I’ve been thinking a lot about what has been going on in the economy right now. We are in the middle of the two-week shut down/self-quarantine that will hopefully stop the spread of COVID-19.
This will eventually pass, but I started thinking about all of the other people in the world and how they make money.
As Investors, We Make Money Differently Than Most, Because Our Income is Passive
We work one time and we make money over and over again. Rental properties are our employees doing all of the work.
We aren’t working anymore, but we may have property managers, contractors, realtors, wholesalers, etc., doing work for us, which is great because it gives them a way to provide for their families. Ultimately, our properties are the ones making us money.
Right now, there are a lot of people out of work or laid off, because the economy is so rough. The stock market is a roller coaster right now, going up and down. I personally would not be selling stocks right now, because the stock market has taken a huge hit, but I am horrible with stocks.
I am great at buying high and selling low.
Don’t do that!
I am telling my dad not to sell his stocks right now, because the market has taken a beating and is 20 or 30 percent down.
Everything the government is doing with the $2 trillion relief bill that gives everyone money, lowers interest rates, and changes tariffs to benefit America will provide more money for the market.
With real estate, every time there is an up, down, or sideways market, I make money. I make the most money on a down market because I buy more properties.
Since the Last Crash, I Have Made Money Every Single Day From My Rental Properties
I have had passive income coming in every single month.
When the economy goes down, other businesses, jobs, and side hustles may not be able to weather the storm.
On my other podcast, Successfully Unemployed, I interview people who own their own businesses.
These are great businesses, but what happens in a recession? I want to make money consistently, even when the economy goes south.
Market corrections are inevitable.
Rental Properties are Designed to Make Money Without Working
When you have a rental property and a tenant, account for all expenses in the rent and then make sure you tack on a little more to go into your pocket every month.
In order to recession proof your life, your money, your business, and your investments, you need to make money when other people aren’t.
Whether there is a job loss or if we get to a point where we cannot leave our houses, I still make money.
In times of growth and plenty, when the economy is good, and we are all fat and happy with how much we have, possession wise, we can throw something away, order something new on Amazon, and get it two days later.
How to Recession Proof Your Life and Money
The things you implement in your life now will help you when a recession comes. The first thing you learn with rental properties is how to make money each month without working.
I make $250 or more in passive income from each of my 30 plus rental properties every month. We are blessed!
Some properties make up to $600 a month.
Learn how to make money without working or counting on somebody else. Start buying real estate and investments that make you money.
Remember, when investing in real estate, a good business model is to buy lower priced homes and build a system that makes you $250 a month per property.
1. Get Stable Income
Get stable income in real estate rental properties: Start buying rental properties and build systems that make you $250 per month, per property. People may lose jobs and move out to find something cheaper, and that is okay.
If someone moves out of your property, you will still own it and you will get someone else in there. Another option is to do Section 8 housing. Buying lower priced homes is less risky.
Certain areas of the country are less expensive, and, at Master Passive Income, we set up systems, have other people do the work, and make it automatic. You will make money all the time, over and over again, because people need to have a place to live.
Buying rental properties solidifies your income. If something happens to me, my family is still provided for, because they are getting money from these properties.
Check out my free course by texting RENTAL to 33777. I am creating a membership so you can have a community of other people and you can learn from them and be encouraged by them.
A community keeps you accountable. In addition, I am creating group coaching, and it will be much more affordable to you than individual coaching. I have five courses that will teach you to build a business from beginning to end.
2. Have an Emergency Fund to Protect Yourself
Have an emergency fund (at least one to three months of expenses): Be ready for worst case scenarios.
Be ready for worst case scenarios. What if you lose your job? I was laid off once, but, thankfully, I was able to find another job shortly after. I didn’t have a good emergency fund at the time.
Develop an emergency fund with at least one to three months of expenses saved up.
I now have an emergency fund, in case something happens to my rental properties, and I know my family will be okay for about five months.
You also want to have this fund in case your car breaks down. You don’t want to go into credit card debt, if you have a big expense.
An emergency fund will help you stay out of debt.
3. Live Well Below Your Means
Live well below your means: Do this during good times and bad times. Live well below your means: Live frugally during good times and bad. Don’t just live below your means, but well below.
I live in a 1,250 square foot home that used to be my rental property, with my wife and four kids, and we homeschool our kids. The housing market has been so high and my tenants were moving out.
We were living in California and decided to move into my rental property until housing prices went down. We have now been there for three years!
I could go out and buy or build a house, but the market for personal home ownership is really high.
My students are buying rental properties all the time all over the country and making money every month, so it is the right time to buy and invest for cash flow.
