Buy These 5 Assets To Replace Your Paycheck (And Never Work Again)

The success formula the school teaches you is a lie. We are taught to go to work. That way you can get a nice big paycheck. Then you can use your paycheck to buy the nice stuff that you want. The nice house, the nice car, the nice clothes, the nice vacations. And when you want more stuff, you're going to have to keep working harder. That way you can make more money so you can buy more stuff. And now it becomes a hamster wheel. You're always working to have more stuff. And if you stop working, the money stops coming in. Now you can't afford the stuff. But this is not what wealthy people do. Wealthy people and the people who become wealthy, which is the minority of people, what they do is they work hard to earn money and then some of that money is going to buy stuff. But what they're really trying to do is they're using their money to buy assets that pay them with cash flow. This is money that you make without having to work. Now what you're doing is you take the cash flow to buy your stuff. That way if you were to stop working, you still have the cash flow to keep living your life. In this video, I'm going to show you the five best cash flowing assets that you can buy right now. That way, you can get to the point where you don't have to keep working to keep living your lifestyle because your assets can pay for all of your expenses. So, let's break it down. Number one are dividend paying stocks. Let me start by explaining how it works and then let me give you some specific examples that you can consider buying. The first one that I'm going to go over is dividend income. Number two is going to be rental income. Number three, interest income. Number four, royalty income, which is now a lot more accessible than it used to be. And then number five is other income. And then I'm going to wrap up this video with the math on how you can get to $80,000 a year of cash flow by doing these five things that I'm going to talk about today. So let's break this down one by one, starting with dividend income. And I'm going to start by explaining how it works. Then I'm going to give you some specific examples that you can consider buying. Between the years of 1988 and 1994, Warren Buffett went out and bought something like 1 3 billion of the CocaCola stock. This is the stock that he owned. And Coca-Cola pays out a dividend. A dividend is a profit share check that some companies like Coca-Cola have so much extra profit at the end of the year that they don't know what to do with it. So instead of reinvesting it back into the company, instead of saving it for an emergency, they just give it away to the shareholders, their investors. And in this instance, Warren Buffett is one of the investors in Coca-Cola. He was one of the largest investors of Coca-Cola because he invested over a billion dollars into it. But because that company pays out a dividend, he got cash flow. And over the years, this cash flow has grown. Warren Buffett does not have to go into the Coca-Cola company to work. He doesn't have to sell a single can of Coca-Cola. He just owns the company and gets his piece of the profits. Well, in 2025, this ownership, this $1.3 billion of ownership that he put into the company paid him about $848 million in 2025. It took many years to get to this number. But now, this is cash flow that he gets without having to do anything except owning that same stock. But just breathe. I don't have a billion dollars. You don't need a billion dollars. You don't need a million dollars. You don't need a $100,000. You don't even need $1,000 to start. What I'm trying to show you is that he makes almost his entire investment back every single year in cash flow without having to sell a single piece of his stock because he invested in dividends into a good company. The way the dividends work is you're investing in a company that has strong cash flow and profits and then you get your share of profits without having to go and work in the company and you don't have to do anything except own the right company. So, let's go a little bit deeper. If you wanted to invest your money and generate this type of dividends, there's two ways to do that in the stock market. You can invest your money into an individual stock. That's what Warren Buffett did when he went out and bought the Coca-Cola company. Option number two is you can invest your money in a fund. A fund is a basket of companies. And now there are different types of funds because there are funds that give you broad exposure to the markets. For example, the SNP 500. The S&P 500 is a group of the 500 largest companies in the stock market. And so this is just a broad basket fund giving exposure to the general stock market. One of those companies is going to be Coca-Cola. You'll have Amazon. You'll have Apple. The idea is you're just investing in the top 500 companies. Now, when you're investing in the S&P 500, you're going to get a dividend because many companies here like Coca-Cola pay out a dividend. So, you're going to get your share of dividends here. But then there are more specific funds that are designated for dividends because now these are funds that are investing solely in companies that have been paying out dividends and growing your dividends. And so if your goal is cash flow, absolutely you can get cash flow here by investing in the general stock market because there are companies that pay out dividends or you can get even more niche and look for these types of specific dividend paying funds. That way you can try to maximize your cash flow and focus in on the cash flowing companies. When you invest your money into an individual stock, you have more risk but also more potential return. Because if Warren Buffett invested his billion dollars into Coca-Cola and then they went bankrupt, not only did he lose his cash flow, but he lost the billion dollars that he invested. When you invest your money into a fund, you have less risk for less potential return. Less risk because now if one of these companies, say in this instance, Coca-Cola went bankrupt, there's 499 other companies in the fund. So, some of the losers are balanced out by the winners. If your goal is not to study financial statements like cash flow sheets, balance sheets, and income statements, if your goal is not to listen to earnings calls, if your goal is not to keep up with companies, then investing in funds is a much simpler option. But if you want to be a lot more involved and you're okay taking on that additional risk, well, then you can consider