !" countries$

on L Gynette Geis, ho founded @top >hild )raffic&ing No, to fight child se+traffic&ing in the U$@$ )hey are in !" cities and over 2"" educational campuses, ith thousandsof people Hoining in to fight this horrendous form of modernday slavery$

University professor 0uhammad ;unus in India egan ma&ing small loans toimpoverished entrepreneurs in India, leading to the creation of microcredit and microlendingthat is no ma&ing transformational changes in the lives of millions of people in communities allacross the orld$

Walt atterman ho founded @un oer Energy International to ring solar panels torural communities, including 1",""" people in 4urma$

Cen 0iller, et$ al$ ho founded Water for eople, drilling ells in impoverishedcommunities to provide clean ater, ade*uate sanitation, and asic health services$ Every yearthey ring ater, sanitation, and hygiene to over 1"",""" ne people$

Each of these notale e+amples egan as a person ith an idea and a desire to impact thecommunity for good$ )hey comined their private sector s&ills ith the time and resources offriends and other community memers, groing their efforts into organi/ations that impact thelives of hundreds of thousands of people annually$ If they could do it, hy can#t you

ne of our favorite *uotes is5 Dream no small dreams for they have no power to move thehearts of men.O=ohann Wolfgang van Foethe

Copyright 2014 TheFinancialFreedomFoundation.org All Rights Reserved Page 1"


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No, e reali/e that all of this philanthropic involvement is predicated upon the assumption ofyou having enough passive income to pay your ills, so that you no longer have to trade yourtime for money$ )hat income depends upon the performance of the professional traders$

2o such traders eDist! or are "e 8ust ma9ing this u

Well, here is a snapshot of some of the professional traders5

Professional Trader J>&4egan trading 1'(9$ e focuses on commodity futures and options onstoc&s L e+change traded funds 8E)


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ercentage ate of eturn 8A: of ?M% per year or etter$ If you ere to reinvest all of yourprofits every month, hich causes compounding of the return, your account ould more thandoule in value every 2 years5

Year 2 4 6 8 10

Start x 2 x 2 x 2 x 2 x 2$100K $200K $400K $800K $1.6M $3.2M

The Exponential Effect of Compounding Return

!tarting amount "#R Year Ending "mount

$100%000 36% 1 $142,576

36% 2 $203,279

36% 3 $289,828

36% 4 $413,225

36% 5 $589,16036% 6 $840,002

36% 7 $1,197,642

36% 8 $1,707,551

36% 9 $2,434,559

36% 10 $&%4'1%0((

*Initial investment of $100k earning 36% non-compounded

return per year, compounded monthly, for 10 years

!ote" #his tale is for illustration purposes only

As you can see from the tales aove, )he ule of 2 is an appro+imation for douling yourmoney every other year 8the second tale shos e+act douling:$ oever, y comparing theto tales, you#ll notice that the end result is practically the same$ 4y using a critical mass ofstarting capital and y ma+imi/ing the effect of the poer of compounding, you couldpotentially create a net orth of over B?,""",""" in Hust 1" years33 )hat means you couldpotentially ecome a multimillionaire ithin a decade$ No, this is an illustrative e+ampleonly$ o this plays out in reality may e etter or it may e orse$

@ome of the traders generate tripledigit, noncompounded annual returns, not Hust ?M%per year, and this ould positively impact your overall returns$

Unless you have your money in a oth IA, then you ill have to pay ta+es on yourannual gains, hich ould negatively impact your overall annual returns$

If you use 0 for your initial investment capital, then you ould have to repay that lineof credit, plus the interest, hich ould negatively impact returns in the first fe years$

;ou may choose to not reinvest all of the profits and instead ta&e some out as personalincome, hich ould negatively impact your overall returns$



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;ou may have a couple of accounts for different strategies, some for passive incomepurposes and a couple of accounts for longterm ealth creation$

$ere is the 9ey oint&the amount of passive income you generate is directly related to 1: yourrate of return, and 2: the si/e of the 6nest egg7 of capital you start ith or 6investment det7 that

you can otain and invest$

)his method of generating passive income results in5

1$ aving discretionary time for family and hoies

2$ aving discretionary income to payoff creditors

?$ aving more than enough income to meet your needs

9$ aving e+tra time to dedicate to community involvement

!$ aving income left over to contriute to the charitale and philanthropic causes youdeem most orthy, such as feeding the hungry, clothing the na&ed, and administeringrelief to the sic& and afflicted 8the est method is anonymous giving, although it can edifficult at times to remain anonymous:

The 3ig Picture& $o" it All Fits Together in a Hisual odel

Copyright 2014 TheFinancialFreedomFoundation.org All Rights Reserved Page 1?

