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How passive income works?

How Passive Income Works?

This video from Gary Vee really resonate well with me. I truly love the authenticity of Gary Vee. And this reminds me of my naivety of my younger days.

Now, here are the key take away from the video

I’ve heard so much about passive income. Heck, I was one of those who joined a multilevel marketing (MLM) chasing the ‘dream’. Never make the millions I’d promised. Almost expelled from my university by doing so.

Lucky me. Lucky me that I was one of the best student, even the experience did dent my CGPA, but alhamdullillah I’ve managed to turn it around. My mentor during the troubled time describe me as a ‘sleeping genius’. Even though I didn’t make much money from the experience, I did learn a few skills and conquered my shyness. So,its not all bad. There always lessons to be learned.

Now, Gary suggest that 97% of passive income come from the d#uchiest, shitt*est thing on Earth. And I agreed with this. Most of the strategy of MLM agents was to present their success with big expensive cars. Now know this, those expensive cars aren’t actually that expensive. Plus, you can rent those cars. So, remember that, not everything are as it seems. Open your eyes. Never accept anything at face value.

3% of those so called passive income are actually the tried and true thing. But there’s no such thing as not having to work. But rather, we need to feel that we like to work. I believe that’s the goal. If you love your work, you just having fun without the burden and stress that come with typical job.

Bad Mindset

The idea of not having to work is the main reason why most people won’t be able to make passive income.

How Passive Income works?

Now, Gary said passive income looks like this.

You take money that you can afford to go to zero (liabilities) and you put them into 2 places that historically created passive incomes (tried and tested).

Those 2 places are

  1. Public market – but remember, Warren Buffet said,”never buy stock you won’t want to keep for 10 years” or simply remember to buy value.
  2. Real estate – for real estate, I personally would try to buy real estate with cash. But if would take a long time to break even with your initial investment through renting it. But the appreciation of real estate value would be around 10-15% per year. So, on paper, your net worth would continue to rise.

But both would presents it own risk. I had friends who lost money on real estate investment whereby he sold his property with 20% loss. So, be wary of the path who chosen. Embrace the experience but it would be wise to learn more from the experience of others.

And if you see some gurus that are selling these dreams. Stay away from them. The odds are they became rich by selling the ‘dreams’ to common Joe. As Gary Vee said, bad mindset, anything that start with “I doesn’t want to work” is already a problem.

Instead, work on your passion while doing the necessity to survive. Greatness will take time.

Additional Note

Gary did mentioned about his book, Crush it. You can read more about it from my notes. Link are provided below.

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