RPF0447-The_Passive_Income_Myth
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00:00:31.000 | Good morning, Radicals. Happy Monday. 5 a.m. here on the East Coast, and today, let's kick
00:00:36.800 | off your week with a little discussion of passive income, the myth and the reality of
00:00:45.220 | passive income.
00:00:47.000 | Welcome to the Radical Personal Finance Podcast, the show dedicated to providing you with the
00:01:07.000 | knowledge, skills, insight, and consistent daily encouragement that you need to live
00:01:11.920 | a rich and meaningful life now, to build a plan for financial freedom in 10 years or
00:01:17.000 | less, and to sort through all of the nonsense, the lies, the misdirections, and the marketing
00:01:24.320 | copy that so consistently pervades this world of financial advice.
00:01:30.760 | Today, we're going to tackle one of the sacred cows of the early retirement financial independence
00:01:40.440 | of personal finance, wealth building, living a rich life now world. I need a new name.
00:01:45.720 | That was way too much of a mouthful, but we're going to tackle one of the sacred cows today
00:01:48.960 | of passive income.
00:01:52.200 | This last week, I was looking around the personal finance space on iTunes, just trying to see
00:01:55.880 | what shows were ranking well, and I noticed that there are at least three, I believe,
00:02:02.360 | three shows right now that are top-ranked money shows all related to passive income.
00:02:08.160 | I started taking a quick look at the titles and things like that, and I said, "All right,
00:02:12.280 | these shows are doing awesome. It's time to tear down some sacred cows in this discussion
00:02:19.240 | of passive income," because the way that you hear people talk about passive income to you
00:02:23.440 | so consistently is an absolute myth. It really is, but it does exist. Passive income does
00:02:33.800 | exist. Today, I'm going to tell you what words we should use instead of passive income and
00:02:38.880 | how you can actually get passive income. No, you don't do it by signing up for my passive
00:02:44.120 | income program.
00:02:47.200 | Before we do that, I will work on my passive income by doing today's ad. Today's ad is
00:02:51.880 | for Paladin Registry, the financial advisor referral service that I recommend to you.
00:02:58.520 | Paladin Registry is a simple way for you to start your search for a great financial advisor.
00:03:03.680 | One of the things – cheat, cheat, cheat – one of the ways that you actually can
00:03:08.120 | get passive income is through something like Social Security, which is an annuity stream,
00:03:15.760 | and through taking money distributions from an investment portfolio. Most of you will
00:03:24.080 | wind up in this situation at some point in your life, and this is a really good place
00:03:28.880 | for financial advice. Financial advice may or may not work for you when it comes to figuring
00:03:33.520 | out which network marketing company you're going to join to build passive income, but
00:03:37.240 | it definitely is important as you're starting to accumulate significant assets and trying
00:03:42.960 | to make some of those really important decisions, such as when do I take Social Security, such
00:03:47.480 | as how do I structure my portfolio to provide an income for me so that I can have passive
00:03:51.680 | income for the rest of my life.
00:03:53.800 | If you have interest in discussing some of those questions with a qualified financial
00:03:56.480 | advisor, reach out to my friends at Paladin Registry for a referral. The way it works
00:04:00.960 | is you go to RadicalPersonalFinance.com/Paladin – P-A-L-A-D-I-N, or link in the blog post
00:04:06.520 | or show notes, which are right there on your phone screen – RadicalPersonalFinance.com/Paladin.
00:04:11.560 | Click that link. It will forward you through to a landing page. You put in your name, your
00:04:14.480 | address, your info, your email address, your phone number, how much money you have, and
00:04:17.920 | Paladin Registry will connect you with a couple of qualified advisors there in your local
00:04:21.760 | area, who most importantly have been vetted and have been screened for accuracy, integrity,
00:04:28.640 | disciplinary record, and knowledge and experience and practice structure.
00:04:33.400 | Go to RadicalPersonalFinance.com/Paladin. I always say this. I can't promise that you're
00:04:38.000 | going to be able to find your next financial advisor at Paladin Registry. The application
00:04:43.040 | process that you should put a financial advisor through should be significant. You got to
00:04:47.320 | find somebody who's going to be a good fit with you, your personality, who really understands
00:04:50.800 | you and your goals.
