If you are one of those people who simply look at the title and pass your final judgement; then you have probably already come to think, “This guy has no idea what he’s talking about.” Some of you out of the enjoyment of good debates may have clicked on this blog to see if you can read through and then leave your argumentative comments. There is a chance however, that you are one of those people who are simply wanting to learn as much as you can, or you may simply be curious and want to read over a short blog that provides deeper thought, encouragement, or motivation.
Over the past week my head had the “thought seed” planted within it. “There is simply no such thing as passive income.” As many people across the globe begin to feel the impact of COVID-19; many turned to social media, the internet, books, podcasts, and youtube with a multitude of questions all revolving around income. Many people sought ways to improve their circumstances, whether in the short term or the long term.
As with my own situation; I found that the more I dove down the rabbit whole of searching and pondering. The search algorithms began putting it’s best recommendations forward in an attempt to continually capture my time and attention. Passive income was one that continued to drive forward. “Do this to get passive income!” “Click now to find out secrets to passive income growth!”, “Top 10 passive income growth ideas, or jobs”.
The simple fact is that passive income is not passive at all.
Proverbs 10:4 “Lazy people are soon poor; hard workers get rich.”
Proverbs 13:11 “Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows over time.”
The subject that is often left out of the concept of passive income is simply…. “taking action.” A future goal can only be achieved by one who takes action. Saving, investing, building a business, creating a wealth acquiring entity. Every single aspect all comes back to the fact that YOU need to take action and have the self-discipline to committing towards building a passive income opportunity.
I was the person under the impression and had placed the mental block within my head, “You don’t have enough money to invest.” “That is for people with degrees and business suits.”, “You think you are going to figure that out? That’s for smart people who have real money”. Why would I also want to save money off to the side, when I could simply just go out and enjoy the money I had at the moment?
I know that I am not the only person who has had this battle within their mind. Today, I see where my path is going. I can now see a bright future ahead, but can’t help to look backwards and wish that someone had taught me this information when I was young. How much of a difference it would have made when I was first starting out. Lets look at three examples.
Our first example shows us what will happen if we simply commit $10 a month, for 30 years, with a 6% compounding interest. We would get, $10,113.64 at the end of that 30 years.
$10! That’s it…. JUST $10!!! Think of what that is. That is 2 less coffee’s a month. Can you sacrifice just two coffees at your local coffee shop? Can you go without that extra fast food meal before you get home and have another meal? Do I really need both Hulu and Netflix at the same time?
Lets go to our second example. $50 a month, 30 years, and a 6% compound interest leaves us with a grand total of $50,568.18! If you dedicated yourself at 18 years old to putting $50 a month in to an account, by the time you’re 48 years old you’d have grown that account to over $50,000.
Let’s say you’re even more dedicated towards investing. $120 a month, over 30 years, with a 6% compound interest rate. You would have grown your account to a very nice, $121,363.63. The point I am hoping by now that is sinking in is that you may not be at a $120 month dedication, but can you at least be dedicated towards committing $10 to your future? $20? $50?. This is your future, and nothing is going to be passive about it. You have to be active. You have to actively commit towards your bright future.
Does that mean we simply throw our money in to investing blindly? Not at all, but what it means is that we need to be dedicated towards having the self-discipline of committing our efforts towards responsible spending, saving, and investing. Our future pleads with us to educate ourselves, and make wise choices rather than reacting off of the influence of someone telling us to invest blindly.
To give an example I see all too often on social media. The title flashing across the screen, “This dividend stock should be your next top stock!” I got sucked in, “Ok big guy on youtube! Yeah… what dividend stock do I need to have in my portfolio!? I like dividends! I want money.” We listen to someone on the internet that we’ve never met, but portrays themselves as “A really great guy.” They tell us of this awesome great opportunity stock that has major growth potential, and also gives out a great dividend we can all appreciate.
We don’t do our research we simply and blindly make a 100 share purchase at $46 a share. We’re getting a $1 dividend from every share we hold over the year. So every year we’re getting $100! “Alright boys, the big bucks are rolling in now! That youtube guy sure knows what he’s talking about.”
But what happens if that stock falls 5% that year after we purchase the stock? “Well, its only $43 and change! I’m still making GREAT money.” but that 5% drop happens again that next year, and the year after. If that stock falls 5% every year over the next five years we don’t make money. We loose money.
Now yes, you can hire a professional to oversee your “assets” your “investments”. But the power will always be in your hands, and the responsibility will always fall back on your shoulders for your future. Do not be afraid to start. You have the ability to learn, and continually educate yourself.
Now I don’t mean to end on some doom and gloom note. I simply want to end with an emphasis that passive income requires us to take action, be disciplined, gain wisdom and understanding. You can’t reap the rewards of passive income, if you never take the steps towards creating passive income.
Leaderistic 