First, what is Passive Income?

Passive Income is money that you are paid over and over again for work that you only do once. (This excludes using a gun or
finding cash on the street) Some examples of this would be royalties for writing a book or a song, commissions that you
receive for sales that others make and interest from bank savings or dividends on stocks/options that you own.

Second, what Expenses are we talking about? This one's a little easier to understand. Expenses are the total amount it takes to run your household and your life. This includes, rent, mortgage payments, car insurance, food, credit card and loan payments,
etc………

Let's look at Marty's family a little closer…………. Does Marty have any Passive Income? Yes he does. Marty's salary is not
considered Passive Income. That's because he has to work 40 hours a week just to get the basic amount. If Marty doesn't go
to work then he doesn't get paid. His overtime also doesn't count as Passive Income.

The interest from their Retirement Fund does though. It's paid to him month after month as long as it's left in that account.
So, $32,000 at 5% is $1600 a year. Divided by 12 months equals $133 a month in interest. Ok…..what else?

After the mortgage and expenses are paid with the rent money they receive on their rental property they are left with $300
every month. This is Passive Income. Just as long as the tenant stays and pays his monthly rent.

How bout that $400 from the home-based business and the Tax savings. Is this Passive Income? Well, Marty's wife made sure
that she chose a company where she could sign new business accounts and get paid commissions on those accounts over and over again. They've made a 5 year commitment to build this business part-time. So yes, both the $400 and the $300 in Tax
Savings would apply as Passive Income. Let's add up Marty's total Passive Income.

Interest $166.00 Rental Income $300.00 Home Based Business$400.00 Tax Savings $300.00 Total $1166.00

Not including Marty's salary from work, his family's Passive Income is $1166.00. Not bad. Every month this amount flows into
the family's bank account, regardless of anything else they do.

We said that Marty's monthly expenses total $2000.00 a month. And we also said………… You have Wealth when: *Your Passive Income is the same or greater than your Expenses.*

$2000 Expenses subtract $1166 Passive Income = $834 monthly balance needed to have Wealth.

Marty's Expenses are still more than their Passive Income so they're not wealthy just yet. But they're well over half-way
there. With this kind of knowledge a family can know exactly where to focus their financial attention.

Maybe when Marty writes that ebook he could get some sales and royalties from it. Also the new Real Estate and more work on
their Home-based business would certainly help them to attain more Passive Income. Once Marty's Passive Income is more than the family's Expenses then Marty could start to have much more freedom. He may even choose to quit his job and continue developing his Passive Income streams.

Take a look at your own finances. What are your monthly expenses? Do you have more Passive Income than your Expenses? If you do Congratulations. You're Wealthy!!! If you don't. It's time to get started and start adding Passive Income from other
areas as soon as possible.

When you truly understand this principle, you'll be well on your way to becoming wealthy

About the author:
Al Walker, makes it easy to launch a successful online business and rapidly build your wealth to a six-figure income. Learn the 5 essential keys to online success. To receive your free 4-part mini-course visit: http://www.businessprogramreviews.com


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