Is Passive Income a Myth? #353

in your life. Kind of sounds like a maybe a Pyramids game, and this is like, how can I automate money? I want money coming towards me with very little effort. And so don't we all? Yeah, And I'm glad that we're gonna We've dedicated an entire episode to talking about how passive income is a legit, a true, honest thing. Uh. And and in the ways where maybe it's it's a little more shady or that it's just not true exactly

to the way it's being marketed or sold to folks. Yeah, I think sometimes when we talk about passive income people, at least I think of like the leprechron and the pot of gold at the end of the rainbow. And that's kind of how the passive income conversation feels to me At times. I'm like, Okay, uh, this video or this this article is gonna teach me how to make passive income in just a few minutes. It's gonna be

it's gonna be so simple. And yet at the end of the day, there is no pot of goal to the end of the rainbow, and you're you're sold a Billy Goods that isn't actually true. So we're gonna try to kind of actually talk about what is true about passive income and what's not true, separate the myth from the reality here. That's right. Yeah, But first, dude, I wanted to talk about coffee. Uh. You know, and I've everybody who listens to the show knows that I like

Aldi did. We save so much money by getting our groceries there at Aldi Uh, And in particularly we've been fans of the whole being coffee that you can get there, uh, specifically the Peruvian blend. And of course, you know you and me are opposites. I get my coffee at Costco. That's right, Yeah, which is totally fine. But dude, lately, I feel like the Audi coffee hasn't been cutting it for me. Recently, Kate brought home a pound of some local coffee. Well it's sold locally, but it's like a

it's an ethiopium blend. Dude. It is so good, so much better than the cheaper stuff that I get at Aldi that I'm not sure that we're gonna be able to go back and continue buying the cheap oh Aldi beans. But the problem is is it cost more, and I don't know how. I don't know if our budget can absorb that increasing cost. Right, So Aldi, it's like four or five bucks for a pound? Uh, this new coffee cost ten bucks a pound them, I'm looking to double

the amount of money I'm spending on my coffee. How much? So the stuff you buy at costco, how much do you spend? I think, yeah, usually it's about a little over five bucks a pound. I think it's eleven dollars for a two pound back And you like it, right, I mean it's it works well for y'all. Yeah, it's good. I don't have like high falutant taste when it comes

to coffee. I like my coffee to be running the mill average, Like, I feel like that's what I've enjoyed up until now, but until I've had a taste of the good stuff. Once you taste it, yes, And now now that we've kind of gone back to our our standard all these stuff, I'm trying to decide whether or not it's worth it to me. And you know, this is one of those areas where I feel like, if I continue buying the cheap stuff, it's gonna feel cheap to me. And I can literally taste a huge difference

between the Audi stuff versus this nicer Ethiopian blend. Uh. And so I guess I'm mentioning it because I think we are going to just budget for it. We're gonna plan for it because this is something that Kate and I are both appreciating. It's something that we can tell the difference. We appreciate the nicer stuff, and honestly, in the end, you know, we're looking at increasing our coffee

budget by you know, five dollars a pound roughly. On one hand, it feels extravagant, but on the other hand, I'm like, Okay, come on, this is not a big deal. Leave it to money nerds like us right to to obsess over something so small. But I guess my question for you is is would you judge me for uh, for effectively doubling my coffee budget? Not at all? Actually, yeah, no, I think you're you should totally go for me. You

should spend a little bit more on this thing. And I think the coffee is one of those things that in your life literally every day of the year, and if you can thoroughly enjoy your cup of coffee versus just kind of mildly enjoying a cup of coffee in the morning, I think that extra what ten bucks a

month in your budget. I'm sure you can find a way to cut back ten bucks in some other in some other part of your budget in order to be able to pay for a nicer coffee, or find a way to earn ten extra dollars, you know, like giving a lift, ride or something to somebody. Yeah. I guess I wanted to share that because I want folks to know, in a sense, I want to give individuals out their permission to spend money towards the things that truly like bring you joy or or you know, bring you value.