investing in individual companies. I'm going to show you what I mean by giving you five examples of dividend funds that you can consider investing in. But I got to give you the disclosure. I'm just a random guy on YouTube. Investing has risks. You are never guaranteed to make money when you invest. In fact, you will lose money at some point. So, make sure you always do your own due diligence and never blindly trust a random guy on YouTube. My goal is not to tell you what to invest in. My goal is to show you how you can start thinking like an investor. The first type of dividend fund that you can consider investing in is what I call a steady grower. For example, SCHD as a disclosure. I'm personally invested in SCHD. This is a fund that's going to give you exposure to the Schwab US Dividend Equity Fund. It's going to give you exposure to about a hundred quality United States dividend paying companies that are not only working to increase their dividends but also grow as a company. The idea being this is focused in on growing companies that have growing profits. So this fund is looking at investing in companies that are not just trying to grow but they've been growing as a company and they've been trying to grow their profits. What we have seen is that in the last decade or so this company has been increasing its dividend payout by around 10% a year. You can compare that to your wage growth that your boss is giving you. Example number two is even more niche. Trying to invest in select dividend aristocrat companies. So the example here that I'm going to talk about is N OL Noble. What Noble does, it only invests in dividend aristocrats in the S&P 500, which means number one, you have to be a company in the S&P 500, meaning you're one of the top 500 companies in the world. Then number two is you must be a dividend aristocrat which means you must have paid out and increased your dividend every year for the last 25 years or more minimum. So it's a very high bar and threshold to get into this fund which is why it invests in very few companies. But the idea is you were getting strong steady dividends and steady dividend growth with this fund. Example number three is to invest into international high dividend companies. For example, VMI. As a disclosure, I'm personally invested in VMI. This is a fund that's investing in international companies outside of the United States that have dividends that are working to grow. The idea being if you're outside of the United States, you have the advantage of being able to grow as a company, but also as a country. So many times you'll see that these companies are paying out even higher dividends and can see even faster growth because it's a growing country and a growing company, but there's more risk because it's not the United States. So more economic risk, more political risk, more geopolitical risk, but more risk for more potential return, which is why you'll generally see higher yields here, but it does come with more risk. Option number four, I'm not personally a big fan of, but I know it's been gaining a lot of popularity, so I want to talk about it. This is investing in funds like JPI, which is a fund that pays out income because it's in the business of selling options. So, it's not trying to own investments and pay out a share of profits. Instead, what it's doing is trading options, getting the profits from trading these options, and then it's paying out the interest from them. So, generally, what you're seeing is higher interest payments today, but less growth in the actual value of the fund. Again, I'm not a huge fan of options. I like owning the assets. I like owning the underlying value of the asset, but this has been growing in popularity. So, I just want you to understand what it is. And then number five is to get exposure to real estate. I'm going to talk more about real estate rent in number two, but if you don't want to own the actual property, the next best thing is to invest into a company that's giving you exposure to the property. So, you're investing in what's called a real estate investment trust. These are companies that are investing in real estate and you're buying the company that's investing in real estate and now you're generating the cash flow by owning the profits from the real estate holding company. Again, you can go out and invest in individual companies or you can invest in a fund like VNQ. This is a fund created by Vanguard that's going to give you exposure to these types of real estate companies. So, if you believe that real estate has a lot of upside coming, you can invest into the real estate industry without having to worry about properties and get your share of cash flow with ETFs like this. But there's one big mistake I want you to be aware of. Because this is a mistake I used to make early on in my investing career, which is you start to chase the yield instead of the actual growth. Which means you look at a company and you see that it's paying out a huge dividend and now you buy it because the dividend looks like it's going to make you rich. But take a look at this. Let's assume that you want to buy this company right here and it's trading for $200 a share. That's the trading price of the company. That's how much it's worth right now. and it's paying out a dividend of $10, which means it is a five% dividend, which might sound good, might sound bad, depending on who you are, but that's a pretty fair, strong dividend in today's economy. Well, now take a look at this. What happens now if this stock price fell all the way down to $100 and then did not change the dividend yet? Well, now what happens is you're not getting a 5% dividend. You were actually getting a 10% dividend. Now you look at this company and say, "Oh my god, this is amazing. I'm going to get a 10% return on my money, a 10% dividend. I need to come in and buy." Or maybe it falls even further to $50. And now you say, "Whoa, this is not a 10% dividend. This is a 20% dividend." And so the mistake that I did was I was looking for this number. I was looking at how big the dividend was and then I was coming in and buying. And then what I realized was sometimes what happened or many times this company was struggling but they just hadn't adjusted their dividend yet. And so now what can happen if the company is struggling is number one they could come in and say, "Oh, we're not going to pay out a 10% dividend. We're only going to pay out a 2% dividend." or even worse, we're not going to pay out any dividend at all anymore because we need to keep our profits in our bank