I'm sitting here at a Starbucks in Terre Haute, Indiana. Definitely, a place that feels far from home in San Diego!
I was just having a little debate with my buddy Matt Wolfe (check out his blog, it's some of the best tactical advice/strategies you can get for free online).
We were sparked by this blog post. The post basically calls out people who start a business just to start a business. Not as a true expert, and they are leading with the intention of creating the elusive passive income achievement.
Tim Ferriss in his book, The 4-Hour Workweek, really brings in the operations and systems that go into a passive income type business. It's freaking genius and sexy, but it's deceiving.
The debate that Matt and I were having was is if passive income exists or not. I say it doesn't, he says it does.
There are a lot of types of businesses and investments that appear to be passive, so ultimately, it's what we as humans that love our comfort strive for. Some include a subscription membership business, owning properties and getting paid in rent, getting dividends and gains from the stock market, and then you have MLM businesses (ahem…).
If it's passive, it shouldn't demand your attention at all. For all of those things, you have to do your research, make an investment of time or money, keep up with whatever maintenance is required, scale, work, work, work. Definitely not passive, so I don't like to call it that.
For me personally, I don't like calling it passive because it gives me the wrong impression. Calling it so gives me the mindset of never thinking about it, yet still expecting the fruits of my labor to keep hitting my bank account. So, I need to trick myself and say that nothing is passive, so I can keep getting out of bed and being better than
I need to trick myself and say that nothing is passive. This allows me to stay hungry. So that I can keep getting out of bed and work my ass off to be better than I was yesterday, every morning.
At the end of the debate, Matt and I agreed that it really comes down to the definition of passive income. However you perceive and define it makes all the difference.
It's very smart to pursue this type of business, at least as a segment of your income. It can be extremely consistent, something that you can scale quickly, and a much higher value to a future buyer, if you choose to unload it.
The question for you is: How do you define this type of business for yourself?
Keep in mind that words and their meanings can make or break how you act, so be careful. That's why I don't take things like this lightly.