My No Leverage Principle- Why? Part 3

My No Leverage Principle- Why? Part 2

Understanding Debt, Risk and Leverage

I don't like the ideas of getting into Negative Passive Income. Read on. The Story ...

Seems unrealistic. Make money while you sleep. While you spend time with family. While you're in your car, on your bike, or eating. Passive income is income that you "set and forget". Wow, passive income is so shiok!!!

Rental income from properties can be the biggest form of passive income you can generate. It can also be the most detrimental to your work free lifestyle and can lead you down the road for another 40 hour a week drudgery if you ever fail in your property investment.

What is Negative Passive Income?

Recalling from Part 1 ....

For 30 years mortgage loan, you probably spent the 1st ten years paying more interests to the bank and little on equity.

Negative Passive Income happens when your monthly mortgage payment exceeds your rental income or no rental income.

If the current recession prolongs for another few years and the property market continue to fall further. Rental is going to drop drastically, and in the worst case, the property may remain vacant for sometime.

A better way for passive income generation through property is not to start with any passive income at all, but removing any negative passive income.

Getting out of debt is the first and hardest part of generating passive income and long term wealth.

That's all, folks. End of My Story. If you like my story, buy me kopi O.