account. The second thing that can happen, which is even worse, is that this company goes all the way down now to $0. It goes bankrupt, which is why you don't want to be chasing the yield. It is so important for you to be understanding the actual value in the company itself. Because if you can invest in a company with good value, it might not look as attractive today, but that gives you the opportunity to see growth in how much cash flow you're getting. It gives you steady cash flow and then the value of investment goes up and that's what's going to give you the real wealth over time. That's what Warren Buffett was able to do is he look for a strong company and that strong company continued to grow their dividends year after year after year after year, which now allows him to make pretty much his entire investment back every single year without having to sell a single share of the stock. This brings us to number two, rent. Now, if you want to go deeper into how you can actually find good investments in the stock market and how you can actually invest your money to build wealth and find hidden opportunities, I wrote a full book on this. is called ABB Always Be Buying: How to Find Opportunities in Any Market. And you can grab a digital copy of this book for free just by clicking the link down in the description below. So, if you want to go deeper into how you can find opportunities, I encourage you to download a copy of the book and read it for free. And when you sign up for the book, you're also going to get access to Market Briefs, which is my newsletter for investors, completely for free as a bonus. So, if you are interested in that, again, I have that link for you down in the description. Now, let's talk about real estate investing to generate rent. And the idea here is you're going to go out and you're going to buy a property. Now, this property could be a single family house. It could be an apartment building. It could be a storage unit. It could be a mobile home park. It could be an office building. It could be a restaurant building. The idea is you're just going to buy the building, but you're not buying it to live in yourself. You're not buying it to use yourself. You are buying it to rent out to somebody else. So, let's say you go out and you're going to buy this $150,000 home. Now, I know what you're thinking. Well, Despite, where are you going to find a house for $150,000? Well, my office is in downtown Detroit, Michigan. And I can tell you that around downtown there are great neighborhoods, great cities where you can buy properties exactly like this. You find a house for $150,000. Then you're going to rent it out for $1,500 a month. Now what happens is you have to pay for your expenses because when you are the landlord you got expenses you got to pay which include your property taxes your insurance your maintenance your management fees and your vacancy costs because there's going to be times where tenants are not there. So now if we assume that those five expenses, property taxes, insurance, maintenance, management, and vacancy eats up, let's call it $800 a month. That leaves $700 a month left in your pocket as profit. Now, you might say, "Well, just what about my mortgage?" Sure. Now, you can buy this property cash, and now you invest $150,000, and you get the $700 a month. And now, if you get a mortgage, you would subtract the mortgage here. The situation in today's housing market is a lot of people are going to struggle finding rental property deals that are cash flow positive without big equity down payments. So, if you're just putting 10 or 15% down, you're probably not going to make any money every single month. You're going to have to be putting 20, 30, sometimes 40, sometimes 50% down for these deals to make sense. And the reality is in today's economy, if you're not willing to have that positive cash flow, it does not make sense to go out and invest in real estate because well, a lot of people like this idea, especially in New York and Miami and LA and some of those big pockets, is we will buy a property and lose money every single month because we know that we're going to be able to sell this property for a big profit in two years or five years. There's only one problem with that. you don't know if you're going to be able to sell it for a profit. And that's what gets people into a lot of trouble is they're willing to lose money every single month hoping that they can sell it for a profit in a year or 5 years or 10 years or whatever it is. I don't want you to think like that as a real estate investor. I want you to think in terms of positive cash flow, which means you're putting money in your pocket every single month. If it's not cash flow positive, do not buy it. So, let's assume for this instance, just to keep the numbers simple, that you are buying this property all cash. You put $150,000 in and now you're making $700 a month. That means you are making $8,400 a year. Now, the first thing you want to understand is, is this a good deal or a bad deal? Is this good cash flow? Is it bad cash flow? And the way you look at that is you take a look at how much profit you're making, $8,400 a year, and you're going to divide that by how much cash you put in. So, in this instance, we're putting in $150,000 of cash. If you're banking with debt, you're going to look at how much equity you put in. So, $8,400 divided by $150,000 tells us that we are making about $5.6% cash on cash return. Now, the question is, is this a good deal? Is this a bad deal? This is going to depend on you. It's going to depend on your goals. It's going to depend on whatever you're looking to do. For me, it is not something that I would do. I like to look for 7% cash on cash return. Now, how do you find that? Well, sometimes you have to look in different neighborhoods. Sometimes you have to look at what's called value ad properties where in this instance, maybe the property is in pretty rough shape. Nobody wants to buy it because it looks ugly. It smells like crap. There's holes in the walls. The carpet is disgusting. It looks like nobody has renovated it for 45 years. That creates the opportunity to come in and buy it because nobody else wants to touch it. You can buy it at a huge discount. renovate it for a fraction of what the true cost of the property is and now you can buy the property for a discounted price. So there's a lot of ways about it and in certain markets it is harder than others. Like it's definitely harder today than it was 15 years ago, but it's still available today. How do I know? Because I