Real passive income is a myth [Ep23]

ShowNotes

Welcome to Quan2m! the Podcast every STEM student should be listening to. Covering everything from what’s going on in the world of science, interviewing people with STEM majors, and what they have gone on to do. To talking about finance, careers, and business.

In the last episode, we interviewed Viggo Rey. The man behind NordicAnts. The episode coincided with me launching this podcast more publicly so I just want to say hello to all the new listeners and I hope you enjoy this episode.

Today we are going to talk about passive income and how the way it’s most commonly presented it doesn’t exist.

What is passive income?

Income that is passive

• Essentially making money without doing anything
• It May require some initial work, but once set up then doesn’t require work
• You’re not paying someone else to do the work for you

One example of real passive income

• Investing in an index ETF
• But technically you still pay a small fee, but its comparatively negligible

Side Note: ETFs are actually very good for taxes since they can make trades, but you only pay taxes when you sell the ETF, while with normal funds this isn’t always the case

Now let’s talk about some of the stereotypical passive income things you see in every second ad on youtube

Amazon Drop Shipping

• Not passive since the requires repeat marketing work

Teaching paid courses

• Need to maintain your brand so again tons of work

Some MLM

• Well that’s just a pyramid scheme so usually a scam and requires tons of work

Normal investing

• Not that much work, but still needs work with risk management, picking stocks, etc.

Renting property

• Need to do maintenance work and organize things so absolutely not passive

ONE I SAW WHEN GOOGLING FOR PASSIVE INCOME FOR THIS EPISODE

YouTube channel

• I am sorry, but if you look at anyone successful on youtube the amount of work they put in and constantly posting content is everything but passive

Conclusion:

• No income is really passive. Yes, it can be good to automate some of your income to reduce the effort it takes, but no income will be effortless. The effort + foundation you are working from + money you put in will directly correspond to how much income you have
• So if you want income without working then you’ll have to pay the price somewhere else. Either in the money you put in, the time you put in or in the foundation you have from before.
• Opportunities can come which will greatly boost you and let you build from a better foundation, but at the end of the day, you still have to work for it.

Thank you for listening. If you are listening on Apple podcasts please consider leaving a rating. If you have any feedback you can reach out to me on Twitter at @Qun2m2 or through anchor. Both are in the description. Thank you very much and I hope you have a lovely day! Bye!