You have heard me or read constantly about passive income. When it comes to medical professionals, I bang on about it more.
Why?
Well, medical professionals are a bit unique. Their income can be directly related to how many hours they work.
In many ways, earning passive income is almost too good to be true.
Think about it. Are you earning money without having to work? Why on earth would you not want that?
Everyone wants it. It’s like not liking an Aston Martin. That’s illegal, by the way. I am not just saying that because I own one but simply because you must be a bit weird if you don’t. In the same way, if you do not like passive income, you are a bit weird.
But wanting passive income and achieving it are two different things.
Jump onto TikTok and Instagram; there are a lot of people who suggest you should do what they do. I am not sure what that is exactly, but it involves them receiving your money (and, for them, passive income) in exchange for exactly nothing. That leaves you a bit angry.
The problem is we live in an instant-everything society. That means we want passive income. When do we want it? We want it now! No one has patience these days.
And that pushes people to get rich, quick ideas. 99% of these do not work. In fact, your chance of success is the equivalent of using a band-aid to fix a nuclear power leak. So, my advice is to stay away from get-rich schemes.
In my experience the only way to generate passive income is to put savings into income-generating assets, such as stocks or real estate.
Yes, there are other ideas in this modern world of tech, such as dropshipping, starting an Amazon store, or writing an e-book, and they may sound great and exciting. My honest opinion?
Well, we have had a lot of clients who started doing this. We still have many new clients coming to us, thinking they have the next tech giant of an idea. The reality is that out of about 100 such businesses, only about 2 are still on our books. And if you think they are not working in the business, that is not true. Admittedly, it is not the insane long hours of other businesses, but they still put hours into their business.
So, although they might sound great, it is hard to generate cash flow from them.
I have been advising clients for 30 years. The advice has not changed in that time. So here is the secret – which, to be honest, is not a secret because those who have wealth and passive income have been doing this for centuries.
Take the extra money you’re not spending on purchases and put that money into an ‘asset’. Period. That’s it. Simple. Easy. Effective.
What is an asset? Well, I could write a chapter on this, and I have – but you must read my book to get the answer. But in essence, an asset is something that brings money to you.
A dividend-paying stock will slowly generate passive income for you. Investing in real estate will generate passive income after an initial learning curve and paying off debt.
But most people have high expectations, and these need to be managed. Any asset that generates a 10% return will be considered awesome. But that means a $1,000 investment would only yield $100 per year. You’re not going to get much for that.
And $100,000 would only result in $10,000, which is nice but not exactly world-changing.
And this is the problem because all those Tik Tok guys won’t tell you this because, quite frankly, you don’t want to hear it either.
One of the rules of investing is this. You don’t get rich by investing in cash flow. You must become rich and wealthy first, and this then gives you cash flow.
It’s a completely different thought process, and that is why many do not have passive income.
You get wealthy by investing. That investment starts to compound. That compounding effect gives you the potential to become rich, which then gives you cash flow.
Let’s say you invest $1,500 per month at a 7% return; you can end up with somewhere near $250,000 after ten years.
This is what I will call the “decade of sacrifice.” If you’re willing to cut spending and put money into investments year after year, you can eventually generate substantial passive income.
There’s another thing.
We are living longer. We are also a lot sicker. So, the chances are that we will live longer but sicker. And if that is the case, will we be able to work after the age of 65 or even 70 because that is what you will have to do if you do not have a second source of passive income?
In other words, you need assets that are paying for your lifestyle instead of just you working to pay for your lifestyle.
And to be quite honest, that is what being wealthy means.
Passive income is step 8 of our 9 steps to working less, earning more money and building wealth. If you want to know more, contact Hitesh at hitesh@medisuccess.com.au or call 1800 281 038.
