By Hugo Espinal
As a result of the previous article about buying or renting where I mention the Grant Cardone quote that I use as the title of this installment, several people found this concept interesting, which in my opinion I leave to investors who wish to create their own source of passive income.
For example, a friend has already proclaimed herself a Cardone herself, since she has her apartment in Europe, which she tells me she wants to rent out under the short-term rental model during the winter months, while she moves to the always pleasant tropical climate of the Caribbean, in the mountains of Cabrera where she has already acquired a plot of land and plans to build her beautiful house; another friend, who also lives in rented accommodation with his lovely family, acquired a unit off-plan, which consists of 2 bedrooms, with a view to "saving" the money, while he gains the future capital gain of buying at that stage and at the same time protects himself from the terrible and silent disease that clings to money: inflation.
In the Dominican Republic, according to Central Bank figures, inflation was 8.5% in 2021, while in the USA it was the highest in the last 40 years, at 7%. Personally, I don't criticize those who choose to save their money in the bank, but I do recommend, or rather prefer, investing money elsewhere with a better return than savings accounts offer. The friend I mentioned in the previous paragraph doesn't yet know if he'll live in the apartment he's purchased, or if he'll resell it before taking possession to recoup his investment plus the capital gain. What he does know is that it will serve as a down payment on the three-bedroom house he wants to buy in the future. In addition, it will protect his money from losing purchasing power.
On the other hand, as I mentioned earlier, buying a home to live in isn't a bad thing. Just ask Warren Buffett, who has lived in the same house in downtown Omaha since 1958, which he bought for US$31,500. He lives comfortably, peacefully, and securely, always trying to live within his means and avoid financial excesses.
The concept of renting out your own home and renting out properties you buy to others is always with the clear objective of generating passive income from the rental payments you receive. This income covers not most, but all of your fixed expenses, thus achieving the coveted financial independence that many young people today seek through the Financial Independence, Retire Early (FIRE)
Real estate is the sector I recommend for generating a fixed passive income, as it offers a degree of security over the years. It's also my passion and area of expertise, so I can advise you. However, there are other investment options that can generate passive income, such as:
*Stock exchanges
*Real estate funds
*Agricultural
*Being a shareholder in a company and even buying a vehicle and renting it to someone who offers taxi services.
The key is to position yourself on the other side of the cash register, receiving the money yourself, selling a service or product while actively continuing your primary job. As they say: those who complain are stuck with their problems, those who seek solutions find them, and entrepreneurs monetize them.
The author is an Industrial Engineer from the Pontifical Catholic University Madre y Maestra (PUCMM), holds an MBA in Financial Management from the Antonio de Nebrija University (Madrid, Spain), and a Green Belt Training Certification from Quality GB. He has over 13 years of experience in the Dominican Republic real estate market. He specializes in sales and project management for both residential and investment properties. Since 2009, he has been a member of the Plusval staff.
