Ryan had a very motivating chat with Sam Prentice, an investment expert and the co-founder of Wealthpoint, about generating passive income through investments. Here’s some of what Sam had to say about what to do if you get a big windfall (from selling a business for example):
Use 1031 exchanges wisely
Some of Sam’s clients used a 1031 exchange to take money from one depreciated property, reinvest it in another property, and defer all capital gain taxes. You can actually 1031 between asset classes as long as they are considered like-kind. Some people exited real estate for a great profit and reinvested the money in oil and gas.
Set up a capital warehouse and then go for the cash flow
First set up a capital warehouse, which means that you will have a limit to how much you can put into it each year. This is basically a liquid place to store capital which earns a return. For the rest of the money, go for anything cash flow.
Keep it simple
Look for assets that have a value and buy countercyclical assets when you don’t know what you’re doing so that you can trade them later. Always keep it simple. Look for sweet spots, aka places where you have a strategic advantage either in knowledge, or in the people that you know, or the sector you are familiar with.
It was great listening to Sam!
- Take advantage of 1031 exchanges
- Set up a capital warehouse and then go for the cash flow
- Keep it simple and look for sweet spots
Connect with Ryan
Find more amazing podcast discussions on FreedomFastLane.com.
Connect with Sam
Find out more about Sam’s company, Wealthpoint, at https://gowealthpoint.com/