Growing your money is like planting. You don’t leave it to grow. Instead, you nurture it. It requires management and patience. In this episode, Chris Miles reveals the difference between passive income as a myth and a marketing ploy and when and how you can make it a reality. He highlights the value of being a good steward in managing your finances. Tune in now!
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Is Passive Income REALLY Passive?
Welcome to the show that is for you, those that work freaking hard for your money, and you are now ready for your money to start working harder for you. You want that freedom of cashflow today, not 30 or 40 years from now, but right now, you can live that life that you love with those you love. Most importantly, this is not about a get-rich-quick type of thing. It’s not about that at all. It is not even about getting you rich. It is about living a rich life because, as you were blessed financially, you now have a greater capacity to bless the lives of those around you.
That is the ripple effect I’m here to create for you. I appreciate you tuning in. You guys have been binging as always. I appreciate you sharing this with other people. I appreciate the questions and the feedback, and the fact that many of you reach out and ask for help. That is something that is what brings us joy. It helps us to know that we are making a difference in the world. Thank you for allowing that to happen. If you haven’t done already, please go to Apple Podcasts, iTunes, or whatever you use, rate, and review us. If you love this episode particularly, especially we talk about passive income, we love you to talk about that. We love to have you guys do that and subscribe to our YouTube page.
The question that often is debated over and over is about passive income. Is it passive or not? It is the dream. It is human nature to want to get something for nothing. That violates all principles of the universe and God’s law. To get something for nothing is not true. That is not the case at all. That has never been a true principle and always leads to people getting duped and people losing. You reap what you sow is what happens. That is the law of the harvest. You got to plant those seeds and nurture them, allowing them to grow, flourish, and prosper.
This is true in your own financial life. We cannot simply think we can throw money at stuff and hope it pays us. That is planting a seed, but it does need to be nurtured. Along the way, it has to be done. My daughter was at church. The Sunday school teachers gave her a mustard seed. She talks about the faith of a mustard seed. If you had that much faith, you could see the fruits of it.
My eleven-year-old daughter took that to be the case. She got that little tiny mustard seed. She looked up online how you can grow it. She was amazed at how big the tree can become. Despite being a tiny seed, it can grow into a decent size tree, at least 20 or 30 feet tall. She planted it. There was a worry because we had colder weather than normal. It was supposed to be colder than we were supposed to have. While my daughter was away, and that was happening for about a week, my wife and I started losing faith in that mustard seed.
Needless to say, when she came back, and the weather started to turn around and warm up, the little sprouts started to come out of the surface. If you didn’t water it and didn’t do anything to it, this thing is going to die. It has to be constantly nurtured, managed and watched over in the earth. That is true also with your money. Your money does need to be managed, watched over, and have stewardship over it. This is why we talk about stewardship.
Whatever you are not comfortable with stewardship-wise, you will always go back to where you are comfortable. If you are not comfortable having $1 million, you will never have $1 million because your stewardship will always shrink to what you are comfortable with. That is your own barometer test. If you are happy with $1,000, that is what you are going to have, maybe for the rest of your life. You will constantly be paycheck to paycheck.
You might dream, shout, whine, and complain that you want freedom. Yet if you are not comfortable having more money, you won’t have it. It is something you will subconsciously do. You will sabotage your own results. I’m going to come back to this one point. Is passive income really passive? Yes and no. It depends on how you are doing this.
Passive investing, for the most part, still requires management. You still have to manage and watch over your money. You need to protect your money because nobody cares about your money more than you should. That is a big key thing. You have to remember you were a steward over this money. I know you are born with nothing. You leave with nothing. Everything in between is stewardship. It is whatever you are willing to manage.
If you are going to turn your money over to make it more passive, which is the way to do that, and you want your money to work for you passively, and that can happen, it means you are turning your money to somebody else and letting them deal with it. I don’t mean money managers, people that put your money in mutual funds because the truth is, they are not doing anything with it. They don’t care what you are doing with your money.
When we talk about alternative investments like real estate, you can take that money and use that to buy a property. You might have that property managed by somebody else, but you still ultimately own that property. You are responsible for it. When it comes to turnkey real estate, which is the more passive of the real estate rental type of investments, even in that situation, you still have stewardship. You still have to deal with issues if they arise.
For example, although you may not be the one dealing with renters, and whether you renew their leases or not, you still have to be aware of it. We got an email today saying, “Your lease is going to renew in July. Be ready.” They said, “We are going to increase it by 3%.” The tenant might say, “No.” It might mean that the property managers are back on the drawing board to get a new tenant. I still have to watch that and manage it. You have to manage the property manager. Even if there are repairs to be made, you still have to pull the trigger. Even if they have the people to go and do the repairs, and maybe they even did it for you, you still have to pay the money for it. There is still stewardship behind that.
More passively than that, it could be if you are putting your money into funds. I don’t mean mutual funds. I mean into real estate funds or debt type of funds, or maybe you become the bank. You are loaning your money to investors and letting them do everything. We talk about Secured Investment Corporation as the sponsor here. They do that thing. They are loaning their money to other active real estate investors, and you are getting paid the returns.
