Why I'm Done With Passive Income

Why I'm not focusing on passive income anymore, and what I am focused on instead.

Ryan Pineda

September 28, 2021

Everybody talks about cash flow. It's what everybody's striving for. But what if I told you, I'm not really pursuing that and I believe you shouldn't be pursuing it either. The truth is you need to change your mindset when it comes to cash flow. So, first off let's go over the biggest lies that people believe when it comes to cash flow. 

The biggest thing people think is that it's truly passive. 

As somebody who's pursued every type of passive income or passive investment, I know they require some form of maintenance. For instance, if you own rental properties, then you know, they're the furthest thing from being truly passive. You're always going to have tenants who are moving in and out. You're going to have different types of repairs that need to be made throughout the life of the property. If you've owned rental properties during the pandemic, then you know, you've had to deal with all these government regulations and how to proceed if someone's not paying rent.

Now I'm not here to say rental properties are bad or that they can't make you wealthy. But what I am saying is this truly passive income or this cashflow that you're seeking, isn't as passive as you think. That includes even if you have a property manager and delegate everything. I have property managers for my entire rental portfolio, and I still have to make decisions on what to do with these properties or how we're going to proceed whenever an issue arises.

Another passive income myth is with businesses. 

I spend 35 hours a week running seven different businesses, which is extremely good and better than 99% of people. All of those businesses still require me to make very important decisions and to do some type of work. If I were to stop doing work completely, they would not do as well. Even when you make it to the owner's box of a business, there are still so many decisions to make. One of my biggest dreams in life is to one day own a sports team. You would think being the owner of a sports team is really cool. You're going to make a lot of money from it. You're going to get to go to games and hang out. It's super prestigious, but you forget as the owner, you have to spend a lot of time hiring all the top level people below you. You've got to hire the presidents, the GMs, the coaches, all of those things. Then you have to make big decisions on which players you want to give big contracts. My point is no business, even at the highest level of ownership is truly passive. 

One of my other big dreams is that I one day want to make so much money that I become an investor, for other real estate investors.

I want to let them find the deals, then do all the work. Then I just collect interest or profits split. Even with that, I still have to do a lot of work. I have to find the right real estate investors that I trust and make sure that they're going to do a good job holding my money. I've also got to underwrite the deals myself and make sure that they're not making a mistake. If things ever do hit the fan, I've got to take ownership and foreclose on them. So even though lending seems very passive on paper, there is still a bit of work to do. 

The last myth I want to bring up is investing in stocks, crypto, or even an IRA.

Now, a lot of people think you can just throw your money in any of these things and in the long run, they will perform and make you money. This is partially true, but they're going to require you to put in a lot of work. You've got to research what stock you want to invest in or what crypto. You've also got to decide if and when you want to sell them and you need to be able to handle the stress of the market going like this on a day-to-day basis, especially if you're going with crypto. 

My point is no matter what vehicle you use to create cash flow, it's never going to be truly passive. There's always going to be some level of maintenance and stress. That's going to be required of you for that investment. 

So you might be asking, why am I not going for cashflow anymore? Well, the truth is after pursuing all those different myths that I talked about before, I've realized there's always going to be some level of me involved.

The real key is figuring out how I can be involved for the least amount of time as possible, but make the most money. I believe now that in order to achieve this, it's not about looking for the next great opportunity, but it's about finding the right people. 

My whole point is if you're going to pursue passive income through owning a business, my advice is to partner up with somebody who can do it for you. The same thing applies to stocks and funds instead of researching what stock that you should buy. I suggest researching what person you want to pick to buy your stocks for you. Most likely they've done way more research and know way more about stocks than you do. So instead of trying to be an expert, picker yourself, focus your energy on finding the expert picker.

So my strategy going forward is in everything that I do, I want to search for the who, not how. That’s what you should focus on. 

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