But just know that you can't spend money on every single thing out there, Like you can't upgrade everything in your life. But in this case, I think we are going to spend a little bit more every month, all on coffee. Yeah. Sometimes ignorance is bliss when it comes to second Like if I wish I would have never had it, because I think I would have been totally fine with the Audi coffee. That's the way I feel

about the nicer new pizza joint. We've been, you know, hitting up sometimes these days, and I truly love it, Like it's delicious pizza. It's it's really expensive. And now when I go back to the other neighborhood joint, I'm like, it's it's good. It's it's fine. The inferior pizza. Yeah, but I would have thought that before it until I tasted the super good stuff. It's kind of one of those things that happens every once in a while and you have to put blinders on in order to stay

the course, exactly like a horse in a race. But but I hope you enjoy your new coffee, my friend. Thanks man. But let's move on mention the beer that we're having on this episode. The reason we have a beer every episode is because that is a place we choose to put our money on purpose. We like craft beer a whole lot. The beer that we're drinking on today's episode is called Radix. It's by Halfway Crooks, which is a brewery in our neighborhood that we absolutely love.

So looking forward to us to drinking this pilsner with you, man. Yeah, all right, well let's move on to the subject at hand. We are asking the question is passive income a myth on today's episode, and Matt, when we were kind of deciding how to tackle this topic, it made me think about relationships and I feel like, I don't know why passive incoming relationships. They don't necessarily go hand in hand. Yeah,

I was thinking more about like a love relationship. I feel like the messaging that we often get is that finding the right one is the hard part. Right once you find the right one and settle down, you're good to go and life is easy from there on out. Now that you've got that perfect partner, things are smooth for you in life. And when you find the person that you can truly be yourself with, it is a gift. Like I'm not trying to diminish true love I think. I think it's really good, and I am in love

with my wife and I'm thankful for our relationship. But still, even when you make a lifelong commitment to someone else that fits you like a glove, it really does still take a work to keep that leve alive and to stay deeply connected to one another. You know this, Matt, You've been married for what ye dude, it'll be fourteen this year. Nice, okay, And I feel like this is a great analogy for passive income because passive income sounds so easy and similar to, you know, a great relationship.

It's not that passive income isn't a great thing. It is, but passive income also takes work. So yeah, in this episode, we're going to try and give an accurate definition of what passive income looks like and then the best avenues for pursuing it, and maybe, just maybe along the way, Matt, you're gonna sprinkle in some relationship advice. I feel like you've probably got a lot to offer on that front. Well, yeah, I mean, relationships like passive income requires a little tender,

loving care, right, But I don't know. Yeah, I don't have any tips, I will say, Kate, and I started dating when I was a senior and she was a freshman in college. And so all I'm saying is like, use the strengths that you have going for you. So obviously like the older guys. So it worked out for me, and you know, when you know you found the right person, uh, stick with it like you did. Yeah, absolutely, man, I'm looking forward to I've already mentioned the ship before fifteen years.

Next year. I feel like that's gonna be a huge moustone. Not to discount fourteen, but yeah, you know, like in the same way that relationships, you know, continue to require that that input and that that attention. Almost all of the quote unquote passive income opportunities that we hear about these are maybe the ones you know, getting all the views on social media. They also require a meaningful degree of work. And so a better term I think to

use instead of passive income is probably leveraged income. You know, there are very few purely passive sources of income, and so that's why we are, you know, dispelling the myth that there's a source of passive income around every corner, right, Like, you aren't missing out on the passive income that everyone else is enjoying. Because it doesn't exist. There is that where you can go and sign up for for free money.

Most of these opportunities could probably be considered a side gig or even a part time job, or even though a full time job. We'll get to some of those scenarios later on in the episode. Yeah, I think sometimes when we're talking about passive income, there is that FOMO. People are like, I feel like everybody's like making this passive income, right, I see it out there online, where's

my passive income? And like the Golden ticket exactly. But a lot of what's considered passive income isn't necessarily passive. And I like what you said, Matt about leverage income. I think it's a better way to think about it. You know, we'll continue to use the phrase passive income in this episode, but leverage is really an important part of this equation. To gain passive in come, you're often putting in more time and effort now to reap greater

rewards later on in your financial life. But the reason people are so desirous of generating passive income streams is that it's better to have your money working for you than to have to work for your money decade after decade after decade, right, sometimes five decades of work, and at some point you want passive income to kind of

help carry some of that load. Making money while you're asleep sounds pretty phenomenal, But generating regular income that doesn't come via a paycheck from your employer takes intentionality, take sacrifice, and takes the ability to delay gratification. Yeah, it takes work, essentially,