00:04:52.800 | However, I can promise you're going to start at a better position than picking up the digital
00:04:58.240 | phone book. RadicalPersonalFinance.com/Paladin.
00:05:02.120 | First let's go straight to the heart of the matter. The things that most people refer
00:05:05.440 | to as passive income are in no way passive. A good example here would be Radical Personal
00:05:13.120 | Finance. Some people would take what I do, which is to build a business, giving you a
00:05:17.280 | podcast trying to teach you about money and how to live a rich life now, and the fact
00:05:21.220 | that I earn revenue from giving ads to you like the one I just did. I'll get a check
00:05:25.800 | at the end of the month from Paladin Registry. For every one of you that goes through that
00:05:28.720 | link, I get a little commission because you go through that link, you put your info in
00:05:32.000 | there and they send me a commission check. That's how that deal works.
00:05:35.120 | So at the end of every month, I get a check from Paladin Registry. And so therefore, this
00:05:40.840 | is passive income, right? Because I just sit at my house, speak some words into a microphone,
00:05:44.980 | and I collect a check. Those of you who know my work schedule know this is not passive.
00:05:53.720 | It's 5 a.m. That's when this show is scheduled to go out, 5 a.m. That means that I'm actually
00:05:59.280 | not recording it live, of course. It's Sunday afternoon here. I am determined to get the
00:06:04.180 | show published at 5 a.m. on Monday morning. Sunday afternoon, my family is asleep and
00:06:09.080 | here I am recording today's show. So I can promise you that it is most assuredly not
00:06:13.800 | passive. While many people are sitting around and watching sports and hanging out, I am
00:06:18.400 | here working. And I do not want to be sitting here in front of this microphone right now.
00:06:23.480 | I really don't. I would have a book, a new novel that I'm going to read, working my way
00:06:28.280 | through the one-second-after thriller series of Collapse of the American Economy because
00:06:34.600 | of EMP. And I want to go and start on the next book in the series. And I want to lie
00:06:38.400 | on my couch on Sunday afternoon and do that. But I'm not doing that. I'm sitting here in
00:06:42.320 | front of the microphone recording this for you right now. So it'll be there in your podcast
00:06:46.000 | feed on Monday morning at 5 a.m. That's my personal commitment to myself.
00:06:50.160 | Now, this is my business. But I'm telling you this to demonstrate to you that this is
00:06:55.040 | not passive income. But every single day, if I look on Facebook or every single day
00:07:00.080 | I look at the ads that are running all over the place, you'll see some internet entrepreneur
00:07:04.560 | who is trying to sell you a program on how you can get rich on the internet and how you
00:07:08.760 | can build passive income through your online business. Can you make money through the internet?
00:07:14.640 | Yes. Can it be more passive than going out and digging, you know, using a shovel and
00:07:19.500 | digging ditches all day? Yes. But it's not passive income. It is in no way passive. What
00:07:26.080 | it is is residual income. That's the point. And that's a better term for the vast majority
00:07:34.800 | of things you hear referred to as passive income.
00:07:38.120 | Some of these ads are just so absurd, the ones that I read, how somebody, you know,
00:07:42.840 | made all this money in two weeks with this brand new program. You can do this. But what
00:07:49.120 | they always miss is the amount of money, or sorry, the amount of time and the amount of
00:07:52.560 | work that that person has put into the study and the work and the preparation that took
00:07:57.360 | them to that point. The skills and the knowledge that I have that allow me to sit down and
00:08:01.720 | do the show every day have taken me tens of thousands, and I don't want to exaggerate,
00:08:06.720 | but I think tens of thousands of hours would be accurate, to accumulate and to build. And
00:08:13.400 | this is the way that most passive income things are.
00:08:16.720 | Think about it in the sense of a highly paid professional, somebody like a physician or
00:08:21.500 | an attorney. Do they get their high rate of pay simply because they show up to work? No.
00:08:28.780 | Do they get their high rate of pay because they show up and they have us reach a certain
00:08:33.280 | age? No. They get paid because they've spent a lot of time studying, learning, and they
00:08:39.240 | developed specific, unique skills. And there is no place that you are going to go where
00:08:46.200 | you're going to get paid without you doing something valuable and helpful.