am still seeing deals today that allow you to do that. So more work, but the possibility is there. But now take a look at this. You have $8,400 in your pocket at the end of the year. This is your cash flow. Now, you can just work to stack properties and stack the cash flow because every time you add another property, you're adding more money into your passive income every single month. And remember, this is managed by a property manager. You're already paying the expense for that. The property manager's job is to handle all the day-to-day work. So, their job is to make sure that you don't have to talk to the tenants. You don't have to deal with anything except reviewing your monthly financials to make sure the money actually hits your bank account. So, their job is to make sure you get paid. If they're not good, you need to fire them and find a better property manager because I can tell you that there are good property managers and then there are bad property managers. And there's a lot of bad ones, but there are some good ones if you're willing to put in the work. So, you have $8,400 in your bank account. Now, normally what you would say is you have to pay taxes on $8,400. But with real estate, that's not necessarily true because as a licensed attorney who is not your attorney, what I can tell you is that real estate has some of the biggest and best tax breaks that a tax code has to offer. And the first tax break that they give you is something called the depreciation deduction. And what it says is that because your property is getting older, you deserve a tax break. Even if the property is going up in value, even if you're making positive cash flow, you deserve a tax break. How much? Well, the way that they calculate it is first they have to separate the value of the land versus the value of the building. So, for simplicity, let's assume that the value of the land here is $30,000 and then the building, the actual house is $120,000. Well, then what they do is they say that you cannot depreciate the value of the land. You can only depreciate the value of the building. Now, there's two ways that you can depreciate it. And stick with me. I'm going to try to simplify this as much as I can. There's two ways that you can depreciate the value of the building. Number one is the simple way and then number two is the more complex way. The simple way says that if it's a single family house, you take the value of the building, $120,000, and then you're just going to divide that by 27 12. Why 27.5? Well, that's just what the IRS says. This equals a little bit over $4,300. But what that means now is you can take a $4,300 write off every year for the next 27.5 years. So you made $8,400, but now you're going to get a paper write off of $4,300. A paper write off means it's not actual money that you lose. It's not money you have to pay. It's just a tax write off that you get on paper. Which means you're going to tell the IRS, I made $8,400. That's how much money I have in my bank account, but I'm only going to pay taxes on $4,100. So, you get to reduce your taxable income. That's the simple way of doing it. This is called straight line depreciation. But you can get a little bit more complex if you get a good attorney. You get a good accountant. Now, what you can do is something called accelerated depreciation, which means you get bigger tax breaks right now. So, in this instance, you got a $4,300 tax break. But what you can do if you have a good accountant is now you can say, "Well, you know what? We actually shouldn't be doing a $4,300 depreciation a year. We should do probably a $13,000 depreciation in year one." Now, I'm not going to go through the calculations of how you do that because it gets a lot more complex. You need really a good accountant or a good tax attorney to help you with this, but you want a $13,000 depreciation, which means now you made $8,400. That's how much is in your bank account. You're taking a write off of $13,000, which means you don't have a profit on paper. You have a loss of $4,600. Now, remember, this isn't an actual loss. You have $8,400 in your bank account. You're just telling the IRS that I lost $4,600 because your paper loss is bigger than your actual income. So, what is your tax bill? Well, your tax bill is $0. Not just that, you're going to carry forward this loss into the next year, which is going to offset next year's income as well. So, you made $8,400 of profit, but you pay $0 in taxes. And now what you can do is even more exciting is now as the property goes up in value. Well, this is how you can build wealth, compound your wealth taxree. Not only have you been making this cash flow essentially taxfree, but now let's assume that this property which you bought for $150,000 has gone up in value. It's been number of years now. And now this property is worth $500,000. Ooh baby. So now what you can do is you can take this $500,000 property and sell it. And normally you would say, I have a $350,000 profit. I have a $350,000 gain. But you don't have to pay taxes on it because you can do something called the 1031 exchange, which says you can take all $500,000 and flip it into a bigger property that's paying you more cash flow and you can start this depreciation deduction all over again and pay $0 in taxes today. And now you can do it all over again as long as you own the property for longer than a year and a day. And you can do it again and again and again until you die and never have to pay a penny in taxes. This allows you to generate income, pay little to no money in taxes, grow your wealth, because as the property hopefully goes up in value, you're growing your wealth and then you can compound that wealth by flipping it into bigger properties taxfree. That's where real estate is very powerful. Not only so you can generate cash flow, but so you can grow your wealth tax-free. Because as you start to make more money and grow your wealth, one of the biggest expenses that you will often find is taxes. And if you can lower your tax expense, you can grow your wealth a whole lot faster. Videos like this are so much fun for me because I love investing for cash flow. A lot of people don't like it because cash flow investing is slower, but I like it because it's just so much more practical. I'm not hoping for an investment to go up in value. I'm just trying to stack cash flow and then I can live off of the cash flow. So, it's very simple and very practical for me because if my monthly expenses are $6,000 a month and my cash flow is $6,100 a month, I never have to go to work again