There are so many out there teaching about “passive income.” But are they just trying to bait you into something that’s NOT passive at all? What do WE mean when we talk about passive income?
The truth is it’s good to be skeptical when someone claims it will be passive. You might get into something you think is passive and end up having to build a whole new business behind it before reaping the rewards. In this episode, Chris Miles will give you his definition of passive income and which strategies are truly passive where your money works harder than you do.
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Is Passive Income a Myth?
Welcome to the show that’s for you, those of you that work so hard for your money and you want your money to start working harder for you. You want that freedom and cashflow today, not 30 or 40 years from now, so you can live that life that you love doing what you love. Most importantly, it’s not about getting rich. It’s about living a rich life because as you are blessed financially, you have a greater capacity to bless the lives of others.
Thank you for allowing me to do so. I appreciate you giving me more topics, conversations, and questions, whether it’s on our social media channels, follow us, @MoneyRipples on Instagram, Facebook, or LinkedIn. I love being able to talk with you. Thank you for asking good, solid questions because that’s exactly the show we have for you.
As a reminder, also, go check out our website, MoneyRipples.com. If you want to know how much passive income you can create in the next 12 months, go there. Take the Passive Income Calculator. Fill it all out. If you leave it blank, you wasted our time and wasted your time. Fill it out to see what your magic number is to see how much cashflow you can create in the next 12 months.
Speaking of passive income, I want to talk about passive income. Many times, I see on social media that as we start to get comments from people, we always get trolls and hecklers. Behind some of these heckle-type comments, there are some good questions. People are a little bit ticked off about false advertising when it comes to passive income. There are a lot of people talking about passive income, even Robert Kiyosaki. In Rich Dad Poor Dad, he talks about passive income.
He tells you some examples but it’s hard to be able to take it from point A to point B, or point Z, even trying to figure out what is the way to get there. What’s the path to hit that? People get caught up in the strategy, and then they forget that passive income has to have income with it. You got to make sure you are picking the right vehicles and doing the right things.
There’s also another trend I’m seeing that ticks me off. I’m seeing this trend of people that claim passive income but in truth, it’s not passive at all. It’s creating a brand new business. You see this even in real estate. You will get these people that say, “You can build this real estate business right now. You can create passive income for yourself,” but it does require to have to build a whole brand new business. It requires building a team to hire and fire and do all this stuff to eventually maybe have income that could be six figures. It may be even seven figures but you will be working full-time eventually if you want to get to seven figures. You pretty much create another job. To me, that’s not passive income.
I’m not even talking about the accounting definition that an accountant would say, “Passive income is income earned specifically from real estate.” We are not talking about that. We are talking about passive income in the sense that you have income generated without you having to work so hard for it. That’s what I refer to as passive income.
Sometimes, people will come to us and say, “Do you teach us how to do short-term rentals or how to do active investments?” I don’t, but Kyle Stanley does a great job of that. I heard from him a few weeks ago. He’s awesome. That is an actual business. It’s not passive. You can create some semi-passive or residual income from that but you still got to work for it. You still got to have systems in place. You got to manage, protect, and get it to grow. You can make sick amounts of money doing that but you will be working part-time to get that awesome amount of income.
Some of you might say, “That’s not for me. I’m already working full-time. I’m already in a business that I love or I’m working in a job.” Maybe, “I don’t love my job. I hate my job or I hate my business. I want to get out of it completely. I want free time.” If you want that time back, that’s the passive income we talk about here. We are talking about something where you can use your money to invest. There are ways to do it with little bits of money but usually, it requires you to put more time and attention into it.
Even when we have people like Kim Daly talking about franchises, you are putting time, effort, and money into that. If you want a little bit more time back, you got to put in a lot more money. You might be putting in hundreds of thousand dollars to then only be working part-time. It may be 5, 10 or 15 hours a week in that business. We do not talk about that at all. We are solely talking about putting your money into something that generates passive income. What do I mean, for example? We talk about turnkey real estate rentals.
Rental real estate can really kick the crap out of mutual funds. Cashflow is awesome and you can make more money. Click To TweetWith most rentals, you have to find the property and know where to look. You got to be making bids and offers. You got to be finding the tenants. You got to be dealing with the tenant’s toilets and trash. Even getting the property to start paying you, in the beginning, is a lot of work. That’s horrible. If you don’t have to go through all that work, you can buy what’s called a turnkey rental. Turnkey rental says, “Let’s use a turnkey company to help us find the property.” We can say, “Here are a few properties we can pick from that we already know how much cashflow is going to generate. “Eeny, meeny, miny, awesome. I’m going to take that one.” You then buy that property.