00:08:54.720 | Passive income really doesn't exist, with one exception. I'll get to where it does exist
00:08:59.200 | in a moment, but it really doesn't exist. So wipe this idea of passive income from your
00:09:05.320 | head. I know a lot of wealthy people. I know a lot of people in the online space. None
00:09:09.340 | of them have passive income. I know a lot of people in network marketing. I have had
00:09:15.080 | clients who have been six-figure earners with network marketing and multi-level marketing
00:09:20.000 | approaches. None of them have passive income. I've known people who own businesses. None
00:09:25.560 | of them have passive income.
00:09:29.240 | Passive income is very hard to come by. What most of these people have is residual income
00:09:36.800 | because all of those types of opportunities are ways where you can disconnect your hourly
00:09:42.220 | work from your hourly pay. I think there's a good place and time to be working in a situation
00:09:53.120 | where you work an hour and you get paid an hour. Good places and times for that is when
00:09:57.120 | you're young and you don't have any meaningful skills that you can bring to the marketplace.
00:10:00.880 | If you're 14 years old and you're working on an hourly wage, that's good. Another good
00:10:05.180 | place would be is if you're just at the beginning stages of your career, you don't have a lot
00:10:09.660 | of skills yet and you need the money. If you need money, hourly work is a great place to
00:10:14.600 | go.
00:10:15.600 | But in general, if you're being paid by the hour, that means in many ways you're a commodity.
00:10:22.040 | You may be a highly paid commodity. Your hourly rate might be $300, but you're a commodity.
00:10:27.160 | They can take you out, bring somebody else in and replace you. That's okay. There's nothing
00:10:31.600 | morally wrong with it, but it's not as exciting as the world of residual income. I'm convinced
00:10:38.200 | that in almost every business, you can find a way to go from being paid hourly to getting
00:10:43.620 | a share of the profit.
00:10:46.620 | If you are a laborer, you work in a construction job, you can move yourself up and you can
00:10:54.580 | build skills, move to the top of the labor force and you can move over into management
00:10:58.000 | if you want to. You can build your own company. You can sell jobs and just take a cut of the
00:11:02.240 | profit. There's all kinds of things you can do. And these types of areas of work start
00:11:08.720 | to open up the power of leverage for you.
00:11:12.520 | Leverage allows you to profit from other people's activities, other people's work, other people's
00:11:19.560 | money, other people's contribution. Leverage also allows you to magnify your own work and
00:11:25.880 | you can get a much higher return when you're no longer constrained to the hourly rate that
00:11:31.600 | you get paid.
00:11:32.600 | It can also open up a lot of freedom and flexibility in your life. But you got to recognize that
00:11:37.960 | in order to get there, you're probably going to give up a lot of freedom and flexibility
00:11:41.540 | in the early part of your career. I don't want to leave you with the wrong impression.
00:11:45.680 | If you're working at a job and you earn a flat rate of 40 bucks an hour or 20 bucks
00:11:49.760 | an hour or $70 an hour and you do work that is honest, important, valuable work, you get
00:11:57.160 | paid a straightforward hourly wage and that allows you to meet your obligations, to save
00:12:02.280 | some money, you have money to give away, you have money to set aside for yourself, that
00:12:06.600 | is absolutely honorable and in many ways you can have a phenomenal life doing that.
00:12:12.480 | There are many times such as Sunday afternoon when I'm sitting here working that I often
00:12:16.720 | get a little bit jealous of people who are sitting on the couch watching football. My
00:12:21.120 | novel is sitting there and I really want to go and read it. So nothing wrong with that.
00:12:26.040 | But I know many of you are looking for something more. You're looking for something where your
00:12:29.480 | income is not tied to that specific hourly wage. Because one of the benefits of yes,
00:12:35.840 | I'm sitting here on Sunday afternoon recording the show, but by this next week I'm going
00:12:39.280 | to be ahead to where I'm not sitting here on Sunday afternoon.
00:12:43.480 | And then there have been many times when on Wednesday afternoon I have the flexibility
00:12:47.160 | to disconnect and go do other things. So it's a give and take. Most ways that you're going
00:12:53.520 | to create residual income, however, are going to require a huge amount of effort up front,
00:12:58.800 | a huge amount of sacrifice, a huge amount of work, a huge number of hours up front for
00:13:04.720 | you to get the benefits on the backside.