because my cash flow is paying for my expenses and I am financially free. And that is so simple for me to understand, which is why I like this concept of cash flow. The difficult part is it takes time and it takes sacrifice. And most people don't want to have to wait to see those returns. But if you're willing to stick with it, I call it a decade of sacrifice, you will surprise yourself at how much success you can see if you stay consistent and you're making good investments because not only are you working to invest more money every single month and every single year, but your investments will hopefully be able to also grow, making you some extra cash flow. And if you reinvest that cash flow while your cash flow is growing, now it's just like a machine. You're investing more money. Your investments are growing in value. Your investments are paying you more money. And the money that your investments make, you reinvest that as well. So, you're just building this machine that just gets bigger and faster and bigger and faster. And that's where really that 10 year executive sacrifice, you can surprise yourself because over the last two to three years, you're going to really start to compound and grow how much cash flow that you can generate. Now, let's talk about number three, generating cash flow through interest. This is where now you become the bank. I want you to think about how your bank makes money. You take a $100, you deposit in the bank, they're going to give you a little bit of interest, but the reason why they can give you a little bit of interest is because the bank is going to take the $100 that you deposited and they're going to immediately lend it out to somebody else. They're going to give it to somebody for a mortgage or a car loan or a credit card. And that interest that they're generating from the mortgage, car loan, or credit card is then going to make the bank a big profit. and then they're going to pay you a little bit of interest. So, you are the one that's funding the bank's lending and then they are generating money from interest and then they're paying you peanuts. So, there's a few ways that you can actually generate this type of interest. Number one, the most obvious, the simplest, and the easiest to access is just to put your money into a high yield savings account or a CD certificate of deposit. So, there are banks out there that will pay you higher rates of interest on your savings just because it's called a high yield savings account. These are generally digital banks, so they don't have the same overhead as a physical bank, but they're going to pay you many multiples more than what a Chase Bank or Bank of America would pay you in savings just because they have that ability with the less overhead. So, you can generate some more interest. So, if you have money in a savings account, I highly recommend, and I don't really make recommendations and I can't make recommendations, but I really like high yield savings accounts. Then, you can also take a look at a CD. I'm not a huge fan of CDs generally, but a CD is a certificate of deposit. It's where you put your money into an account and then it gets locked up for a period of time, 6 months, 2 years, 5 years, and then the bank is going to pay you a higher rate of interest because your money gets locked up. Again, the simplest option, but it's a way for you to start generating some interest today on your savings. Then we have option number two, which is to invest your money into a bond. A bond is a loan and there are many different types of bonds that you can invest in. The most common types of bonds that there are are government bonds. So this is where you can lend money to the United States government. You can even lend money to your city. The idea being that the United States government is considered a riskfree investment because the government always pays their bills. Why? They can just raise taxes or they can work with the central bank, the Federal Reserve Bank to print money so they can always pay their money back. Yes, there can be inflation and the value of your interest can go down. But the idea is it is a safer investment and is a simple place to start, but less risk comes with less return as well. So you can go ahead and buy out these Treasury bonds directly from something like Treasury Direct, which is how you buy these bonds from the government. Or if you wanted a simpler option, you can go into the stock market and find funds. Again, I can't tell you what to invest in, like SG OV, which is going to give you exposure to short-term treasuries, and it's just going to pay you interest every single month. The value of the fund doesn't actually change, and it drops when it pays you interest. But the amount of money you invest is going to stay flat. You're just going to be generating interest every single month. The benefit of these bonds compared to something like a savings or CD is that because it is a treasury bond, you don't have to worry about state and local taxes. So for those of you that are higher income earners living in a higher tax state or city, this can allow you to earn money and paid less money in taxes. But there are other types of bonds as well. If you want to take on more risk, you can start to take a look at now corporate bonds where you're going to invest in debt for companies. So we talked about in dividends companies that are working out to pay huge dividends. Well, some of those companies or many of those companies are also borrowing huge sums of cash. Coca-Cola is borrowing huge sums of money. And so now what you can do is you can invest directly in those companies or you can invest in funds where now your money is going to be lent to those companies. And now instead of owning the company, you're going to get paid back with interest. The downside with bonds is there's a limit to how much you can make back. Because if you sign up a contract that's going to pay you 5% in interest, if the company doubles in value, you're only going to get your 5% in interest. But the upside of bonds is if that company were to go bankrupt as the stockholder, you're probably going to get nothing. as the debt holder, you're more likely to get something back because the bond holders, meaning the debt holders, get paid before the stockholders. So, bonds generally have less risk than stocks, but they also come with lower returns than stocks. And so, you have the ability to invest in the government bonds. You can also invest in corporate bonds, which give you interest. And option three is a land contract. If you own a