Is it purely passive? That is close. Getting very passive investments in the sense that you are doing nothing. You are turning money out to them. I would warn you not to turn a blind eye to what is going on with your money. You still manage and watch it. It doesn’t mean you have to be overly skeptical and constantly in worry. That is not what I mean by stewardship.
Stewards come from a place of abundance, not scarcity. Savers come from a place of scarcity. Spenders come from a place of scarcity because they never have enough. Stewards realize they have management over their resources. They want to be able to use it in the best way possible. That is where this investing comes in. That can even be true with different types of funds and investments where you might turn your money over.
Even syndications, even if you put your money into a singular deal, that deal is being managed and controlled by somebody else. If something goes wrong, it is possible you could have ownership and control of that. You might be foreclosing on that investor. As a group, where you are pulling your money with other people, you might have to take over that property.
It is not preferential. Many people think, “Banks want my real estate.” No, they don’t want your real estate. They want you to keep paying them. That is what they want. They want the cashflow. Just like you want cashflow, they want to be passive investors too. If they have to take the property from you, they will, but that is not the preference. They rather work with you if you ever go late on payments rather than have to take over the property, turn around and sell it to make a profit. They know they could, but that is not the business they are in. It is the same thing for you. You could get active with the management of your money, but that is not what we are proposing here.
Here is one thing I will bring up. I can see why you might be skeptical about whether something is truly passive. Our clients, when they are dealing with types of investment that we are dealing with, for the most part, are hands-off. They still have to be aware of what is going on, but it doesn’t mean that they are actively in the day-to-day management of anything. In my opinion, that is close to passive. I’m much a passive investor. I don’t like to do things like flipping properties. I don’t like to go and find my own deals. I don’t do that active investing. That is not my thing. I did that a little bit before. Honestly, I didn’t like it. I love being a passive investor that way.
Does that mean I turn a blind eye and ignore everything? No. I still watch those things, make sure checks are coming in, and communicate every once in a while. If you do have to communicate, in some ways, it may not be for a good reason. Does that happen a lot? No, even in these times right now. Does that happen a lot? No. Does it happen? It is going to happen, guaranteed. Understand that it can be passive.
It is easy to be skeptical of this. If you ever try to google anything about passive investing or even look up anything, it is disappointing. For example, every once in a while, someone will say, “Have you heard of so-and-so?” Maybe it is an influencer, a man, or a woman. I looked up this woman. I thought, “I like what she has to say this. She aligns with our message.” I looked up her website, and I was like, “She is talking about passive investing.” Does she do what we do? Does she help clients 101 and help them find those deals and connect them with vetted investment professionals?
As I started to dig further, trying to get past all the marketing language and everything else, the answer was a resounding no. One of my pet peeves when I hear about passive investing, is you hear people say, “We teach you how to be a passive investor and how to make $10,000 a month of passive income.” What does it require? It requires you to start a brand-new business. It can be an online eCommerce store, investing business, or wholesaling. They were like, “No money out of pocket. It is passive.” No, it is not.
If you have to create a part-time business to do that, it was never passive in the first place. It is an active investment. There is nothing wrong with active investments. If you got more than enough time, great. Use that time and energy to generate additional streams of income, even if it is active. You can make millions of dollars streams of those things. You can even go and start buying and flipping properties. You can make more than the passive investments we talk about here. You can make higher returns than that, believe it or not.
You could make single double-digit returns or even 20% plus returns doing your own investing. Maybe you can make more than that. That is awesome, but it requires your own time and energy to input into that. Time and energy are ways to increase returns. I’m talking to those of you that are specifically like me in some ways, where you don’t want to spend a lot of time doing this stuff. You don’t want a part-time business. You don’t have enough time anyways. Maybe you have money that you know you can do something with, but you want your money to start working harder for you so you don’t have to keep working hard for your money. Sound familiar? I say that every week.
If you are the type of person who has some money, you are like, “What do I do to take these resources and make them work?” That is where passive investing comes in, and it can be great. Even people that are active investors will often come and say, “Chris, I do great. I make several million dollars a year with my real estate business, but I want to diversify a little bit more. I want some things to be more passive. I want to be hands-off for once.” That is perfect.
There are options to do that, not in the real estate space with rentals, apartments, self-storage, oil, and gas, or land. There are many different ways. You can deal with these investments passively. You get people out there saying, “I’ll teach you how to create passive income.” When you find out it is a business, you feel bait and switch.
It is annoying for me because the truth is, if there was somebody doing what we would do and they did it well, there would be no need for us to exist. I would connect you to those people and be hands-off. I would say, “Somebody does this better. Do it.” There are even groups out there that will charge you an annual fee. There was a comment within our own private group for our VIP clients. They start saying, “Have you guys worked with this group before?” They are a group that talks the same stuff we talk about. They are one-strategy focused.
If that strategy doesn’t work, which has stopped working, it doesn’t work at all. Their clients are ticked. That was the one thing that came up from the thread. They said, “Save your money. It is not worth it.” Some of them came from that company to us. Some of them who were working with us went to work with that company. They said, “Yes, I did it for a year. It wasn’t worth it. I came right back to Money Ripples.”
