Another wealth building technique, akin to real-estate rentals, that is not frequently employed by entrepreneurs is owning and then leasing out "taxi medallions".

A taxi medallion is a small tin plate that gives the driver of a taxi explicit permission to ply their cab in a particular city. Thus for example, if you wish to drive a cab in New York City or Chicago, you need to be in possession of this medallion before you can legally drive your cab and offer transportation to your customers.

You can come into possession of this medallion by either owning one yourself or by renting it from someone who owns it. Medallion ownership however, can be expensive - ranging around $320,000 in New York City, and around $60,000 in Chicago. Most long-time cab drivers love to own their own medallion, while those just starting out have no option but to rent it.

Renting a medallion, or leasing it as it is often called, requires a fixed payment to be made by the driver each day to the medallion owner. This payment may range from $300/day to $50/day depending on your city and the cost of the medallion itself. Thus obviously, if you are a long time cab driver, you would prefer to pocket that money rather than having to pay someone for the medallion. And yet, for new cab drivers, this is an excellent way of breaking into the market.

The cab market is a strictly controlled market where the city sets the fare, and limits the number of cabs that can ply in the city. This controlled market actually causes the value of the medallion to generally trend higher (at the minimum, tracking the inflation rate). Moreover, medallions are generally sold and purchased through auctions, which tends to add to the overall price of the medallion.

If you wish to get into the medallion market, follow these steps:

1. Determine which city you wish to bid for these medallions in.
2. Arrange for financing to purchase the medallions. These are generally easily available at your bank for 10 year terms.
3. Arrange with a broker to place your bid at the auction. Most auctions are silent auctions.
4. Once you win your bid, it is better to work with a cab fleet broker/manager who will easily lease out your medallion and collect payments on your behalf. These managers also handle any particular issues the cab driver may have with regard to the terms of payments and so forth. Of course it is beneficial to attempt to handle it yourself first, and then choose a good manager to handle those tasks for you.

Those who enter this market, often tend to build their fleet by first owning one, and then adding one annually until they are operating 10-20 cabs in the city for a nice income stream and developing their net worth.