00:13:07.040 | One of the well-known books in this space that is very popular with my generation is
00:13:11.840 | a book called The Four Hour Workweek. The author, Tim Ferriss, it's a good book. But
00:13:14.880 | the premise of the book is that you can live on the four hour – that was an inaccurate
00:13:19.360 | statement. The title of the book tantalizes you with the idea that you can work four hours
00:13:23.720 | and earn a living on that.
00:13:25.680 | And the idea is that if you can set things up in your business where you have systems
00:13:29.160 | and processes that run your business, then you'll be able to just do a little bit of
00:13:34.280 | supervision, a little bit of overview, and a little bit of maintenance and everything
00:13:36.920 | will work great for you. Now it's a catchy title. It was beautifully designed. And it's
00:13:41.480 | nonsense when it comes to actual implementation.
00:13:46.400 | Now can you, for a period of time, set up a business that only requires four hours of
00:13:51.120 | attention per week? Sure. Of course you can. Tim Ferriss did it. He was the author of the
00:13:55.640 | book. But recognize that that business came after hundreds and thousands of hours of work
00:14:03.440 | to set it up. And recognize that every single success story that you hear – I have several
00:14:10.120 | friends who market various products and things like that. They're big – highly committed
00:14:15.280 | to the four-hour work week. Guess what? They put a lot of work in up front. Their businesses
00:14:21.600 | require management and supervision. And nothing works forever.
00:14:26.400 | It's not passive income. It's residual income. And I recommend you pursue residual
00:14:33.200 | income first. Residual income is very achievable in today's world. There are many, many ways
00:14:40.880 | that you can achieve residual income. There are many traditional brick-and-mortar businesses
00:14:47.160 | that will help you create residual income. You may or may not be able to enter into them
00:14:51.840 | because you may or may not have the investment capital needed. You may not have the market
00:14:56.080 | needed. You may not have the experience. But you can achieve residual income from business
00:15:00.580 | ownership of a local, traditional brick-and-mortar business. And there are a lot of opportunities
00:15:05.560 | that you should consider pursuing in that world.
00:15:08.400 | You can do this in the wild new frontier where I'm working in this world of online stuff.
00:15:13.360 | Lots of ways to do it. And they're not all shady. They work. You can do it with things
00:15:18.320 | like network marketing. Several of you have asked me for my thoughts and my opinions on
00:15:23.320 | network marketing. I'll do a standalone show on that at some point. But there's nothing
00:15:26.640 | fundamentally wrong with the idea of network marketing.
00:15:30.920 | If I went completely broke and I had no opportunities and no one would hire me, I would go and consider
00:15:37.800 | working in a network marketing company because it allows me to build residual income where
00:15:43.680 | I'm getting paid for my efforts and there's not much of a screening process for me to
00:15:47.920 | get in. It's one of the problems with network marketing. We'll deal with that in another
00:15:51.760 | show. But all of these types of things, and there are dozens and thousands more ideas
00:15:55.800 | that could be used to build residual income, that is eminently achievable.
00:16:03.960 | But what about passive income? Is it a total myth? It's not a total myth. I do believe
00:16:08.600 | passive income exists. And I'm going to give you three specific categories of passive income
00:16:13.320 | that I can think of that are truly passive.
00:16:18.000 | Number one, if you are the beneficiary of a trust fund that somebody else has established
00:16:24.160 | for you, you have true passive income. My wife and I recently finished updating all
00:16:32.160 | of our estate planning, new estate planning documents, new trusts, kind of established
00:16:36.480 | everything. And as I was working through the trust planning process for my children, I
00:16:40.560 | was just thinking about this and saying, "This is passive income. If I die and my children
00:16:47.120 | are the beneficiaries of the trust that we have established, then they will be receiving
00:16:52.040 | passive income."
00:16:54.320 | And if you are in a situation where you are the beneficiary of a trust, you have passive
00:16:58.040 | income. You get money for simply existing in that circumstance. Now, I hope for your
00:17:06.760 | sake that you're never in the situation because it very well could ruin your life. Many people
00:17:16.620 | look to this concept and say, "Wouldn't that be great? Wouldn't it be great just to sit
00:17:22.200 | back and collect a check from the trust every month and have to do nothing?"
