The knowledge shared on this page will help give you power over money. At the Financial Freedom Foundation, we define financial independence as having more passive income than your living expenses. It’s not about how much money you have, its about how much money you have coming in. You can own the mineral rights to millions of dollars worth of oil and still be poor if that isn’t converted into cash flow.

The 2 Levers

When you drive, you have 2 main levers, being the steering wheel and the floor pedals. When it comes to creating passive income, you have 2 main levers: 1) your mass of capital and 2) the rate of return you can generate on that mass of capital. If you increase either one of those two levers, the amount of your passive income also grows.

For example, if you have $140,000 of investment capital, and you earn a 6% monthly return, then you will be creating $8,400 in passive income per month, which is $100,000 of passive income per year.

Adding in the element of compounding… if you reinvest your monthly profits and wait 12 months to withdraw your accumulated compounded profits, then it would only require $100,000 of capital to create that same $100,000 of passive income.

The mass of capital can come from 1) savings, 2) investment debt (other people’s money or OPM), or 3) reinvesting your profits to induce compounding of your returns (remember what we said on the “Our Philosophy” page about capital reinvestment being a key to wealth creation). You’ll learn more about investment debt in our Free Report.

Generating Consistent High Returns

To control and increase your rate of return, the most efficient way we have found is to use managed accounts with high performing professional traders, who average over a 6% return per month. They do active, non-directional trading. “Active” means that they do not subscribe to a buy and hold mentality, but rather are in and out of the market with their trades. Some many have an open trade for just a few minutes (scalping) or just a few hours or days (day trading) or just a few weeks or months (swing trading). “Non-directional” means that they do not care about the direction of the market, as they can trade the market up or they can trade the market down (the performance of one of the traders in touched on in the video to your lower right).

Another key element to maintaining a high rate of return is risk management. While the best traders always apply risk management strategies in each and every trade, you as the investor should apply risk management strategies in constructing your investment portfolio. When talking of risk, it is important to know that you have both positive risk and negative risk. The risk we want to control for most carefully is negative risk, more especially the risk of loss of original investment principal. The first step is to minimize this risk. Then you take steps to completely eliminate this risk. Here’s how…

1. Multiple Traders/Strategies: You are at your riskiest position when you only have one trading strategy working for you. Never have only 1 professional trader working for you! Right from the beginning you should have your mass of capital divided amongst several different traders with several different strategies that are not correlated with each other. We have found some traders who have account minimums as low as $1,000. This means it is possible to have at least 4 different traders working for you while having as low as $5,000 at risk. As a rule of thumb, always start with the minimum investment! Add more capital into a particular managed account only after completely taking negative risk off the table, as referred to in Step 3 below. Remember, the goal is to have as many high performing professional traders a possible, be it 10, 15, or 20 strategies working for you in your portfolio, depending on how much capital you have (incidentally, when someone tries to learn how to trade on their own, they typically only are learning one single trading strategy, so becoming an arm-chair trader is not very wise, from a risk management perspective, and it is not the highest and best use of your time, talents, and resources if you can find other traders who can generate higher returns more consistently than you can).

2. Multiple Asset Classes: Even though conventional wisdom is to invest in stocks, bonds, and real estate, there are actually much better options. We have found that the best performing professional traders who can generate average monthly returns of 6% or better are active non-directional traders in Forex, commodity futures, stock options, and ETFs (exchange traded funds). These are non-correlated asset classes. As you build out your portfolio of professional traders, you will have traders and strategies spread out amongst these different asset classes. The Forex strategies tend to operate in shorter time frames, so you can see results most quickly, with the least amount of capital at risk. You will probably want to start with those traders and migrate toward the other asset classes once you can comfortably put a minimum of $30k or $50k into a single account and be comfortable having it traded for a couple of months before seeing the full results, because those asset classes tend to have trading strategies where the trades are open for much longer periods of time.

3. Taking Risk Off The Table: In investing, risk is measured as variance. An investment that performs between 1% per month and 10% per month can be considered more risky than an investment that performs between negative .02% per month and positive .02% per month, because the first investment has a wider range of trading, or a higher variation in the returns. However, risk can be broken down into positive risk and negative risk. The main risk to control for is negative risk, or risk of loss of original investment principal. A way to do that is to withdraw your monthly profits from each managed account until you have withdrawn 100% of your original investment principal. Once you have done this, that managed account is now a high performing asset that is growing practically risk free. As you take your monthly profits off the table, repay your original source of investment capital, be it your savings or investment debt. Once a particular managed account has reached this break-even point, only then should you add more capital to this managed account, as this professional trader has proved himself to be one of the better performing traders. Treat this additional capital the same way you did your first batch of capital with this trader, taking the profits off the table until this additional capital is also free from negative risk.

