The most efficient way of creating passive income
In this article we discover why property investment is the most efficient way of creating passive income – just one of the many reasons why property investment is the ultimate business. The objective of establishing a business is to make money. There are of course, many ways to make money, but some are simply more efficient than others. According to the Oxford dictionary, efficiency is defined as “doing something well and thoroughly with no waste of time, money or energy”.
The concept of passive income
In light of this, the ideal business concept would be one that allows the business owner to make money “well and thoroughly” but without wasting any “time, money or energy”. So unless you are specifically looking for a difficult, complex, time-consuming or labour-intensive way to make money, the ultimate goal of business is to create passive income. Passive income allows a business owner or entrepreneur to make money without spending time, money or energy in doing it.
There are not many businesses that create passive income. Professionals such as doctors, lawyers or accountants do not create passive income, because their income is linked to their time and expertise. A retail or wholesale business does not produce passive income – it only makes money while it is open and selling goods. When the doors close at night, or the business is closed down, it no longer produces an income. So how does one produce passive income?
Acquiring passive income
Ultimately, true passive income can only be created by acquiring assets that generate an income entirely independent of the input of time, money or energy of the owner. Examples of assets that create passive income could include shares in a business entirely run and managed by employees; savings that earn interest; investments that produce returns; or royalties earned on the sales of a book or music, or on a franchised business concept or a patent.
But none of these options are the most efficient way to produce passive income. Acquiring shares in a business, as well as savings and investments, requires capital, and offers no direct control over an independently-owned business. And creating a best-selling book, a chart-topping song, a franchised business system or an innovative patent worth billions requires a significant investment of time and energy.
Invest in property
So what is the most efficient way to create passive income business? Buy-to-let property investment! It allows the business owner complete control to generate the most passive income with the minimum input of money, time and energy.
An example will illustrate: You buy a flat and let it to tenants, according to the proven P3 Investment System, which provides the step-by-step procedures, the tools to do it properly, as well as the ongoing support to ensure success – thus requiring minimal energy. The management of this business is outsourced to professionals for a small percentage of the monthly income, which means this business requires minimal time.
Now you have a business, over which you have complete control, which required very little of your own money (capital outlay), can be classified as an asset and generates income from the rental charged. This asset is tangible and concrete – it can be seen and touched (unlike shares or royalties) – and it steadily appreciates in value over time. The efficiency of property investment in producing passive income is dynamically expanded when considering that you don’t even have to use your own capital to buy the property. You can borrow the money from the bank – allowing you to earn a passive income from an asset you do not even own yet!
This is true efficiency – a sustainable, independently-owned business that produces a passive income (and capital growth), requiring little or no money, time or energy. Property investment done the right way is the most efficient way to create passive income. And for this reason among many others we will still explore property investment as the ultimate business.