00:17:26.960 | The answer is no, it wouldn't be great. It would be fun for a season, but very quickly,
00:17:33.400 | it will destroy your life as it has destroyed the lives of many other people. Unless you
00:17:41.400 | are mature and disciplined and very active in other areas of life, in that case, it can
00:17:49.880 | be a blessing. If you're mature and disciplined and a person of integrity and character, and
00:17:55.280 | if you're busy working at something that matters to you, then it can be a blessing for you
00:18:01.360 | to be able to enjoy an income like this.
00:18:07.280 | One of Warren Buffett's well-known aphorisms, beautiful, his quote was this, "I'm leaving
00:18:13.600 | my children enough money so they can do anything, but not enough so they can do nothing." I
00:18:20.120 | think that's a very powerful and concise way of articulating the truth. It's nice to have
00:18:26.520 | options, but I hope that you're never in the situation where you have the option of doing
00:18:32.200 | nothing because that can ruin your life. But that is legitimately passive income.
00:18:37.360 | Number two, passive income. If you are the beneficiary of an annuity stream, such as
00:18:47.160 | your Social Security payments, that can be passive income. Now, we're already breaking
00:18:54.000 | the test of passive income. The only true one is really is something like a trust fund
00:18:58.520 | because there you didn't do anything up front to earn it. If you're going to be the beneficiary,
00:19:01.720 | however, of a stream of income from Social Security, you've done a lot of work. You've
00:19:06.800 | done years and years of work to contribute to the system in order to be qualified to
00:19:11.080 | receive payments out of it. That is truly legitimately passive income. You don't have
00:19:15.320 | to do anything in order to receive this stream of payments. Be careful. This also has the
00:19:23.120 | potential to wreck your life. Most people are not going to live on Social Security payments.
00:19:28.800 | However, I do know somebody that's close to me in my life that I know that lives on a
00:19:34.920 | very small Social Security check. And as I said with the trust fund, I have watched this
00:19:42.080 | ruin their life. They basically have become a blob of a human being without purpose, without
00:19:48.240 | energy, just kind of whiling away the days, watching movies, doing nothing, wasting their
00:19:53.720 | life because of the benefit of this passive income. If I could go back and if I could
00:19:59.120 | wave – their life is not my business in terms of have control. So clearly, this is
00:20:04.680 | just a thought experiment. It's not my place to tell other people what to do in this way
00:20:08.440 | and to come in and control someone else's life. But if I – they're good. If I had
00:20:13.240 | the option of cutting it off, man, I would cut off their income in an instant because
00:20:17.720 | it's destroying their life. But Social Security is legitimately passive income.
00:20:26.840 | Social Security is an annuity stream. It's a stream of payments that comes in that will
00:20:33.360 | come in for your entire lifetime once you're receiving that payment. So it's an annuity
00:20:39.000 | stream which leads me to kind of the twin of – this category is called annuities.
00:20:44.920 | You can also set a passive income with an annuity stream of your own by buying a private
00:20:51.000 | annuity from an insurance company. If you have saved half a million dollars or a million
00:20:56.640 | dollars, you can take that money to an insurance company and you can say, "Here's my million
00:21:01.120 | dollars. Give me a check every single month for the rest of my life," and they will
00:21:05.240 | work out a contract with you where every single month for the rest of your life, a check will
00:21:11.160 | arrive in your mailbox or will show up automatically in your bank account. That is true passive
00:21:16.760 | income. Recognize again, it's a lot of work to earn and to save the million dollars. But
00:21:24.640 | that is legitimately, accurately, properly called passive income.