ManagedAccount

Tradn

g

!ro"t#

100% o" $ont&' (ro"t# ren)e#tednto 'our Managed Account

to ra(d&' ncrea#e te #*e o" 'our accounttroug co$(oundng return#

)ealth Creation !trateg*)ealth Creation !trateg*

It all deends on

your amount of

starting caital! and

the comounded rate

of return.


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4elo is an analysis of the 1ealth Creation Strategy, oth ith and ithout ta+es, dependingon if the managed account has ta+ advantaged groth y eing in an IA or not$ ;ou#ll noticethat a ?M% noncompounded return is the e*uivalent of a 92$!% compounded return$ Numersin 5lueare the assumptions 8if you do not li&e detailed financial analysis, Hust s&ip this tale:$

With the Wealth >reation @trategy, you#ve created an annual passive income of over B10 peryear y starting ith Hust B1""C and having it compound in your account for 1" years$


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still achieve an average of at least ?M% return in your diversified portfolio$ When compounded,a ?M% return on B2""C is an income of @M!=== er year$ )his passive income stream can eput in place in as little as ? or 9 months ith minimal up front capital investment3 )hat isleverage, aritrage, and compounding going to or& for you3

Another ay to phrase this is that for every B2""C that isn#t or&ing for you in the investment

model, it#s another B?9" per day that you#re not receiving 8ased on a regular or& ee&:$4ased on an ( hour or& day, that#s aout B92$!" per hour you are Hust asting, due to inaction$Inaction is e+pensive$

This sounds too good to 5e true

When sharing our investment model ith family and friends, e fre*uently heard that itsounded too good to e true, ecause it dramatically outperforms any of their traditionalinvestment methods$ @uperior performance is not an accident$ It is more difficult to design aroc&et ship than it is to design a icycle$ 4icycles ma+ out at speeds around ?! miles per hour$oc&et ships circle the earth at ?!,""" miles per hour$ When designing the model our e+plicitgoal as to outperform traditional investment results$ We invited our family and friends toshoot holes in the strategy and they couldn#t$ I guess that means the strategy is ullet proof, ifapplied correctly$ In the end, the only valid response as5 6it is good, and it is true-the proofis in the eating$7

If it is so easy! "hy isn7t e%ery5ody doing it

We &ept our investment model as simple as possile, ecause comple+ity creates inefficiency$It is human nature to ma&e things unnecessarily comple+ 8ho many pages is the ealth >are4ill or the I@ ta+ code:$ )he strategy may seem ovious to you no, ut it asn#t ovious to

you efore you read this report or else you ould already e doing it$ )here is a ide gapeteen &noing and doing$ opefully, e#ve e+plained the concepts ell enough that anyonecan feel comfortale in applying them$ oever, e do reali/e that some people cannot escapetraditional investment mindsets or cannot stop thin&ing li&e employees, feeling oliged to 6earn7their money y trading their time for money$ Fod less them$ We enHoy the arm grandfatherlysmile hen e al& into Walmart, ut inardly hope that person feels li&e they are ma&ing thehighest and est use of their time, talents and resources y standing there and smiling at us$

1hy doesn7t 1all Street tal9 a5out this oortunity

It#s simple5 0anaged accounts are not 6securities7$ ommodity


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Learn more a5out "hat you7%e 5een missing:

We invite you to see hat you#ve een missing$ )o create e+cess cash flo, you must . 1ma+imi/e income and . 2 minimi/e e+penses$

)o ma+imi/e income, you can apply these financial concepts ith professional traders that you

find on your on, or you can Hoin our


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LEAL 2ISCLAIER5 WE AE N) N D WE WAN) ) 4E IAGADJI@@, GANNE@, A))NE;@ >N@UG)AN)@$ )E INN)AINED IN )I@ E) I@ E$ )I@ I@ N) A @GI>I)A)IN) 4U; @EGG @E>UI)IE@$ WE 0ACE N FUAAN)EE@, EPGI>I) I0GI>I), WI) EFAD@ ) AN; GEFAG, )AP, IAG 0A))E N )I@

WE4@I)E IN )I@ E)$ INJE@)INF IN 00DI)IE@, AND@)>C@ >AIE@ EGE0EN)@ < I@C AND G@@ < IN>IAG I@ @@I4GE$ A@)EE I@ N INDI>A) < U0EN) I@N) INJE@)0EN) ADJI>E$ )I@ D>U0EN) I@ N) AN I@IN@ @UGD N) 4E 4A@ED@GEG; N >A)@ AND FA@ E@EN)ED IN )I@ D>U0EN), A@ )E;JIDE NG; GI0I)ED INE>C WI) A GI>EN@EDIAG ADJI@ 4EI@IN@$ WE DN) END@E AN; )ADE, 0ACE), INJE@)0EN) 0E)D$


Passive Income Unveiled

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