Is the phrase ‘passive income’ a myth? Are there really insider secrets to creating passive income, year after year, for the rest of your life? When is it ever enough? When can you stop? When can you stop the hustle and grind? And how much money is enough?
It would be a dream if you could live your life doing exactly what you wanted, all the time, and you could comfortably, happily, profitably survive doing nothing else but that. Unfortunately, reality isn’t like that, and most entrepreneurs already know this.
But if most understand this basic, uncontroversial fact, why do I still keep hearing a damaging piece of advice being spread among entrepreneurs like a bag of candy?
“Do the things you love, and money will come to you.”
If only this were true – but it isn’t. Following this piece of advice is never going to reveal how to make money, and believing that it is can be damaging to both your career and your self-development.
It takes work to set up systems, and if done right can make passive income VERY real. Don’t let anyone tell you otherwise.
Manage your money well and happiness will often follow
Managing your money is a key skill to be in your self-development priorities alongside eating well, living healthily, and being a good person. It is a skill that you need to practise and nurture, to improve your understanding of it and to pass on to your children. When the economic climate changes you must be able to thrive rather than flounder in such conditions, so you must learn a variety of ways in which to make your money. The world alters frequently and often financial change comes with it, but if you manage your money successfully, attain lucrative assets and develop passive income, then you will always be in a good position whenever life takes a turn. You will always be ready to look after yourself, your loved ones, and your business, which are all important routes to self-improvement and success.
Lots of people say, there’s no such thing as passive income. It cannot be done. Usually, when people say, it cannot be done, what they really mean, is, they don’t know how. Because I’ve been earning passive income from my books, my podcasts, my properties, et cetera for many years,
Create an asset that creates income. You may use capital or you may use sweat equity, hard capital, soft capital. But you create assets first that create the income. It’s nothing wrong you wish to exchange time for money. But that’s not an asset. Preserve your capital at all costs. You put capital into an asset, preserve it, ringfence it. Don’t erode it. A lot of people are eroding capital, spending money. It’s the asset that creates the recurring income. So, preserve the capital.
Top tips for creating passive income
- You have to set up the income stream first, from an asset. (that takes education, knowledge, work and time)
- The ‘set up’ time diminishes each time you set up a new passive stream, because you have experience, cross-stream investment and people to leverage
- Passive income becomes more passive the longer you have it [without dramatic market changes] through compounding and your experience managing it
- Passive income requires leveraged management to make it passive [systems, software, outsourcers, managers]
- Passive income only becomes non passive when your management and systems are not in place, or fail
- Passive income should have [random] checking systems to monitor and changes [such as tenants not paying rent, books no longer selling] otherwise it will stop
You have to ‘set’ before you can ‘forget.’
“You have to work hard enough not to have to work hard” – Richard Templar