house and you're going to sell it, well, option one is you can just sell it and get all the money today. Or option number two is you can become the bank as well. So you own this house and we're going to assume it's the same $150,000 and now you're going to sell it, but somebody comes in and says, "Hey, I want to buy your house. I'm willing to pay you the full $150,000. I just don't want to go to the bank or the bank's not going to approve me. Is there a way that I can buy your house without having all $150,000?" and you can say, "Yes, give me $30,000 down today and then I will finance you the other $120,000 at an 8% interest rate." You're going to give them a premium because they're coming through you, not the bank, but they might say, "Yes, I want to be a homeowner. I will pay you that 8% interest rate." And now you were generating interest on that house. And now you can do this in many different ways. I mean, you could do it for 30 years, but that's not very common. Generally, with these types of land contracts, it's like a 2year or 5year loan. And then if they don't pay it back, well, unfortunately, they lose the property and you get the property back, but you get to keep the interest that you got paid. So, this land contract is an option for those of you that own real estate and you're thinking about selling it and you don't know what you want to do with the money. Well, one option is you can sell the property on a land contract and generate interest while you get paid. This brings us to the most unique one so far, which is royalties. So, for those of you that have a creative mind, more entrepreneurial mind, you are going to love this one. The way you generate cash from royalties, you have to have something called intellectual property or IP. Now, traditionally, there was two main ways that you did royalties, but it has expanded a lot since then. The first one is you create a product. Many years ago, I used to be in the sock business. Yes, the socks you put on your feet. And the idea was I created this what I call water resistant socks with a technology we put into the yarn of the sock. We knit the socks. So, if you're an athlete playing football or soccer or whatever outside and it's raining, you don't want your feet to be soaking wet. So, these socks would then repel some of that water. My goal was to then sell this sock as proof of concept. That way I could then license this technology to companies like Nike and Under Armour and then they would pay me a royalty of maybe a penny per sock that they would sell. Unfortunately, I did not get the intellectual property. I filed for a patent. My patent got denied. And so when I got denied that patent, all the big companies said, "Well, we don't need you because you don't have any intellectual property. We could do it ourselves." So I did not continue with that business. But there are other businesses that you can do where if you have some sort of intellectual property or technology that's just yours, you can then license that technology and then get paid a royalty every time somebody uses it. This is called generating royalties from a product that is your intellectual property. Number two, and the second most common way to do it would be to write a book. You write a book. Now you work with a publisher or not, but the idea is now somebody's going to take this book and they're going to go out and sell it for you. And now you're going to get a royalty, a piece of every book that's sold. Now, you have to sell a lot of books to be able to live off of that book royalty. But it is a way for some authors to be able to create enough income that they don't have to work. Again, again, it is not easy to get to that point, but it is possible. It's a way for you to generate royalties. This brings us to now number three, which is the most creative way to do it nowadays, which is through content. And content is a very broad term. If you were on a TV show like Friends, the cast of Friends are still making millions of dollars every single year because they're getting the royalties off of people watching the TV show today. What do you want me to do? Just please go to Hollywood and try to become a TV star. Well, that's not the only type of content. You could start a YouTube channel. And now when you start a YouTube channel, you can generate royalties from a back catalog of content. In the month of August 2026, that was the first time that I took any time off of creating content in the last more than 10 years. And during the month of August, even though I wasn't publishing new videos, my YouTube channel was still generating ad revenue because people were still watching my previous back catalog of videos. So, as people watch my videos from 8 years ago, 5 years ago, 2 years ago, I was still generating royalties on that. Now, sure, it's not a lot of money per view. It's like maybe a penny per view. So, thank you for your penny for watching this video. But the idea is if you can create content that people are consuming, you can generate royalties even when you're not creating content. But to be fair, there's many different types of content. For example, when I'm creating content that's more relevant to the economy today, in two weeks that video is probably going to stop getting views. But if it's more evergreen, like it's how you can start investing your money, that video will probably still generate views in two months, maybe even two years from now. But in the digital age today, if you want your back content to be relevant, you have to still be creating content today. Another type of content is music. In the mid 1990s, Mariah Carey wrote a song which is all I want for Christmas is you. Well, even today people are playing that song around Christmas time and then she generates between $2 to $3 million every Christmas season because of how many people are playing that song. That's another form of royalties. The difference between royalty income and interest income and rental income and dividend income is royalty income doesn't depend on how much money you throw into it. It depends on the quality of the intellectual property. I mean, you can throw a million dollars into producing the most amazing piece of YouTube content in the world, but if nobody cares about it, it's not going to generate you any royalties. But if you put a million dollars into a dividend paying fund or a rental property or into a bond, you can very clearly predict how much cash flow you're going to get out of it. This is why royalty cash flow is less of how much money you put in, but more of how creative