is what you're saying. And sometimes the understanding that it takes effort to generate passive income that gets lost in the discussion about how to get there, to be able to make money without lifting a fingers and something that I've ever experienced, but often that is the passive income pitch that we hear. Even to make money, you know, based on what you know like that takes a lot of dedication and getting that knowledge just in the in the first place. You know, it takes quite a bit

of time to see any meaningful passive income. You're not gonna build three passive income streams, you know, just in the course of a few days. Even just amassing the knowledge to know which route to take like that alone can require a ton of reading, a ton of information gathering, and implementation of that knowledge doesn't happen quickly either. Yeah. So you mentioned that it takes time to see meaningful

passive income. It's not something that's done quickly, which is true and also to it takes trial and error on that front to see which passive income routes work well for you. You You might think that one route is gonna make sense, and you might decide that's actually not in my wheelhouse. I need to check something else out. It also takes money to build up any sort of passive income stream. All of the different passive income streams that we're going to discuss today take varying amounts of money

to get into. So, like the down payment on your first rental property, well that requires quite a bit of cash. Starting a blog though, isn't gonna take nearly as much money to get going, of course, But to start earning income that flows while you sleep, it often takes money in addition to hard work. Uh. It takes a little bit of both, sometimes a lot of both, right, yeah, yeah, And different sources of passive income are going to have

varying degrees of time and work involved. Right. At a very elementary level, passive income can literally, you know, be as simple as having money and a savings account and earning interest, although that's not gonna earn you much, especially these days. Yeah exactly, But that method could you know, just take a few bucks and virtually none of your time.

It's super simple, super easy. Uh. Or on the other hand, passive income could be as complex as building this massive business with you know, hundreds of employees that you eventually are able to step away from. This is an example of form of passive income that's going to take a lot of time and a lot of money. And of course, you know, there are different approaches to passive income all

along the way in between those two extremes. And so we're gonna cover some different methods of passive income, uh that that are going to kind of run the gamut between those two extremes. Yeah, so let's start kind of maybe on the easy end of the spectrum, and let's sit the easy button. Sorry about one of the simplest ways to make passive income. And I'm gonna this one. I'm gonna met this first one that we're gonna throw

out there. It's a little bit random. It's it's not one that you're gonna see touted in most of the YouTube videos. But yeah, one way that you could make money, it's just using an asset that you already have, and you can generate passive income by doing the actions that you're already doing, but doing them in a different way. And wrapping your car in an advertisement is actually the

easiest way, I would say to do that. It's actually something matth that I have done before personally done this, right, It's the easiest way I've ever made money doing the thing I was already doing. Right, so I had to have the car. It's just slightly embarrassing to your wife, So yeah, to my wife, not to me. I didn't care, but some people would be more embarrassed than others about it.

I have no sense of shame. Um, But yeah, I already had the car and I was driving it already to work on some days and around town on other days, and so making money without having to really change up anything in my daily routine was pretty nice. Um. It's

a chill way to make some extra dough. And the company I went through was called Rapifi and they're still around And and I will say too, there are lots of scams when it comes to car wrapping, so you want to be careful which company you go with, but Rapi Fi will link to it in the show notes is a legit one could be a good way for a lot of people to make hundreds of extra dollars every month um literally by driving the miles they were already driving. So that's a cool way of making passive

income without having to put in too much effort. Also to running out that car that you aren't using is another way to score a bit of passive income in your life. Cars are idle, Matt somewhere close to of the time, especially these days if we're working from home, A lot of us have been using our cars way less than we used to, and so why not turn that car that sending their idol into some passive income.

And you can do that out of sight like Toro, where you can rent out your own car for other people to use um and you can make some decent money doing that. That's right, Yeah, that's super easy. Although

I guess there's a difference between Rapifi and Turro. Right with Touro, it does take a little more managing, you know of your vehicle and making sure it's maintained, make sure it's in the right place at the right time right, responding to people who are trying to pook Yeah, exactly, whereas like truly rapidfy, I mean, you didn't change anything about about what you're doing except for having to go and get it wrapped and then taking it back there

once the campaign was over, exactly. But yeah, similar to touro or you're renting out your vehicle that you already owned. Baby equip is another example of this. Uh and you know that we've mentioned this on the show before, but you can make money by renting out baby equipment that you already own that you aren't using. So if you've got like that extra uh pack and play sitting there