Scaling Up Your Mass Of Capital

When scaling up your mass of capital, some people think that compounding is the most powerful mechanism. That is not necessarily the case, because if you use investment debt, then you can scale up OPM even faster. Here’s how…

When using investment debt, some people think that you should only make the minimum payment to the lenders, so that you can stretch out the use of their capital as long as possible and let your excess profits compound. Wrong answer! You forgot to take risk off the table!

As you develop a new relationship with a lender, they will only lend you the minimum amount they’re comfortable with. If you generate a 6% per month return on the capital, and use all of those profits to make much larger monthly payments than just the minimum principal plus interest, then they are going to LOVE you as a borrower, especially when the loan is in the form of a line of credit. Lines of credit are meant to be drawn down on and then repaid within a short period of time. That is how they account for it at the bank level. If you treat the line of credit like a term loan, by only making the minimum monthly payments, then they will not like you as a borrower. If, instead, you make larger monthly payments, then within 6 months or so, they will probably double the amount they will lend to you. This means that your mass of capital just doubled in size within a much shorter period of time than it could through compounding alone! Plus, you’ve been taking risk off the table the entire time, which strengthens your personal position even further!

Now, here’s the million dollar question, “How many corporations can an individual own?” Answer: How ever many you want!! If you are using Non-Personally Guaranteed Business Funding, then you can get multiple batches of funding through multiple corporations, which will increase your speed of increasing your mass of capital even faster. We cover this in detail during the Phone Interview. (If you are an analytical person and would like to see a sample analysis of the cash flows using NoPG funding, including how to calculate the cost of capital plus a sensitivity analysis on the various interest rates and various average monthly returns, you can download the Excel file by clicking here. You can easily modify the assumptions in the blue area, and if you are versed in Excel, feel free to customize the model.)

Once your mass of capital has reached the 7 figures, the door opens to a little known method of investing where the historical returns are north of 20% per month. A little math quickly reveals that this translates into passive income north of $200,000 per month. That is why it is important to lift your vision and lay the groundwork while you are a “hundred-thousandaire,” so that you can have already built out the infrastructure needed to absorb that level of capital and put it to its highest and best use in your humanitarian projects, your efforts to help others.

Implementation

Now that you know the strategy in the investment model, you can learn the tactical implementation when you join our Mastermind Group. 1st: Download and read our Free Reports, 2nd: Read our “Details” page (the link to access this page is in the Free Report), 3rd: Complete your Membership Application Form (the link to access this form is on the “Details” page), and 4th: Complete the Phone Interview. Once you are an official member of our Mastermind Group, you will:

1. Discover the secret to creating $100K passive income, within 12 months.

2. Master the exponential effect of COMPOUNDING RETURNS working in your favor, potentially growing your $100K passive income to over $1M of passive income per year, within 5 – 10 years.

3. Uncover over 15 day-traders/swing-traders who can generate you average returns of 6% per month or more.

4. Find traders with starting account minimums as low as $1,000 to get started.

5. Reap the full profit potential of Forex, Commodities, ETFs and Stock Options, without having to personally do any trading yourself!

6. Uncover hidden, low cost, low risk sources of investment capital, if you don’t already have a nest egg to work with.

7. Learn how to scale up your the mass of capital working for you and gain access to the professionals who do the heavy lifting for you.

“The philosophy of the rich versus the poor is this: The rich invest their money and spend what’s left; the poor spend their money and invest what’s left.” -Jim Rohn















Legal Disclaimer: The Financial Freedom Foundation is not a United States Securities Dealer, Broker or US Investment Adviser. Forex, futures, stock, and options trading are not appropriate for everyone. Trading and investing in the stock, Forex, futures, and options markets have large potential rewards. However, there is also a substantial risk of loss associated with trading these markets. Losses can and will occur. You are solely responsible for any losses as a result of trading. Never put your money on the line without an understanding of what you are doing, and why you are doing it, based on your own personal knowledge and experience. Results, depicted above are unique to the user. Your personal results will vary. You could make more, less, or even lose money. No system or methodology has ever been developed that can guarantee profits. No representation or implication is being made that using the information will generate profits or ensure freedom from losses. Traders should consult their own financial advisers regarding any securities transaction, and be responsible for their own investment decisions.