They don’t just help you vet. They help you find the financing. They help you find the lender if you need a lender. They also do all the work finding the property manager or if they are the property manager, they are the ones that fill it with tenants. You don’t go looking for tenants. You don’t go screening through applications. You simply buy the property and collect checks.
Can there be problems that come up? Of course. There could be situations where the property manager will reach out to you, saying, “It looks like there’s a maintenance issue. We might need to fix it up.” Usually, when you buy a property, the home inspection report will catch those things, so you don’t have to deal with maintenance issues very early on but it’s possible. Also, there could be a vacancy. They might have to evict the tenant. It’s not that you are dealing with that drama. You are just going to have to follow up with them. Your biggest drama is going to be if you have a good property manager. That’s it.
I’ve got some properties that I keep wondering if we are still getting paid for. We have to check to make sure we are still getting paid because there’s zero drama. We have had the same renters in there for years, paying us. We even raised rents on them. I don’t do it. The property manager does it for us, and it’s great. As I showed you before in previous episodes, where how rental real estate can kick the crap out of mutual funds, cashflow is awesome, and you can make more money.
As a follow-up to one of those episodes I had shown you with how those numbers looked, I forgot to reinvest the cashflow that you got. I let it sit there in a 0% account. I didn’t even talk about putting it into infinite banking to earn a little bit better return or even taking that money, whether it’s in infinite banking or not, and reinvesting it. The number you saw and how it compared to a very liberal, aggressive returning mutual fund, guess what? It has kicked the crap out of it. It would have been way better. You would have been seeing easily $500,000-plus types of returns from that investment.
That is a follow-up from a few episodes ago when we were talking about what’s better, whether it is mutual funds or real estate. Hands down, we kick the crap out of it. Those are turnkey properties we are using as examples in that episode. There are also other things. You can put money into syndications where you are pooling your money with other people. You can buy apartment buildings and self-storage.
We even talked about oil and gas. There are even oil and gas types of investments. You can put money into it. It could even be into businesses. You might be going into a car wash together and things like that. We had Whitney Hutten. We had her on our show. It’s the same thing. If you put your money and pool your money together, you can make money there. You can also use this money and create passive income from where you do business partnerships. They were like investments but you are in a partnership together. Someone else does the work.
I have a partnership where from the real estate that they are doing, it’s generating about $4,928 a month from $125,000 invested. I’m loving that we are getting massive cashflow from that deal. Those are the things that we can do with that. Those are passive investing. That’s the thing where somebody else operates it. Somebody else manages it or controls it. You might have control ownership in those things, so that’s good. You want control and ownership in many of these cases but you are hands-off. You are not dealing with all the crap that goes with it. That is the thing that’s being misled all the time that you are seeing out there.
Whenever you hear people saying passive income, they are saying, “You can go be a wholesaler. You can go and get a wholesaling business that you can start up and make money off that. You don’t even need money. You just have to put all this energy and time into it.” That’s true but it sucks, too. It’s good for some people but you may not want another business or job. You may not want a flipping business where you have to be a real estate flipper. You don’t want to have to maybe set up that Amazon store even though you can make great money. Nothing is wrong with doing these strategies but I can see why many of you have been complaining about passive income.
The problem is that these people are telling you it’s passive. That is 100% bull from my definition of passive income. My definition is that you get your money working for you, so you have to work for that money. That’s my definition of passive income. Almost anything you see out there, when they claim they help you with passive income, does not fit that definition. They generally require you to do a lot of work. Sometimes, it requires not just work but also money to go with it, too. To me, that’s not cool. If I want to be passive, I want to be able to get my money to work for me. I want to use that money, and that money does the work. It’s not me. The money does. That’s how I should be passive.
If you've got low cash to use to invest, don't even worry about passive income. Worry about building up your savings. Click To TweetGoing back to the accountant. If you are an accountant, you are going to say, “That’s not passive income. That’s only dealing with real estate rentals and things like that.” I get it. I know. You want to be nitpicky on the definition of the term. I don’t care. This is the term I’ve given you, so you understand it. You call it whatever the heck you want. You are earning interest on your money. You are earning dividends. You are earning passive income if it’s a rental. The point is that you are making money while you are not working. Your money is working harder so that you don’t have to work so hard for it. How many of you guys want that?
That’s why you see our people, guests, and clients coming on, and they are talking about that. That’s what they are doing. They don’t have another job that this is creating for them. This is something that they are putting their money there to invest. It works great. You might be saying, “What if I don’t have money?” I will tell you this as advice. If you don’t have at least $50,000 to $100,000, your worry is not about creating passive income now. You can do things as we advertise for a company that will take a minimum of $1,000 investment but that’s not the thing.
