5 Types of Income to Create Infinite Income

 

- AZ TRT S06 EP09 (271) 5-25-2025           

 

What We Learned This Week

• Multiple Streams of Income strategy
• 5 Types of Income – Career, Investment, Retirement Account, Pension, Tax Free
• Diversification of income provides you security and freedom
• Build Infinite Income thru initial investment, and profits pay off loans, then go on forever
• George Lucas created the Star Wars IP one time, and gets infinite returns from the movies & merchandise
• Real Estate, Business, and Insurance products are good assets for infinite income

 

 

Notes:

 

Segment 1: The 5 Types of Income – Why One Stream Isn't Enough

Opening: The Economic Shift

·         The economic landscape has changed dramatically over the last 50 years.

·         While business and technology have advanced, personal finance education and systems haven’t kept pace.

·         Inflation has significantly eroded purchasing power.

·         It’s no longer the 1950s where one income could support a family of four. Now, two incomes are often required—and even then, many people have a third gig.

The New Normal: Side Hustles & Financial Reality

·         According to recent stats, 70% of people need an additional income stream, often from a side business or freelance work.

·         30% of Americans hold a second job.

·         Among millennials, that number rises to 50%.

 

 

The Lesson from Robert Allen & Rich Dad, Poor Dad

·         Robert Allen’s Multiple Streams of Income advocated for income diversification to gain safety and freedom.

·         Robert Kiyosaki’s Rich Dad, Poor Dad emphasized acquiring income-producing assets—his favorite being real estate.

The 5 Types of Income

1.    Career or Business Income Your primary, day-to-day W-2 income—pays the bills and covers monthly expenses.

2.    Investment Income Comes from appreciating or income-producing assets like real estate, stocks, or Bitcoin.

3.    Retirement Accounts Tax-deferred income sources like IRAs or 401(k)s—subject to rules and penalties but critical for long-term planning.

4.    Guaranteed Income Comes from pensions, annuities, or Social Security. Designed for lifetime income and stability.

5.    Tax-Free Income Generated through Roth IRAs or cash value from life insurance. You pay tax on the seed, not the harvest.

Call to Action:

·         Make a list of which of the five types of income you currently have.

·         Strategize how to build the remaining ones for a balanced, resilient financial future.

Analogy: Just like a business has multiple products or a sports team has multiple ways to score, individuals should have diverse income sources to win financially.

Segment 2: Infinite Income – Building Streams That Never Run Dry

What Is Infinite Income?

·         Infinite income is ongoing, residual income that continues long after the original work or investment.

·         It’s the financial holy grail: put in work or money once, get paid over and over.

Key Assets That Can Generate Infinite Income:

·         Tangible Assets: Real estate, businesses, stocks

·         Intangible Assets: Skills, knowledge, intellectual property (IP), network

Examples of Infinite Income in Action 1. Real Estate

·         Buy a $250K property with 10% down ($25K).

·         Renters pay the mortgage; property appreciates.

·         Refinance later, pull out your original investment tax-free.

·         Continue collecting rental income even after loan is paid off.

·         Use refinance funds to buy more properties → Repeat → Scale.

2. Business Ownership

·         Start or buy a business using a loan.

·         Profits pay off the loan, then continue to generate revenue.

·         Later, use the business as collateral to expand or acquire another.

3. Life Insurance (IUL Strategy)

·         Fund a policy over time; cash value grows tax-deferred.

·         Take loans against the policy tax-free—used as supplemental retirement income.

·         Policy can also be a legacy tool, passing on wealth tax-free.

4. Intellectual Property (IP)

·         George Lucas with Star Wars—created once, profits for decades from merchandise and licensing.

·         Jeff Bezos still profits from Amazon stock, 30 years later.

·         Microsoft, McDonald’s, Coca-Cola—IP and systems built once, revenue continues for decades.

·         DC Comics still profiting off Superman IP created in the 1930s.

Key Principles for Building Infinite Income

·         Choose the Right Assets: Real estate, businesses, IULs—not just assets that appreciate, but ones that cash flow.

·         Leverage and Scale: Use debt wisely to scale income-producing assets. Wealthy individuals and private equity firms use this strategy constantly.

o    Example: PE firms acquire HVAC companies, funeral homes, rental properties—assets that provide consistent 10%+ returns.

·         Use Tax Strategy to Your Advantage:

o    Tax-free income is more efficient.

o    Lowering your tax burden increases your net income immediately.

o    Wealthy individuals use loans, Roths, and life insurance to optimize tax efficiency.

Mindset Shift:

·         Don’t chase just “buy low/sell high” assets. Instead, acquire harvestable assets—ones that generate regular income and can appreciate.

·         Build cash flow now, use it to reinvest in more assets—repeat the cycle.

Closing Thought:

·         Control three things: Assets, Income, Taxes.

·         Master those, and you create not just wealth—but infinite income.

 

 

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