Purchasing Passive Income

If you have ever wondered how to purchase passive income, here is a story told by Matthew Duckworth:

“I have a friend who sold his first company in Texas when he was in his early 20’s for about $15 million. Since then, all he does is invest in passive cash flow situations… oil & gas, real estate and a few start-ups. No stocks. No bonds. Just private investments that create cashflow.

He has a small team of people he works with that scour the earth to find private investment deals that will generate a return over 20%/yr and he’s actually done better than his target. My partner and I have very much the same process.

With small investment deals, its actually kinda easy to get this kind of return. The problem is finding enough deal flow and having a real understanding (aka Charlie Munger’s “Circle of Competence”) to eliminate most of the risk. That’s the hard part. Read more of this post