It doesn’t mean they are a bad company. It means that their model isn’t what ours is. Not to mention their coaches don’t teach them how to do anything other than, “Throw your money at these investments that are, in my opinion, high risk and maybe get some cashflow. We do all the work. We run all the numbers. You can’t run your own numbers.” That is one thing we teach our clients is how to be more independent.
Not everybody wants that. Somebody who wants somebody to spoon-feed them, treat them like little babies, cuddle them, and say, “You don’t have to think about anything. Let our coaches do all the thinking for you, and you throw your money at this crap.” That is not our thing. We want you to be adults. We want you to be responsible. We want you to grow up.
There is another company I know well that does the same thing. I started seeing the language. I said, “They are talking about investing.” I dig and go behind the scenes a little bit more. They don’t talk about investing at all. They talk about investing in yourself, your passions, and your purpose and building a business around it but nothing about passive income or alternative investments like they are saying. They use the words alternative investments, but where are the alternative investments? It is your own business. It goes right back to active investing. It drives me nuts.
There are some people that are charging for mastermind groups. They will charge $10,000, $15,000 to $20,000 a year, to be a part of those groups. I’m in mastermind groups too. If it matches your objectives, perfect, but when they try to match you up, they are bait-and-switching you in that process because they are selling what they sell. How do you know you are getting a good deal? How do you know you are getting good advice? That is a group type of mentality.
The community is great, but it is just a community. What about for you, personally? How do you personalize your own plan that support is lacking? That is why we came. We realized that we have this niche. We wanted people to get passive income and be as close to passive as you could while being a wise steward of your money.
That is where true financial freedom comes in. It is when you know you can be an abundant mindset and be a wise steward of your resources, but yet still leverage other people and have that community base, not from the vetted investment professionals, but even other clients and people as well in your community, colleagues like yourself, people on the same path, the same journey makes it much better.
That is important, especially as we move into times like these where I know and you know that things are adding up. You know that there are problems going on in the world right now. There are problems going on in the economy and banks right now. There are weird things going on that I guarantee that the media is not even talking about right now, that we are going to see develop over time.
You need to make sure you are in the right places with the right people. I agree that you should have some passive income. I’m not saying that is your whole plan and you don’t make active income because the truth is, active income is your economic engine to allows you to have the money to create passive income. This is a great time to develop more passive income. You need passive income.
If you are a business owner, what if your business goes down? What if they get shut down because of COVID for several months? What do you have got going? How do you make sure that you stay in the abundant mindset and stay clear mentally and emotionally while those times are going on? How do you make sure you are safe and secure? Your spouse says, “I want to be safe.” How do you make sure you can protect them and provide for them even when things go crazy in the world?
If you have a W-2 job, how do you make sure if you get laid off, you are still okay? We had Louis Visco on here talking about how COVID affected Hollywood big time, yet he was able to relax, pick the right projects and do the right things. I had other clients who were furloughed. They were laid off for over a year. That passive income was what pulled them through. Even if it was barely and it was provided for their bare essentials, they still were able to make it through fine, whereas others were hoping that the government would take care of them.
I have nothing against people using the government from time to time to help you out of a bad situation because I was there in the last recession. I had to have a little bit of government help with food stamps. It was that bad. Being over $1 million in debt and not having enough cash to even pay for your mortgage payment or hardly having enough money for food, you need help. I’m grateful for that, but that is not a permanent situation. I can guarantee my taxes are more than to pay that back.Manage all your finances and do a great job. Allow your money and your legacy to continue to grow. Click To Tweet
This is all about us becoming free. It is about becoming independent. Not independent in the sense that you are doing it all by yourself, but interdependent with other people, where you work within a community. You help protect and preserve each other. You are watching each other’s backs. It allows you to become a better and wiser steward of the resources that you have.
I want you to have clear expectations that passive income is never fully passive. You still need to be a wise steward. You still need to apply the law of the harvest to your money. You want to see it grow, continue, and keep going on. It allows you the opportunity to keep being a wise steward, watching it, maintaining, learning, growing, and becoming better. If there is any way we can help you there, we’d love to help you that way with Money Ripples.
My advice to you is to watch out. There are many people out there talking about passive income. Dig deep and ask the right questions. Ask, “Is this really passive?” I will be honest with you, in our case, it is close, but it is not fully passive where you can be hands-off, ignore your money, and magically, it shows up. The world doesn’t work that way and never has, never will. You need to have it straight, honest, and true. There are ways to have passive income not requiring you to be full-time or even part-time with a business on the side, but potentially, even less than an hour a week or less than that.
You can still manage all your finances and be able to do a great job, allow your money to keep growing, and allow your legacy to continue to grow, which can pass on from generation to generation. It allows you to become a better contributor and someone that can be a benefactor or of benefit to your community. I hope you will make it a wonderful process week. Let us know if you have any questions. You can always visit us at MoneyRipples.com. Make it a wonderful day.
- Apple Podcasts – Money Ripples Podcast
- YouTube – Money Ripples Podcast
- Secured Investment Corporation
- Louis Visco – Past Episode