On this episode of The Passive Income Attorney, Seth talks about what passive investing actually is. Seth offers his own definition of passive investing as well as telling you how can get started today. Enjoy!
“Consider living a life where you don’t have to worry about billing 2200 hours this year, or 200 hours this month. Living a life where it’s okay to step away for a two-hour lunch and have a glass of wine in the middle of the day, or take a weekday off to spend some quality time with your significant other or your children.”
0:00 – Intro
0:50 – There’s a lot of misunderstanding around passive investing
1:22 – Guru’s will talk about how you can get rich quick, but they sell you lies and dreams
2:14 – Others call passive income easy money or for lazy people, which isn’t true
2:38 – Passive income takes time
3:06 – Seth discusses some different definitions of passive investing
3:49 – Seth has come up with his own definition
4:18 – Most of us go to work, bill our hours and get a pay-check and if we don’t bill our hours we don’t get paid, AKA the rat race
4:47 – With passive income, if you put in time upfront you will get paid later, even after you stop putting time in
5:37 – Passive income can help build income while keeping the career you love
6:06 – Seth discusses the many other benefits of investing in passive income
6:31 – How do you get started? Step one is education
8:08 – The goal isn’t to tell you to quit your profession or to tell you you’ve got it wrong
8:38 – Consider a life where you don’t have to bill 200 hours this month
What’s up law nation. Good morning, good afternoon, and good evening my friends. Whenever you might be tuning in, I just want to say that I truly appreciate you guys spending a little bit of time with me today. We’re going to be talking about identifying exactly what is passive income as opposed to active income or what we make at our W2 jobs.
So, what is passive income? There’s a lot of misunderstandings out there about passive income and what it really is. And it starts with you. We’re attorneys and we’re doctors. We’re high-income earners. Why do we even need to worry about passive income? When we already have great jobs and make a really good living, practicing law and medicine and whatever else we might be doing. Now, let’s set the table by briefly going over what passive income is not. There’s a lot of gurus online. You’ve seen them, they conjure up thoughts of used car salesman.
Some of them are shown driving around in their rented Lamborghinis and Rolex’s. They talk about how you can get rich quick, overnight in your sleep simply by following their step-by-step system. And you can make millions and millions in passive income. Well, guess what? These guys are quacks. They make all their money from selling their quote-unquote secret sauce rather than actually making money from implementing the system that they’re selling themselves. They’re get rich, quick schemes, multilevel marketing companies, or anything of the sorts. You know, those types of things are not what we’re talking about on this podcast. And it’s not passive income. Some others call passive income, easy money or money for lazy people. It’s neither of those either. Passive income is not easy and it’s not for the lazy. It takes education and an upfront investment of work. It takes discipline to save your money and to invest it into passive income streams. Instead of buying the newest model five series.
Passive income is not fast. It takes time to earn money in your active career, and then it takes more time to put that money to work for you. Now, that being said, the faster you can earn and save money, the faster you can generate meaningful passive income, that will start creating more time freedom for you. So now that we’ve talked about what passive income is certainly not. What are we talking about? Lots of folks have different variations of what the definition of passive income is. Let’s start with Investopedia.
Investopedia defines passive income as earnings derived from a rental property limited partnership or other enterprise in which a person is not actively involved. Okay. All right. Popular money saving author and speaker Dave Ramsey defines passive income as money you earn in a way that requires little to no daily effort to maintain.
The website www.smartpassiveincome.com defines passive income as income generated from investing time upfront to reap benefits later. All right, well, I like that. Well, I formulated my own definition of passive income and it’s income generated disproportionately to the amount of time and effort required to generate it. So put another way. Passive income does not equal time and effort. Passive income is not trading time for money. It’s not one for one. It’s not tips for that, it’s two for one, three for one, four for one. This is not how most of us currently live our lives. We generally go to the office, put in our time, bill our hours, and then we get a paycheck or even a bonus based on those hours. If you build time, you get money. If you stop billing time, you don’t get money. This is better known as the rat race or the hamster wheel, something like that, something to do with rodents. As opposed to passive income, where you expend time and effort up front, and the income continues use thereafter.
If you stop extending time, you continue to get money. Some calls this mailbox money. Now passive income is often called the Holy grail of income streams. And it’s easy to understand why, if someone told you that you could put in some minimal effort upfront into something that would generate income for years after that, without having to do any more effort or having to put in any more effort or any more time, then I’d say you’d take them up on that opportunity in a heartbeat as compared to grinding away every single day trading hours for money and when the billable hour stop, so does the money train. Even if you love your career, I’m willing to bet dinner at capital Grill that you wouldn’t mind earning some extra income without the blood, sweat, and tears of another job or more billable hours. Building passive income can do that for you.
We’re talking about creating steady, consistent cash flow sources with as little active work as possible. We already have enough active work to deal with every single day in our legal and medical and professional careers. Not to mention all the other obligations we have to meet. Building passive income accelerate your wealth building plan. It insulates you from economic downturn, protects you from job loss and creates the opportunity for you to spend more time doing the things that you love with the people you love doing them with and ultimately retire early if you want to; not trading time for money.
So how do you get started? Well, you’re doing the first step right now. Step one is education. Right now, you’re educating yourself about passive income. You’re exposing yourself to new ideas and start thinking about what it can do for you, your family and your life.
Most attorneys and professionals are just so caught up in their careers that they don’t have the time or energy to even think about much else, but that’s not you. You’re going to put a little bit more effort. You are going to take the time to educate yourself and to start really investing in vehicles that are going to buy back your life and buy back your time. You understand that there’s a better way, less stress, more time, more freedom, more life.
The next step is to take action. And this is where people really get caught up. You need to run, don’t walk. Do what those nine to five, till 60 fivers won’t do, invest in passive income streams now so that you can reap the rewards later. In the upcoming episodes, I’ll be teaching you about the different types of passive income streams, including real estate, which is my favorite, but is in no way, the only way to create passive income streams. We’ll talk about what has worked for me and for others and what hasn’t and what actionable steps you can take to start building a great life instead of just making a good living.
The goal again is not to convince you to quit your law practice or your profession, or to convince you that you’ve got it all wrong. We’re a highly intelligent group of people. We have options. We have chosen pursue a law career or a different profession in, we should strive to be the best we can possibly be at what we do, if that is what we want to do. But just consider living a life where you don’t have to worry about billing 2200 hours this year or 200 hours this month. Living a life where it’s okay to step away for a two hour lunch and have a glass of wine in the middle of the day, or take a weekday off to spend some quality time with your significant other or your children. That’s what passive income can do for you and your family. This life is not just possible or even probable. It is certain. If you just make the commitment to yourself now to get into your discomfort zone and become intelligent, informed investor and take action, educate yourself and take action.
The goal of the show is to teach you how to, and to encourage you to invest in passive income streams so that you can practice when you want to, to give you the freedom to live your life on your own terms as an attorney by design. If you’ve already begun your journey, and you’re already a passive income attorney, I’d love for you to share your strategies and insights with our law nation. Hit me up and come on the podcast and share your story. If you want to become a passive income attorney and learn more about investing in alternative assets, then go to www.passiveincomeattorney.com right now, snag the free passive income guide and get started on your educational journey. This thing’s only going to be available for another few weeks. I can’t wait to talk to you guys on the next show. Please leave a five-star rating and a positive review. It really does mean the world to us and gets our show in front of more people so we can spread the good word. All right, kiddos until next time, enjoy the journey.