The Definition of an “Equity Goose”

Simply put,  the term "equity goose" comes from the parable of the "goose and the golden egg" used in financial circles as a metaphor for an asset or multiple assets that produce passive income. Ideally, an equity goose would be an investment property- since these provide monthly "cash flow" in the form of tenant rent checks (the "golden eggs").

However, there is additional criteria that should be understood when defining a true "equity goose." First of all a true equity goose is never drawn down. You should constantly be feeding your goose to foster its growth. For this reason "rainy day funds" and "just in case accounts" do not fit into this category- you create them with intent to withdraw. Any money you have in a checking account also doesn't fit the criteria because you usually use it to pay off bills. The most pure example of an equity goose is a money market account. It's a great place to save 10% of your income when "paying yourself first" because it's harder to withdrawal from. This account would preferably be at a different bank than your other accounts, making it as inaccessible as possible.

The second characteristic of an equity goose is that it cash flows. Under this requirement dividends from stock investments, passive income from rent property, and the interest on money market accounts all apply. Although it technically fits this criteria, stock market investments are not true equity geese. They tend to lose value due to the volatility of the stock market. Money market accounts are considered equity geese, because they cash flow about 2% and are relatively safe investments, as they are secured by the FDIC. However, real estate investing provides you the greatest amount of return with the least risk. Rental properties lay "golden eggs" every month in the form of cash flow from your tenants' rent.

The third and final characteristic of an equity goose is that it doesn't loose value. This is the primary reason why stocks don't fit the equity goose criteria- they depreciate. Real estate investing in Dallas, San Antonio, Houston or most Texan cities usually guarantee that you don't lose money on your investments. That's because these cities provide many opportunities for wholesaling- or buying property at extreme discounts resulting in instant unrealized equity when you purchase a home.

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