UNIT 8: MONEY AND FINANCE
My name‿ is Dana. I rent‿ out‿ a small flat,│ and‿ I want towanna correct‿ a misconception:│ the income‿ is passive‿ in name‿ only. What‿ is passive‿ is the payment;│ the work‿ is simply irregular.
In three years‿ I have had three tenants,│ one broken washing machine,│ and‿ a month with no rent. Property is capital-intensive‿ and‿ illiquid,│ an(d) the yield‿ is lower than the brochures suggest│ once depreciation‿ and‿ overhead‿ are‿ included. What‿ it does‿ offer‿ is leverage‿ an(d) stability,│ which‿ is why it suits my temperament. My frien(d) Marco is‿ attempting the opposite model,│ which‿ is scalable‿ an(d) cheap:│ he restores furniture,│ sells‿ it,│ and‿ is writingwri-ding‿ a book for royalties. His‿ overhead‿ is‿ almos(t) zero an(d) his‿ opportunity cost‿ is‿ enormous,│ because he works twentytwen-dy hours‿ a week‿ on‿ income that‿ arrives nex(t) year.
The hones(t) version‿ of this conversation‿ is that passive‿ income‿ is usually income that somebody else‿ earns for you. A tenan(t) pays my mortgage,│ and‿ in‿ exchange‿ I accep(t) liability for the boiler‿ an(d) the responsibility for‿ a home that belongs to somebody else's life. Diversifying‿ into a secon(d) property would double my exposure. If‿ I had tohadda choose one,│ I would take Marco's model,│ provided‿ I could survive the wait,│ an(d) that proviso is not‿ a detail. It‿ is the whole thing.