00:21:33.160 | Which leads me finally to category number three, dividends or income from large, well-managed,
00:21:41.640 | publicly traded companies or somewhat largish, well-managed private companies. The idea is
00:21:50.080 | if you can be a part owner of a business where you have no management responsibilities of
00:21:58.400 | any kind and if that company is well-managed, well-supervised by the board of directors,
00:22:05.280 | well-run by the executive team, if that company is well-managed and it's profitable, then
00:22:12.000 | they can cut you a check and send you your profits every quarter. That is true passive
00:22:17.880 | income. This is most easily done in the world of publicly traded companies. You can go and
00:22:24.120 | if you own enough shares of Coca-Cola stock, you'll get your dividends and you can set
00:22:27.640 | up your life to live on the dividends. That is legitimate passive income. You will do
00:22:34.320 | nothing for that money. Yes, you had to work and save the money, but you'll do nothing
00:22:39.960 | for it on an ongoing basis. You have no management responsibilities. You have no supervisory
00:22:44.400 | responsibilities of any kind. As long as that company is well-run, the board of directors
00:22:48.120 | does their job, you'll get your checks. Many people have become very wealthy and live very
00:22:55.040 | comfortable lives spending the dividends from their Coca-Cola stock or their Microsoft stock
00:23:00.600 | or their Disney stock or their whatever.
00:23:06.440 | Publicly traded companies are going to be simple because they're going to be overseen
00:23:10.680 | and simpler. They're going to be regulated by the public markets. They're going to have
00:23:14.520 | a high degree of scrutiny applied to them by the public markets. There's going to be
00:23:18.680 | an accountable board of directors, which are probably going to be professional and experienced,
00:23:23.600 | and there's going to be a well-run executive team. The pressure of the public markets is
00:23:29.960 | going to be good at keeping these companies working hard for your benefit.
00:23:35.920 | You can do this with private companies as well. There have been many people who've built
00:23:40.560 | up local companies, regional companies, all kinds of companies, and then sold them but
00:23:46.720 | retained a stake of ownership and/or kept them in the family but continue to receive
00:23:51.640 | – be in an ownership position. The challenge here is when you move into the private market,
00:23:57.200 | the company needs to have a certain amount of size in order for this truly to be the
00:24:01.200 | case. Recognize the fact that if you are – you have a plumbing company and there are 20
00:24:12.480 | plumbers that work for you, that's not passive income. You're running a plumbing company.
00:24:16.720 | That's different than owning shares of a company that makes plumbing parts and there
00:24:21.000 | are thousands of employees and you just sit back and collect the profits.
00:24:26.280 | But receiving dividends from a large publicly traded company is legitimate passive income.
00:24:32.400 | I want to lump in here other possible investment opportunities. For example, I have a friend
00:24:38.000 | of mine who's financially independent because of many shares of oil wells that his father
00:24:43.200 | purchased for them. He set it into a trust fund and his entire life he's received revenue
00:24:48.400 | from the payments, the profit from these oil wells. His dad worked in the oil business,
00:24:54.160 | systematically accumulated many, many interests in thousands and thousands of oil wells and
00:25:00.320 | my friend has received these payments for his entire lifetime.
00:25:06.200 | So there are other investment opportunities. I'm just going to lump them for sake of simplicity
00:25:10.040 | under publicly traded companies. But recognize that you could buy shares in a large publicly
00:25:14.120 | traded real estate investment trust or all kinds of different investment opportunities.
00:25:19.920 | These are passive income opportunities, legitimate. But almost everything else falls in under
00:25:30.120 | residual income.
00:25:34.160 | So I encourage you. It's awesome to work towards passive income. I think that – and
00:25:41.320 | by the way, if I'm missing something, I couldn't think of any more. But I don't
00:25:44.720 | deny that there might be something else. If you can think of another category of truly
00:25:48.560 | passive income and what I mean is you go off and you disappear to the mountains of Tibet
00:25:53.960 | to become Batman and 10 years later you come back, is your bank account much, much fatter
00:25:59.480 | than when you left? That's what I call passive income.
00:26:03.360 | So if you can think of something else that I'm missing, another category that I'm
00:26:05.880 | missing, you let me know. But the passive income is achievable. Most likely you're
00:26:12.720 | going to need to do a lot of work and a lot of saving to get there with the one exception
00:26:17.200 | of trust fund kid or I guess lottery winner would be another thing.
00:26:21.520 | But residual income is going to be a lot simpler. If you recognize the danger of passive income,
00:26:28.320 | now if you're a mature person of character, you've saved millions of dollars yourself,
00:26:33.280 | I don't think that earning passive income because you have dividends coming in from
00:26:37.360 | companies, that's not going to ruin your life because you've already built the character
00:26:41.920 | and the capacity to handle the wealth.