in the closet, why not put it to use? So using assets that you already own more efficiently, that can be a really easy way to kind of generate some passive income. But we're gonna talk about the pros and cons of other passive income methods, ones that have the potential to generate way more money, and we'll get to

those right after this break. All right, we'll back. We're gonna keep talking to you about passive income, and it's our goal to point you in the right direction for how you can make money on your money, or on the items you already have, or with the skills that you already have, without selling you a bill of goods that isn't actually real. Um. And so, Matt, let's talk

about probably our favorite method of passive income. Investing in the market is is one of the best ways for anyone to get started building up an eventual source of

passive income in their lives. That's what saving for retirement's all about, right, saving in your four oh one gay, your four oh three B or your I ra A. You know, some folks attempt to take a more active role when it comes to investing, picking individual stacks, making frequent trades, But that's really the opposite of passive income.

That sounds like work. That sounds like you're having to figure out which company you think is going to perform well over the next six months, year, two years and allocate your investments accordingly. But you know, you and I we actually pursue the truly passive dollar cost averaging ironhold strategy that truly takes almost zero mental bandwidth, Like the time that it takes for us to invest is almost nothing. And I do appreciate that about investing in the market.

But even if you're all about finding multiple ways to pursue passive income, like you want to get involved in some of the other things we're gonna talk about on this episode today, investing in the market is one route that we believe that basically everyone should be participating in. It's one of the simplest methods to building a passive income stream that will fund decades of your future expenses later in life. Even if you start with just a

really small portion of your income going in that direction. Um, it doesn't take a whole lot of cash, but those little amounts of cash over a large number of years are going to have just this incredible impact and your ability to have passive income in your later years in life. Yeah, that's true. Yeah, investing your money in the market, it's it's really the only way to have a truly passive source of income. But you know, it does require a lot of money in order to eventually and rate enough

money uh in interest to live on. Right. So, for example, if you have the typical expenses of an average American, that means you have around sixty in expenses, right, and using some quick math, we know that by multiplying that amount by twenty five you'll have a good idea of how much you'll need to have invested in order to live off that nest egg. And so in this example, if you multiply twenty five by sixty thousand, that leads to one point five million dollars. That is a lot

of money. So that sounds daunting, it is, dude, Yeah, But and that's why it often takes an entire working career in order to have enough saved to become financially independent. But it is easy and that it doesn't take much research, index fence, that's all you need to know. But it

does take a long time to get there. But because it doesn't require much money upfront, and it's something that you can easily get into and it doesn't require that specialized knowledge or time, it's something that everybody can take part in. Yeah, So investing in the market is almost like rapid Fi level, almost car wrapping level. Simple. Uh. It just takes the mone and the dedication to continue

putting that money in consistently. All right, let's talk about some other ways math that people can make passive income in their lives. One of the ways that's often touted is affiliate marketing. It's supposed to be a fairly easy method,

pretty huge online. You hear people talking about it. Yeah, they're they're like, hey, start a blog and pop in some affiliate links and you're you're start developing passive income in no time like overnight, right and um, and so yeah, I think this is one of the things maybe that's overpromised and anybody that's actually tried doing this realizes that it's much harder than it seems. Right. The way this works is is that businesses will pay you a commission

for sending customers their way. A lot of different sites rely on affiliate marketing, like they're getting sales when bloggers linked to them, and then you know, readers click through to make a purchase. And while this is a legit way to make money starting a blog finding your tribe of readers, you you can't have enough readers to actually make it make it worthwhile to actually get click throughs

and and they see sales. Yeah, if it's just your mom click through, that's not going to generate a nothing. That passive income might be like a dollar, you know, and that's not gonna that's not gonna do it for you. Say, hey, honey, let me just take you out to lunch, Like, I'm not gonna click the link. That's not even cover the hosting fees, right, So yeah, not not worthwhile. But yeah, it's it's just not as easy as it sounds and as easy as some of the folks on YouTube make

it sound. So yeah, generating income online is much more complex and competition for page views is stiff online. You really have to learn a lot, develop a good niche online, and then be able to actually attract the readers that are going to be able to support your endeavor. You say niche, I say niche. I don't know which one. I think, I go back and forth. Well, let's talk about writing a book, right, because self publishing a book

is often another way to pursue passive income. And many times that blog and we just talked about that is used as a way to market that book. But just remember that getting the knowledge actively writing the book, marketing, touring interviews associated with promoting your book. I don't know about you, but this all sounds like a lot of work to This does not sound like massive income. Does not sound like you're just kicking back in a hammock

