And he’s back! It’s time for another Q & A with entrepreneur and real estate investor Philip Michael. In this segment, our viewers asked questions about Fundrise, REITs (real estate investment trusts), what to do with an extra influx of cash and how to use your current salary as seed money. For the full responses, check out the video! Get ready to learn a thing or two about real estate and personal investing.
Q. What do you think of Fundrise or REITs instead of getting into real estate?
A. What you’re really asking is, “Should I be an active real estate investor or a passive real estate investor?” … In terms of Fundrise, or even REITs with our company, you can buy into existing properties where the property managers and the team do the work. They have people that are professionals at managing real estate, and you just get ownership … That’s how you get the passive income.
At the end of the day, it goes back to the main question: Do you want to be an active real estate investor (a landlord)? Or do you want to be a passive real estate investor where you just collect the money? Let the other people do the hard work?
Q. I just received a $9,000 settlement. What are some good investment ideas?
A. I know you’re asking, “How can I flip this $9,000 and turn it into $100,000 or $1 million?” That’s not exactly how it works, but the $9,000 is a really good place to start. When I first decided to own property, I set a goal for myself. I was writing to make money and getting paid on PayPal. So, my first goal was just, “Let me get to $10,000.” Eventually, I figured out how to own a three or four-unit property … So, that basically is a partial answer to your question: You can take that $9,000, and you can put it toward a multi-family property …
If not, because your buying power is diminishing every single day due to inflation, I would put it somewhere where it travels in accordance and concert with inflation. The best way to do that is to go to the stock market. Index funds are the safest bet.
Q. What’s a good business to start to quit your $100,000 a year job?
A. I think you’re asking the wrong question here. I would look at the $100,000 a year job as your seed money. Many people would love to have $100,000 to start their investment, not saying all your money should go to that. You have a job that pays you enough money that you can take some of it out and invest in your business. In addition, you’re not working 24 hours a day, so you have more time actually to work on your business.
The thing is, any type of business requires hard work until you get to the point where it makes you the money that you want. So you really have to ask yourself, what are you passionate about? What would want to do if it didn’t pay you? … See if you can find a way to monetize your passion. And then eventually, when your passion is monetized to the point where you no longer need your job, boom! Off to the races.
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Want more from Philip? Check this out.