Think about this. You are 10% on $10,000. Let’s say all you have is $10,000 to invest. Ten percent means you earn $1,000 in a year. Although you could do that, your goal should be focused more on, “How do I generate and earn more income?” It is not from passive investing like what I talk about. It could be some of these part-time side businesses we are talking about or these side hustles. It could be getting better at your own job, business or work. It could be your W-2 job. How do you serve your employer, clients or customers better? Focus on that to build that cash more.
If you are a business owner, you should be focusing purely on, “How do I generate more profit in this business so I don’t have to keep generating more sales? How do I generate more profit so more come back home?” That money turns around and creates passive income for you. While you are earning all this money and profit inside your business, you are also on the side earning this passive income over here, helping create some safety in your situation. You own a job if you come from that mentality. If you have a job where you work for an employer, you want to be able to take as much cash as you can. This is why funding your 401(k) becomes a joke.
I spoke with somebody who said, “I know your ideas of 401(k)s on this show. I agree. I don’t trust the government. I don’t trust that people won’t watch how to dip their hands into my money because that’s what the 401(k) does. It allows the government to do whatever the heck they want with our money based on a little vote from the senate. I don’t trust it. Where do I put my money?” I’m like, “Let’s get it over here. We can funnel it through infinite banking. You can funnel it through your checking or savings account. We can use that money to generate passive income.”
If you’ve got low cash to use to invest, don’t even worry about passive income. Worry about building up your savings. This is where infinite banking could be a great strategy to help you build your savings quickly because you are earning more than point nothing percent in your bank. That’s why we use it. That is a great strategy you can use to build up that cash to then, later on, get that money working for you.
I would much rather have you invest $100,000 or $200,000 to make $10,000 or $20,000 a year versus $5,000 or $10,000 making $500 or $1,000 a year. The best thing is to focus and hone in on, “How do we keep generating more money?” You can always invest in smaller things. We even talk about that in our Wealth Accelerator Academy. Focus on trying to build up that cash. For those of you that already have the cash, the question is, do you want to work for it or do you want to be passive? That is our forte. That is our specialty. That is what we do here at Money Ripples.
Here’s the other thing. There is one thing we don’t do that everybody talks about doing that creates passive income. Maybe they have a passive investment like syndication but guess what? It’s their own syndication. Where do they tell you to invest? It’s in their thing. It’s the one thing that they have. Their one option, they tell you to invest there. Granted, that’s closer to passive income but then you have to question, “You are going to tell me to invest in their fund because that’s where they make their money.”
We don’t raise capital. We don’t raise funds. We are not even investment advisors. We do have, however, a lot of people that we have vetted in our network of 20-plus people, whether it’s turnkey operators, syndicators, people that are creating partnerships, franchise type of deal brokers, and things like that. We got all those people to help you be able to match up with those investments where we are not the one selling it to you. We get to help you stand in your corner, saying, “Based on your goals, these are the better investments for you. Let’s narrow down the selection of these few, and then you get to pick from those what you want to do.” It’s much simpler.
We give you strategy. We help you find out where to find the cash and make it work for you. We get you to move along and say, “Now, we can invest with these people that are not guaranteed by any means but they are vetted in a way that they have a good track record. They have a great history of paying their investors consistently.” That is what’s most important. You want to make sure you get paid consistent and predictable passive income with your money, not something where you are always guessing and wondering.
We don’t want to speculate. We don’t want to gamble your money. You want to make sure you are doing the best thing with it. The great thing is you get to keep full control but you get somebody in your corner to say, “Based on what we already know and the people that are in our network, here are some of the best places you could have your money working for you right now.” That’s what I mean by, “You can live your life today, not tomorrow, and get your money working for you.”
If you have questions, you could always go to MoneyRipples.com. Reach out to us. Book a call and say, “Am I at this place?” I would say this. First and foremost, before you even do that, go to that Passive Income Calculator and see what’s possible. If it’s less than $20,000, that is great. Go look at our Wealth Accelerator Academy. If it’s more than that, you need to be talking to one of our reps to see if maybe we’ve got something that could change your life for the better where you are creating passive income without all the work and toil. You are creating a side hustle or wondering if you are investing in the one little fund option that they have. That’s what we got for you. Be sure to visit us on the website and ask us any questions there. Go and make it a wonderful, prosperous week. We will see you later.
Important Links
- @MoneyRipples – Instagram
- Facebook – Money Ripples with Chris Miles
- Facebook – Money Ripples
- Passive Income Calculator
- Rich Dad Poor Dad
- Kim Daly – Past Episode
- Episode – Are Stocks or Real Estate the Best Investment
- Whitney Hutten – Past Episode
- Wealth Accelerator Academy