after having like come up with a good idea. And so you know, while it may not require a lot of money in order to publish a book or to get your blog going, it does take a fair amount of time on the front end in order to start realizing some of that income. Yeah, ask anybody who's ever self published a book. I've never heard anyone say that was simple, that was easy. And I crushed it. Like,

it's not that you can't make money publishing a book. Um, it's just that it's not really a former passive income in our minds. Is it really truly is a form of work, And it's a form of like what we talked about earlier, leveraged work. Sometimes you can write a book and it can sell for years to come. You can make money for a long time on that book in all likelihood, though for most people, it's just not

a lot of money that they're gonna be making. Um. And and Matt, let's talk about podcast here for a second. Let's get a little metal with it. That's another thing that people point to these days as a way to make passive income. Yeah, they're like, Joel, Matt do it. Why can't I It's so simple? And they just keep back in their hammocks and so yeah, they're just sitting

there rinking beer. I will be honest, if we can do it, then other people definitely can do it, because we're not the smartest guys in the world, or maybe even in this room. There's not other people in this room, so I know there's nobody watching us. But it takes work, and that's what we're that's what we're talking about here, right. But obviously podcast super popular these days, and a lot of people are churning out new shows like There's No Tomorrow.

The amount of new podcasts on the scene has skyrocketed over the past few years. But just because you get an idea for a show doesn't mean that you'll be able to generate any income from it. Right. We just saw a recent stat Matt of the two million podcasts that are available to listen to m via Apple Podcasts. And then you know, through all the other podcastchers, accordingly they only have a single episode, so one episode, one episode, and then there's a huge percentage that have fewer than

ten episodes. So there's a lot of people that give it a shot, that put out a few episodes and try to see what sticks, but they don't find much traction in the beginning, and so they quit pretty quickly. So that's a really high number of folks who don't keep it up after they get started. And it's obviously a relatively cheap medium to get into. It's not that expensive to start a podcast, and I think we've talked about on the show. We literally have four dollars worth

of equipment. The hosting when we initially started out was like ten dollars a month. I think it was free for the first three free, yeah, because we didn't have enough we didn't have enough content yeah, or listeners and so um. Yeah, and we still use the same equipment

that we use back then exactly. Granted the room is different than we you know, we have soundproofing and you know, ways to acoustically treat the space, but literally we are using the same microphones and the same little zoom recorder right here. That's true. It's kind of ridiculous. So yeah, obviously, yeah, people might hear that and be like, Okay, cool, it's a few hundred bucks. I can get into it and

start making money to overhead. But podcasts similar to you know, affiliate marketing with a blog or writing a book, It takes a lot of work to create something that people actually want to listen to and to reach the audience that you're trying to reach. Yeah, and of course, you know, the way that we generate income from the from the podcast are from the ads that you hear. But even with a super small listener base, it's it's not possible

to make money. Uh. And you can do that via platforms like Anchor, like literally on their website and with this down it says that you can quote unquote create, distribute, and monetize your podcast all for free. Uh. Like it's crazy like it they almost make it sound like like because it says all for free. I think the trick is that they make you think that, oh, that first part even creating it, like that's gonna be free. Like it's almost like it's automatic. But no, like it does

take hard work. Uh. And in addition to that, you know, some shows have gone the route of getting like support directly from listeners via sites like you know, Patreon. But again it's important to note that, you know, putting out great content consistently it's not easy, and it's hard to consider this business model as passive income. You know, it's it's it's literally our job. It's what we do. It's not something that we're uh, you know, doing without hardly

even thinking about it. True, podcasting for us takes a lot of thought, uh and a lot of time. But let's talk about another another way that you could potentially make some passive income online and and maybe let's see

if this one is a little bit better. Similar to running aside or a blog or self publishing a book or a podcast, there are plenty of other platforms out there that allow for you to create a course online that you can sell, and platforms like you to Me and Coursera are specifically there for you to be able to upload some of those courses and make some side money. You upload that course once and hopefully those residual passive income dollars just keep flowing your way. Right. Let me

see those royalties. Yeah, royalties sounds so nice because it's royalty. It's like it makes you think that like, oh no, that's just money, that's that's that's not that's nothing beyond just money. But because it's called royalties, it has this appeal. It makes me feel like I'm a king or something. Yeah, exactly, at least the prints. Yeah, it makes me want to write some sort of like hit pops on or something like that for Taylor Swift and then you know, collect