00:26:43.920 | You've demonstrated that you're the type of person who can save money because that's
00:26:46.960 | how you have the money to invest. And so in that case, you'll be busy doing something
00:26:50.640 | else, you'll be active in something else and the money is just a way of funding your
00:26:54.160 | life. That's different than if I die and my 21-year-old kid all of a sudden comes into
00:26:59.280 | possession of millions of dollars. That could ruin his life.
00:27:06.000 | Residual income is eminently achievable. Before you go off pursuing passive income,
00:27:14.120 | think for yourself if there's an opportunity for you to pursue residual income. There are
00:27:19.480 | a lot of things you could do. You could build a product that you can collect royalty payments
00:27:25.600 | from. Write a book, put it on the market. If it sells, you'll collect royalty payments
00:27:31.280 | possibly for the rest of your life. Create some kind of valuable intellectual property.
00:27:40.120 | Write a computer program that you can sell. Write a song that you can sell. Write poems.
00:27:44.800 | Do something. You can create intellectual property. You're putting in the work up front,
00:27:49.160 | you create intellectual property, you can receive a stream of royalty payments for the
00:27:51.960 | rest of your life. Residual income. Build a business of some kind and of some structure
00:28:01.240 | that's going to result in your receiving payments that aren't tied to your hourly wage and you
00:28:08.320 | will be in the world of residual income. This is well worth doing and this is probably going
00:28:14.360 | to be one of the quickest ways for you to move toward your financial independence.
00:28:20.680 | Passive income is not a complete myth because it does exist. But most of the things being
00:28:26.560 | marketed to you as passive income would be much more accurately called residual income.
00:28:33.000 | That's it for today's show. It's a brand new week. It's going to be a great week. I'm going
00:28:38.520 | to be here with you all week. Lots of things going on here around the Radical Personal
00:28:42.600 | Finance home office. Working hard here for you. A couple of things as we go. Thank you
00:28:48.640 | for those of you who have been sending in your emails with pictures and recordings for
00:28:52.480 | episode 500 coming up. If you have not done that yet, please do so. Take a moment, just
00:28:57.880 | pull out your cell phone and record a quick two to three minute voice memo for me telling
00:29:02.500 | me and the audience. I'm going to play it on the show. Telling me and the audience of
00:29:06.040 | the things that you have done since you started listening to Radical Personal Finance. I'm
00:29:10.040 | aware of many of you who have changed jobs. Some of you have started businesses. Some
00:29:13.840 | of you have closed businesses. Some of you have sold property, changed approaches. Tell
00:29:17.560 | the audience what you've done, what you've learned from the show and what you've done.
00:29:22.240 | Encourage your fellow listeners with the steps that you've taken. If you've gotten out of
00:29:25.520 | debt, great. If you've learned to invest better, great. If you've started on a new tack, let
00:29:29.960 | us know about it. Please take a moment, take out your phone today and record a quick two
00:29:34.080 | to three minute voicemail email to me at Joshua@radicalpersonalfinance.com. Joshua@radicalpersonalfinance.com.
00:29:41.120 | While you're at it, send me a recent family picture, you or your family. I'm making just
00:29:44.560 | a little screensaver for myself that runs in the background. That way I can, I like
00:29:48.360 | it when I record the show that I could sit here and look at your faces. Helps me to know
00:29:51.800 | who I'm talking to you, talking to.
00:29:53.840 | I think I have any other announcements. Patreon program. If you'd like to support the show,
00:30:01.440 | go to radicalpersonalfinance.com/patron. Time to support the show directly, radicalpersonalfinance.com/patron.
00:30:06.880 | Kick into my passive income fund. Hey, after all, someday you can do what I'm doing and
00:30:11.600 | you can get rich doing exactly what I'm doing. But first you've got to make me rich at radicalpersonalfinance.com/patron
00:30:18.120 | so in the future I can sell you a program on how you can get rich doing exactly what
00:30:21.240 | I'm doing. Happy Monday. I'll be back with you tomorrow morning.
00:30:37.640 | This show is part of the Radical Life Media network of podcasts and resources. Find out
00:30:43.440 | more at radicallifemedia.com.
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