Money doesn’t grow on trees, but it does create a stream. Finding the right income stream is what we are all after. A simple straight stream that doesn’t have winding bends, boulders, and rapids to navigate.
Right now, investing in the stock market feels like a Class 5 rapid, instead of a slow and steady stream. It’s exciting if you’re 20 yrs old and your only possession is your backpack. However, its terrifying at 65 yrs old and everything you have worked for your whole life is in the raft.
Whether you’re investing in McDonald’s or an apartment complex, you’re picking an income stream that at the end of the stream there is hopefully a profit. There are millions of ways to create an income stream.
However, there are very few that don’t have multiple variables that create excessive risk. Especially in the volatile boom & bust economic market we are facing in 2020.
The key is to find investments that have less variables, that in turn, create a more reliable and predictable income stream.
The picture above is a controlled manmade stream (aqueduct). They built the aqueduct so they could have a predictable stream. A controlled and predictable income stream is the "Holy Grail of Investing". It's the one with the least amount of variables with the shortest path to success.
Investing as the lender (AKA Being the bank) is the straightest income stream with the least number of variables. The heart of the investment has only three variables:
1.) The promise to pay (borrower)
2.) The collateral (property or something of value in case they don't pay)
3.) The lender (The money exchanged)
The risks are mitigated at the start of the investment through due diligence and you only have to manage the downside if there is ever one.
To put it another way, it could be years of a reliable income stream before you have to make any other decision. Meanwhile, your investment is slowly becoming less and less risky.
Why? Because the borrower is paying down the principal owed every month, which increases the amount of equity (difference between collateral value and the loan amount).
You can't control Wall Street but you can control Main Street. It's time to get back to simple investments secured by brick and motar real estate.
It's better to be the bank....Click here for the "Top 10 Reasons to Invest"
Interested in hearing more? Set up a time to talk click here.
Kyle Zimpleman, Managing Member