some of those royal royalties. But you should, Okay, I can see her performing a something that you wrote. I've never written a song before, but maybe I'll give it a go. See if I can get that passive income from royalties. But let's get back to online courses and and it is fascinating to see people who are able to monetize their unique wisdom, insight, their personality, or or

even their basic but practical knowledge. We all have access to so much incredible knowledge these days that we previously couldn't access without paying money to go to college or spending years getting advanced degrees. And online courses have made that more of a reality. Like what we can learn now for free is just incredible. But people are getting paid in order to disseminate that information. And so yeah, it's cool to see that some people are making passive

age in that way. And I mean, it's no wonder that folks are willing to pay for that because you get to learn about something completely niche, like I like to say niche for very little money. Who wouldn't spend five or twenty bucks to learn how to do something completely unique. I still want to take that Aaron Franklin barbecue masterclass that's gonna happen. One of these masterclass that's a bit more. That does cost a little more. We have to go in and split that one, buddy. Uh Yeah.

And you know, when it comes online courses, the argument goes something like that of writing your own book. Right, Just figure out what you want to teach or what it is that you want to menicates others once and then you can kick back while the profits start showing up, the royalties, the royalties. It feels that easy. Then everybody would be doing it. And so you realize that it could take years of work, years of research and planning before you're able to have a product that the folks

are going to be willing to pay for. Uh. And so you know, while these knowledge based methods of passive income don't require much money to to get things off the ground, they're gonna take a lot more time and

energy before they can be considered passive income. It's making me realize to Jil, like, I mean, all of these things that we've that we're talking about here are different platforms that are that have very low bars of entry, right that they make it really convenient for you to get plugged in and you're trying the thing out, but they don't do the work for you. They make getting started easy, but they don't necessarily make being successful easy, like you still have to put in the hard work.

They get their foot in the door, and then the rest it's still up to you. And I think that's why, for instance, with podcast low barrier to entry, you're gonna see a lot of podcasts that have only one episode. They're gonna be a lot to people who are who have an account on Uber because they tried out being a driver once. It's very easy to try it out once, but beyond that, it's up to you to follow through

and to put in that hard work. Yeah. Man, I love what you said to about how it might take years to become viable and to to make one of these products sticky to where you can actually make money

from it, And I think that's true. I think there's a big learning curve to a lot of these platforms, even though they are uh super simple to get started, Like what you put together, what you package, what you offer to the world, that's the thing that takes time to craft um and to grow your knowledge base to where people actually want to tune in and check out

what you're putting out there into the world. So, of all the ones we've covered so far, investing in the stock market is the easiest route passive income, although it takes a while. But there are other ways, including we've got to talk about real estate, Matt, because that is one of the most effective routes to building up passive income. We'll get to that and more right after this break. All right, we are back from the break in Joel up until now. You know, the examples that we've covered

are are pretty easy to get started. They mostly require a little bit of money, uh and a good amount of work, you know, and luckily a lot of those platforms make it easier to get kind of get plugged in and to get started. But let's cran things up a little bit. If you're really looking to increase your your income, specifically your passive income, getting into rental real estate is an example that will take quite a bit

of upfront work. A right, like every real estate investor I know makes a good rookie mistake here there or even twenty or so. We've all anybody who's gotten into real estate has made some mistakes, and they cost you money and time and a lot of like some headache care polling. Yeah, but eventually, right, over time, rental properties can become one of the best ways to earn residual, mostly passive income. Uh. I know, I'm happy with my

I really rates as a real estate investor in particular. Though, to make real estate truly passive over time involves acquiring a handful of properties and getting to the point where you can turn them over to a property management company. That at that point is when it becomes purely passive. Yeah, you, you and I were uh, mom and populand lords, and we still manage our own properties and so there is

work involved when it comes to that. Um, But I will say it is more passive if we're talking about a scale of passivity, which which you kind of mentioned at the beginning of the episode. It is more passive than almost any other way that I make money at this as some time, besides the stock market. And so I think real estate is a good way to make

passive income over time. But like you said, yeah, the way to make it the most passive is to have somebody else manage that property for you that eats into the profits. Though that's right well, and like you said, though you say anytime you say mom and populand lords or real estate investors, it makes me think of like an old farmer, like pulling up to the house with like a straw hat, and like old be a pickup truck.

