Whenever you see on the internet, someone promising you can earn passive income with little to no effort, You are being lied to. You are being scammed.
Passive income isn't always passive. In fact, I don't think it's real at all really.
Let's take an example of real estate for instance, because that's an example that a lot of people use.
There is a lot of work in just acquiring the deal in the first place.
When you purchase a property, then it is considered passive income in many circles. In fact, ask nearly any real estate investor his thoughts on rental houses and if they are considered passive income or not and he will absolutely say yes.
But in my opinion it is not. You see, Even after you get the property there are responsibilities.
- You need to do marketing to attract tenants.
- You need to filter and screen the tenants, Making sure they are good.
- You need to manage the property, If there's anything wrong, you gotta fix the property.
- If you have a property management company you need to make sure they are doing everything right. So you have to manage them.
Now it doesn't mean that you don't have a team or anything, but there's work involved.
When you own a piece of property, it is not that much different from owning a business.
Passive income ALWAYS requires effort on your part.
So is it really passive?
But Karma, don't you teach passive income strategies?
No. What I teach is "Cashflow Strategies" and there IS a bit of difference in my opinion.
You see, passive income "suggests" you don’t really have to do much and you can get paid for years and years without ever doing any real work.
So passive income, the way most people talk about it, saying you can make money on the internet with a push button system and make money for years on end is utter horsesh*t.
But cashflow on the other hand is different.
And specifically we are talking about positive cashflow here.
Positive cash flow means that you have more money flowing into your business than out of it.
Now, I don't know if you caught that word I used........it's "BUSINESS".
You see, Cashflow is a part of a real business. Not some Passive income hobby where you are sitting at the beach all day not having to work.
Now that business does NOT need to be a huge multi- million dollar company or anything. But a sound company none-the-less.
Google describes cashflow as:
"the total amount of money being transferred into and out of a business"
You see....it says business. That's what I build. Businesses.
I build online businesses that make me much more money than what I put out.
On both a business level and a personal level.
So if all of my expenses for my business is.. let's say $1,000 per month....
If my business is bringing in $6,000 per month, than I have $5,000 per month extra.
I like the sound of that!
Is Profit The Same Thing As Cashflow?
Profit, traditionally speaking, is the revenue remaining after deducting business costs, while cash flow is the amount of money flowing in and out of a business at any given time.
But to my own definition, cashflow is making a profit consistently even if you take some time off or are away from your business.
Whether it is a real estate investment portfolio you are building, an online business, or trading in the market...there is still work you have to do.
So get the idea of not having to do anything and still getting paid out of your head. It's just not going to happen.
Where Do I Get Started Building Cashflow?
That's a great question.
In my opinion, there really is just 2 options.
1. Building a real estate investment portfolio.
Now if you want to go this route, I highly suggest you go the commercial real estate route.
Back between late 2000 - early 2001, and 2008, I was in residential real estate investing in and around the Birmingham Alabama area.
I had aquired more than 360 homes within those 7-8 years.
But I was dying from it. It literally landed me in the hospital one day from so much stress.
(Not going to go into that story right now)
But nonetheless, I ended up selling off my properties (literally right before the bubble happened) and swearing I would never get back into real estate again.
Fast forward to early 2014 I found myself right back in real estate. Only this time I was doing things differently.
I found myself in commercial real estate buying up big apartment communities. With my first one being 300+ units.
Today I actually do a different type of commercial real estate investing, but it's still investing in commercial properties.
Now, real estate is not the focus of this particular page. But I wanted to let you know about it and my thoughts on it.
If you are going to go this route, I highly recommend going over to my friend and mentor Craig Haskell over at ValueHoundAcademy.com for more information.
2. Build Online Businesses
The second type of business you can build that will help you generate a lot of residual money is building an online business of some sort.
This could be building an affiliate marketing type business where you market and recommend other peoples products, or services.
This is one of the easiest things you could do to start off making money online.
I do this personally.
I might recommend to someone just starting off that they need to build landing pages and funnels and that one of the best softwares out there is to use a tool called Clickfunnels.
I would then give them a link to visit where they can get Clickfunnels and I would get a commission from that sale, each and every month they are a member of Clickfunnels, at no cost to them.
And you can do that with countless other products and services.
Or you can start a membership based site where you help others in a particular niche solve whatever problems they are having.
Or maybe you create an online course where you take a person from wherever they are now, to where they want to get to.
Either way you are solving a problem.
All of these I do. And I firmly believe that if you want to get to wherever it is you want to be, you should do these things too.
I'm not saying to do them all at once.
Start with just one thing and move on from there.
What I actually like to do is make a ton of money with my online businesses, and then feed the cashflow revenue into purchasing real property.
I don't save money, just to save money.
I want my money out there making little baby money.
So let's go ahead and see the in's and out's of these 3 online business models. (Affiliate Marketing, Membership sites, and Courses)