you are and what type of content you can create. It's not for everybody, but it does create an opportunity for another stream of cash flow that you create the content one time and then it can continue to pay you for days, weeks, months, or even years after that content has been created. And then for number five, I'm going to lump together a few different types of ideas in one. That's why I called it other. The idea being if you have an asset, there might be ways for you to monetize that asset in ways that aren't very normal. For example, this might not seem normal to a lot of people, but some people might do this. If you have a house and you have spare space in the basement or you have a spare bedroom, you can rent that out on Airbnb, maybe get another tenant as a way to create new cash flow in the asset you already own. If you have a car that you're not using during certain times of the week or month, you can rent it out on Turo. Now, that asset you already own can pay you cash flow. If you have extra baby equipment, a stroller, a car seat, baby bottle washer. Did you know that when people are traveling, they don't want to take their car seat with them and they will pay somebody to rent their car seat? There are websites out there like Baby Quip where you can go out and rent that same baby equipment from regular people. So, if you have extra baby equipment that you don't need or you don't mind renting out, you can rent it out to people who are traveling in your area. Or example number four, which is the hardest one, is you can own a business that you don't have to work in and get your share of the profits. Now, this one is the most difficult because if you wanted to go out and buy a business that does not require your work, it's going to cost you many millions of dollars. Now, I'm not saying you need millions of dollars to buy any business. I'm saying if you want to buy a business that's big enough, that doesn't require you to be physically involved in the company, you're not going to get it for under a million or even 2 million, probably not even $3 million. it's going to be many millions of dollars because that has to be large enough where it has a CEO to run the company and make enough money to be able to run without you having to come in and actually work in the company. So, you can go ahead and buy it or you can start a company and if you can scale your company to the point where you don't have to work in there anymore, you can hire somebody to run the company. Well, now you can leave and get your share of the profits. Because let's go through some numbers. Let's say a company is making a million a year and it has expenses of $500,000 a year. That's including not paying you. It's making a profit of $500,000 a year. Now, you want to go out and hire a CEO. This $500,000 of expenses is your rent, your cost of goods, it is your salaries for your employees, it is all the other stuff that you'd pay for. This is what's left in your bank account to pay you and to cover your savings and investments back into the company. Well, you can go out and hire a CEO. Let's just say you have to pay them $300,000 a year. That leaves $200,000 in the business bank account for the owner. Now, maybe you were going to save and reinvest $100,000 every single year, but that other $100,000 of profit can be distributed to the owners. And if you were the owner in the company, you're not the person running the company of the CEO getting paid $300,000 a year. You could be on a beach in Hawaii making $100,000 a year without having to run the company because this person is running the company and they're getting paid a salary. One of the things that I've learned in life is that often times the things you don't pay attention to end up mattering the most. And that's why I want to talk to you about life insurance with our sponsor, Policy Genius. Because if you don't have the assets to live off of yet, and something tragically happened to you, the last thing you want is now your spouse and your family trying to struggle to survive financially. And that's where term life insurance can come into play. Now, I'm talking about term life insurance here, not whole life insurance. The whole idea with term life insurance is it's life insurance for a period of time, 10 years, 20 years, 30 years. That way you can work to build your assets. It is a lot cheaper than whole life insurance because the whole idea is you're not here trying to get rich off your life insurance. It's just there as a bridge until you can build your assets. This is one of those things where the earlier you start, the cheaper it is. Because if you're a healthy 30-year-old guy, you could potentially get a half a million dollar term life insurance policy for less than a dollar a day. So, if you have any questions, you want to learn more about term life insurance or you want to see how much a term life insurance policy would actually cost you, I'll put a link to Policy Genius's form down in the description. It only takes a few minutes to complete and it'll give you an actual quote on how much term life insurance will actually cost you. And I have that link for you down in the description. So, what we talked about in this video is how you can generate cash flow from the stock market, how you can generate cash flow from rental properties, how you can generate cash flow by being the bank, how you can generate cash flow by royalties from your intellectual property, and then generate cash flow from other things that you own. Now, let's talk about the math of what it would take for you to replace $80,000 a year of expenses with cash flow from your assets. Now, if we start with the most basic math, how much money would you have to invest today to replace $80,000 a year of income? Well, if you could get a 5% cash flow on your money, that means you're going to need about $1.6 million invested today to be able to get the $80,000. If you can get an 8% return on your money cash flow, then you would have to invest $1 million. And at first, this can be very overwhelming. Oh my god, I don't have a million. I don't have $2 million to invest today. So, how am I going to get this $80,000 worth of cash flow? But the way that you actually do this, remember what I talked about with the decade of sacrifice? It's not by investing all this money today. It's by slowly investing your money week after week, month after month, year after year. And you do that to let your money compound and grow. That way, not only are you investing more money as you make more money, but you're investing in a