I like to I don't know, I don't know why it makes me think that, but I like to have my corn cob pipe in my mouth when I, you know, run by my my property to check it out. Neither you or I have pickup trucks. I'll say that true. I thought it love to have, like it's just an old, small like little Toyota pickup truck just to be able to throw stuff in the back. Dude, I would love that.

They're very sweet, dude. I kind of still want a Ribbian electric pickup truck one of these days, like the opposite a small telling the pickup truck you want, like like literally the fanciest most expensive one they make that are also the sweetest looking trucks cyber truck and eat it. Yeah, so maybe maybe, like maybe ten years from now, I'll be able to afford one of those. Uh yeah, so so getting into real estate is also difficult though, because

it typically requires a pretty large sum of cash. That you need is a down payment, right, So there's more of a barrier to entry for that because it can take years to save up that down payment in order to buy your first rental property. There are other ways to go about it, you know, Matt, We've talked about this before. Living in a property and then buying another property to living and then running out that first house makes it a little bit easier at least. Um, but yeah,

that's something that you need to consider. It takes sacrifice, right as you cut back and work to save up enough money to buy that first house though. Um. That's part of the reason I think why a lot of people look to Airbnb is an easier method to trying out rental properties, and it definitely can be a great

way to get a taste. But when you decide to rent out a room in your home or even buy another place to list on Airbnb, it's it's more of a hospitality play than just a purely real estate investing play. Your part real estate investor and part hotel manager. When you start hosting on Airbnb. Uh. That being said, there are systems that you can put in place that can

make your Airbnb listings function more like passive income. And we talked about that more on episode to fifty three with Ziona McIntyre who has literally made her living owning properties and running them out on Airbnb, helping other people do the same thing. It's amazing it's what she does now. Yeah, she she's turned it into a career. But I will say, yeah, a lot of that income is passive, but some of

that income is very active on her part. But Airbnb is definitely something that's worthwhile to consider, um, if you're looking to generate more passive income in your life and to use again, like we talked about earlier, some of the asset so you already have on hand. If you have a house and you have a room that you could run out, or you have a basement that you could outfit, make it a little bit nice and rent that out on a nightly basis, you can make some

real returns doing that. That's right man. Yeah. And so as we kind of graduate to two higher levels of difficulty and let's talk about, uh, starting your own business. That's the starting your own business is probably gonna be the most difficult way to generate passive income. You know, it's often going to be the most risky, as creating your own thing from scratch will will require the most time and the most money, but it also has the

upside to potentially generating the most income. And you know, I think that's also a fair trade. You know, like there's actually no risk involved, say with earning interest from your money, uh in the savings account, but there's also virtually no reward. It's appropriate that those who are committing the most time and the most money towards something that isn't necessarily proven, that they have the potential to realize that the biggest profits the biggest rewards. Yeah, we have

talked about that. There are ways to start your own business with even money. But still you're gonna require a ton of time to start any business that you're looking to launch. But for a lot of businesses, we're talking about both. And like, while we don't see owning your own business as a way to earn passive income because like we said, it's going to take a lot of energy on your part, it is a method to generate income by trading time for money, which is what a lot of us have to do for a lot of

our lives. But if we do it well with good planning, you can eventually step back from the day to day operations of that business and you can turn it into an avenue that produces income without you having to commit to working on that business every day. Right, and maybe even depending on what kind of business you you you start, you can potentially even sell that business someday in the future, or sell part of the ownership, or hire someone to do the day to day managing while you take more

of a backseat role. I mean, they're they're all these ways when you start a business that you can use it to generate income for a whole lot of years and then find ways to kind of pull back in order to make that business income a little more passive than active man. It makes me think of a friend I have much older friend, and he had his own business that he ran four years. He and his wife and they cleaned houses and they did great work. They built up a large list of clients in the town

where that they served. But eventually he wanted to retire. And it's not that that business had to fold, just go away completely. He not only made money for all of those years running that business, but that business was worth a lot at the end of the day, and so he was able to sell that business to someone else. And that points a finger to the fact that you can eventually, uh score passive income based on the business you built, and at the same time doesn't have to

be a super sexy tech startup. You can something you know, where you're just offering a service to folks. Uh did

