Passive income

People with a high financial IQ have an investment strategy that aims to create passive income.

Passive income is generally derived from real estate, royalties, and business distributions. If you receive rent from a property, that is passive income.

Robert Kiyosaki gets royalties from his books, making them cash-flowing assets that provide passive income.

If you own a business that distributes profit to you, that is also passive income. In short, it is income that comes to you whether you are working or not. It is the lowest-taxed income, with many tax benefits, and is the easiest income to build wealth with thanks to its combination of low taxes and potentially infinite returns.

*Rich dad said, “If you want to be rich, work for passive income.”