good investment that's hopefully working to grow in value. that's also working to pay you more cash flow. Now, as that investment pays you with cash flow, you just keep reinvesting that cash flow. That way, now, not only are you investing more money to buy more cash flow, your cash flow is buying you more cash flow. So, you're building a machine that's working to grow faster and faster and faster. In the first few years, you're going to see very little progress, very little growth. But by year four and five, now you're starting to see this machine start to work and gain some momentum. By year six and seven, you're starting to see it get even faster. Now, years 8, 9, and 10, this is when you start to see much more of that bigger, closer to the explosive growth because now what you're doing is you've been putting in years of work, a decade of work to build this machine to get it going. And now this machine is moving, is generating strong cash flow. And that strong cash flow is now buying even more cash flow. So, every time you get the dividend check, every time you get that interest payment, every time you get that cash flow coming out, it buys you a lot more cash flow. So, it starts to become more and more powerful year after year after year. and every additional year you put into it now it starts to be even more powerful. So let's break this down into smaller pieces. Let's assume now that you can invest $1,000 a month and you do this every single month and we're going to assume for the purposes of this even when you get a raise you're not going to invest more money. I do want you to do that but right now you're just investing $1,000 a month. And now what you're doing is you're investing it into a place where you're getting 5% cash flow. Achievable. It's high but nothing crazy. It's definitely achievable and your cash flow is growing by 10% a year. We've seen this in the stock market with many funds. It is possible. Kind of high, but it is 100% possible. Well, now what you're going to see happen if you reinvest your profits, you can start to get to this $80,000 a year much faster than 30, 40, or 50 years away. Now, what that means is in 20 years, you will be able to generate that $80,000 a year of cash flow 100% passively from your investments, assuming that your money grows like this. But what if you wanted to see this wealth sooner? What can you do? Well, ultimately comes down to TMR, time, money, and returns. These are the three things that are going to determine how wealthy you become. Time is how long you let your money compound and grow. Here, it's 20 years. If you want it faster, you have to focus in on the M and the R. M is how much money you invest. So instead of investing $1,000 a month, maybe you should invest $1,50 a month or $1,500 a month or $2,000 a month because that can shrink how much time it takes for you to actually achieve that wealth. Number three is R, the rate of return. How fast can you grow your money? Because right now we're talking about 5% dividends growing by 10% a year. Can you find more aggressive cash flow? And yes, it is possible, but it's going to require more work. Like I was talking about earlier in the rental property section. How am I able to find higher return deals? I'm looking for value add deals. Deals that are beat up, that don't look very good, that require some work from my end because I'm willing to take on some more work. I'm willing to put in more of my effort. I can get better rates of return. Can you see that in the stock market? Absolutely. Look for now opportunities that other people are ignoring. Again, this takes more research, takes more risk. Either that means now you buy when the stock market is at a low, you see a market crash, you see a downturn, now you can come in and buy great dividend companies 30% off, which means you can grow your wealth that much faster because when you buy the company at a discounted price, you're still getting the dividend. You're just able to buy 30% more with that same dollar. Or the alternative is what I call a market shift. You're looking for opportunities in the market because you're seeing that the economy is shifting. If you see that people are going to drink a lot more Coca-Cola, well, now you can go deeper into that industry and buy stocks like that. The idea being if you can identify which companies might be making more profit in the future, that's an industry you can consider investing more money into. So, what we talked about in this video is that there are two ways to make money. One is you work to make money from your paycheck. The other is you work to buy the asset that pays you through your cash flow. Now, the way that wealthy people build wealth is not by working for a paycheck. It's by using the paycheck to buy the assets that pay them with the cash flow. I love investing for cash flow, which is why I enjoy making videos like this. The idea being you're going to own things that are going to pay you without having to work in that thing. When you work a job, you have to work to get paid. When you own the asset, you work to buy the asset and then it pays you forever. We talked about five different assets. We talked about dividend paying assets in the stock market. We talked about different types of funds you can invest in. We talked about how you can invest for rental income through real estate. We talked about how you can become the bank and generate interest income. We talked about how you can generate interest in royalties off your intellectual property. Then we talked about the other option which is you can rent out rooms in your house. You could rent out your car on tour. You can rent out your baby equipment or if you build a business that's generating enough profit or buy a business with enough profit, you can hire somebody to run the company and then you can go and travel the world while getting your share of profit or distributions. And then we went over the math to making $80,000 a year of cash flow. If you got value out of this video, the best thank you was a referral. So, if you could please share this video with a friend, family member, colleague, or fellow investor. That way, we can continue to spread this type of financial education. Thank you. America is now officially running out of people to keep buying its debt. So, the Treasury Secretary just announced that on September 9th, we're going to get creative. We, the United States of America, are going to buy up our own debt. Take a listen. >> We routinely do buybacks and we're going to increase the size of the buyback. And yes sir.