one other thing? You know. One of the myths about passive income I think is that if you get your fingers in enough money making ventures that you'll essentially be getting paid in enough different ways that if one of your businesses maybe isn't doing so hot, you're still gonna do okay financially, right, But often times I think you might be spreading yourself too thin and you won't make enough money if you're kind of going this, you know,

jack of all trades route to generating multiple streams of income. Not being said, there's nothing wrong with trying out some different approaches and seeing what works for you, but you know, just don't forego diving deep. Uh when when times get a little rough, You know, when you don't immediately start making money, don't immediately try to hit the easy button and kind of switch over to the next opportunity where you think it's going to be easier. Uh, it does

require work. And again, this is one of the reasons that I feel like the platforms, the different apps, the different you know sites where you can log on, create an account, offer a course, or start publishing a podcast. I feel like that they almost do a disservice to people digging in deep to whatever it is that they're are are pursuing, almost as if they're making it too easy for folks to try things out and they kind

of give up maybe a little too easily. I like it because it gives a lot of folks a taste of it. But at the same time, it's sort of I almost see it as a negative because it's kind of like, well that didn't work out, Well, this didn't work out, and it's sort of I don't know. It creates this perpetual like hopping from one thing to the other and in search of a golden goose, something that's

going to be able to significantly provide them with some income. Yeah, if you just create one podcast episode, throw it up there and you hope to see that the passive income rolling in. That's just not how it works, right, that that that is truly the myth behind passive income. It really does take a lot of work. So so you really have to go into your pursuit of passive income with eyes wide open, knowing that it will take real effort to establish something that you can benefit from for

years to come. It's the opposite of striking it rich quick. Ultimately, the truth about passive income is that it's never passive except for investing in the markets regularly vi your paycheck or a h from your bank account to an I ra A. But it is possible to work harder now in order to gain and share your knowledge with others by creating content that they're willing to pay for, or to study your local real estate market and save up enough to purchase that first rental property, or even to

identify a need in the market where you can step in and fill the gap with your service or product. With the business that you create, money will always flow to creative problem solvers, So leverage your hard work now and it will pay dividends as steady income for years to come. And that we would say is worth pursuing. That's where the reality of passive income can actually be realized in all of our lives. Right, I think we need to maybe avoid some of the clickbait headlines and

videos that we see and realize the passive income. It's not a myth, um, but it is much harder to achieve than a lot of people out there want you to think that it is. Century dude, all right, let's shift gears. Let's get back to our beer. On this episode, you and I we enjoyed. We each enjoyed a Radix, which is a German style pilsner from the folks over at Halfway Crooks here in Atlanta. Uh, dude, what were your thoughts on this? Speer? So, I always thought that

I didn't really like pilsners very much. I think it was because the only pilsners I've ever had in my life were the giant Macrobe right, Like, had my fair share of high LIFs and PBRs back in the day. Um and and yeah they were fine, Like I didn't mind drinking them at a at a show, you know, at a concert. They were fine for the times. Yeah, but I didn't realize that I actually like Pilsner's a craft pilsner can actually be really tasty and halfway Crooks

did an awesome job on this one. It's super clean, super delicious. This is actually the exact kind of beer I want. Well, I'm sitting on my porch on a fine summer sank. Oh yeah, dude. Yeah. As we poured it, it's a It's got a nice golden color to it with a nice fluffy head, which kind of gets me

to the flavor. I feel like it almost drinks like a like a kind of fluff like biscuity, kind of like flavor profile going on, really delicious, while at the same time, though, because it is kind of a local craft brewery who's making this, it doesn't have that metallicky, just old stinky pilsner flavor that we associate with. Is

the exact best way to put it. Yeah, with with like the macro beers, like you can expect that at this one doesn't have that, and this one, like it's to those biscuity flavors going on, but at the same time it's still really fresh and kind of kind of green tasting. I'm glad you and I got to enjoy one of these today and dude, that's gonna be it for this episode. Listeners can find our show notes up on our website at how to money dot com. Will make sure to link to any of the previous episodes

we've referenced or any of the resources as well. Again, if you're new around these parts, don't forget to hit the subscribe button so you get notified of each episode that we release. We release Monday, Wednesdays and Friday's and we'd love to have you on board as a part of the how to Money community. So all right, Matt, that's gonna do it for this episode. Until next time, best Friends Out, Best Friends Out.