Even though I have plenty of money coming in, I know that eventually I will need extra money.
Live below your means right now and set that money aside for an emergency fund and eventually for investing in rental properties.
Live well below your means: Do this during good times and bad times.
4. Find Ways to Make More Money
Find ways to make more money:
On my other podcast, Successfully Unemployed, I have interviewed about 70 business owners/entrepreneurs.
At this point, I have only released about 25 episodes. All of these people make money outside of working a J.O.B. (Just Over Broke). Listen to some of those episodes.
You could work for Uber or Lyft, rent out a room in your house, sign up to do grocery delivery, or do whatever can generate more income.
I save additional income so I can buy more rental properties.
Make more money so you can weather an economic recession. The economy goes up and down and you need to be prepared.
5. Evaluate Your Risk Tolerance
Evaluate your risk tolerance: If you are risk averse, buying stock in a volatile stock is probably not the best move. Another risky thing is flipping a house.
If somebody is flipping a house right now that they bought two months ago, they may have a difficult time selling it, because of COVID-19. This same thing happened in 2009, and people lost everything.
When the stock market is high, it may be wise to take some money and move it to something safer. Place bets accordingly. If you walk into a casino with $100, put it on the table, and lose $100, it is gone.
What if you win? If you win $50, maybe pull $50 off the table and put the $100 back down. You are still playing with the original amount.
If you made $100, and you are now at $200, take it off the table and put it in your pocket so you walk away ahead.
Jim Cramer once said, “Bears make money, bulls make money, but pigs get slaughtered.” If you leave your money in the market too long, eventually it is going to get slaughtered.
When I invest in real estate, I try to take out all of the risk. I know the expenses and income with every rental property I buy.
Everything I go over in my course is to teach you how to make at least $250 a month.
Rental properties are the least risky thing you can do, because you always have the land and you have insurance.
Real estate has been around forever and it is the most recession proof business you could ever hope for.
If your tenants lose their job and need to move out, you will get someone else in there. You still own the property as long as you can cover the mortgage.
6. Diversify In Other Areas of the Country
Diversify your investments: I diversify not by buying stocks, cars, or paintings.
I diversify by buying in different areas of the country so I have money coming in from all over.
If one area gets hit by a hurricane or flood, I’m diversified. Warren Buffet said, “Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.”
If you are buying in the stock market and are diversifying by buying stocks all over the world or in different sectors, this is how you diversify.
Why diversify if you know you are going to make money from real estate, why would you diversify?
Why would I take money out of real estate where I make money and put it in the stock market, when I don’t know as much about it.
Diversify in whatever you are investing.
Diversify in different areas in the country — don’t just settle in one city or one state.
7. Keep Your Credit Score High
Try to keep your credit score high: In good time it is easy to get credit, but in hard times, it is difficult.
During recessions, banks only lend money to people who don’t really need it.
If you need a loan to save your business, the bank doesn’t want to risk being a last resort. It was extremely difficult to get a loan during the last recession.
Increase your credit score as high as you can and keep it high
8. Learn to Be Frugal
Be frugal: Spend as little as possible on items. Look for ways to find these things cheaper or buy used.
I am currently selling a mattress on Facebook Marketplace.
Save whatever money you can, because it will help you buy properties when there is a recession.
Make sure you have money coming in every month through real estate rental properties.
Recession Proof Conclusion
With work right now, you can make your income, money, and life recession proof.
It is not easy, I’ll admit that. But, nothing worth it ever is easy.
If I can do it, so can you!
I teach all about how to get out of debt, how to make more money, how to save more money, how to increase your credit score, and how to do everything with your finances to be rich and save $10,000 so you can buy your first property.
Get my free real estate investing course and be on the lookout for my special podcast to get half off the Real Estate Wealth Builders membership that has five courses, including The Ultimate Real Estate Investing Course that is worth $3,000. The membership also includes group coaching.
I want to see you succeed!
Get my free real estate investing course and be on the lookout for my special podcast to get half off the Real Estate Wealth Builders membership that includes five courses, including The Ultimate Real Estate Investing Course that is worth $3,000.
The membership also includes group coaching. I want to see you succeed!
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- What Is Equity and How to Make Money From It
- What Is Escrow In Real Estate?
Premium online courses for any level of investor: beginner-advanced. Completely go at your own pace and can be taken through "Self-Study" or through "Membership".
Inside the membership, attend live 90-minute Group Coaching sessions with Coach Dustin Heiner as he and the MPI Coaches teach you how to build a successful real estate investing business.
Connect with the MPI Coaches and the other like-minded investors inside the MPI Mastermind Community. Ask questions about investing and get feedback how to be successful in your business.