#83: 5 Things You Need To Know About Passive Income

Foreign. Welcome to the Passive Income MD Podcast, where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now, let's get on with the show. Hey, everyone. Hope you're having a great week. You know, I've been doing this passive income MD thing for about, I don't know, about four to five years now. And, you know, I've been blogging, podcasting courses, conferences, we've had our Facebook groups, and things have grown so much. And it's been a journey for me, and hopefully it's been a journey for you. You've been on it with me. I know that as I've gone throughout the whole thing, I've evolved my understanding passive income and things like that. It's totally changed over time. I mean, in a good way. You know, I've learned so much. You know, it used to mean something to me early on. I mean, it just meant that passive income meant that it was simply earning money in a way that isn't proportional to the time you put in. I still think that's a great definition. Passive income is, you know, earning money in a way that isn't proportional to the time you put in. And that's like, versus, like, let's say, your day job, where your time in equals your money out. And I think it is still true. And I still. That's what I believe. But I've learned so many things about passive income overall. You know, some of the myths, some of the truths, and it's all, you know, been learned on this journey through a lot of trial and error, seeing what others are doing, working stuff out myself. And I figured that I've learned that the journey just really impacts and affects you in different ways. So now that I've, you know, been on this journey for quite a while now, it's funny to see, you know, look back and see how my mindset has changed as I've learned new things. And so I'm gonna share with you today five things that you absolutely need to know about passive income. Okay, here's the first one. Newsflash. Passive income isn't completely passive. Now, it might sound counterintuitive, right? I mean, that's the whole point. It's called passive, right? It may seem discouraging to even some of you to learn that it's never completely passive. You know, unfortunately, I don't think passive income at least becoming the master of creating it doesn't mean you do nothing and the money just starts rolling in. If income, like without any effort altogether, you know, none whatsoever. If that's your ultimate goal, it's likely either that you're gonna probably get scammed cause you look for an opportunity like that, or you're gonna take an extreme risk and put yourself, at least risk putting yourself or your family in a pretty bad situation, right? Or some like in a situation where honestly you're not setting yourself up to win, like, you know, essentially playing the lottery. Now it's true that passive income can result in time freedom, but getting to that point, it's gonna require, I would say, one of three things, either time, money or energy. Now, time, money or energy, or any combination thereof, right? You know, the more of each that you put in time, money or energy, the quicker you're probably gonna get there. Now sometimes it takes a ton of hustle to get a business off the ground, but once it's going, the gains continue to increase over time. Same or potentially even less work. You know, I talk a lot about investing in real estate, right? Like syndications or real estate funds, which I mean, I consider, and many consider to be one of the most passive ways to invest in real estate. You invest your capital, hardened capital, someone else, right? And then they create, you know, cash flow for you. They, they operate the deal and at the end of the deal, hopefully you get some profits out of it over time. I've put quite a bit of my net worth and my investable assets into these passive real estate investments, and I still call them pass of real estate investments. But it does require some work upfront. You know, contrary to, you know, popular belief, it takes time, whether it's weeks, months, years to learn how to decide which investment to make. Like who do you invest with and how do you know a deal is the right deal for you in terms of your goals, in terms of your level of risk that you're willing to take, whether the profile of it, I mean, that takes some time up front. You know, that's what we talk about in our course, Passive Real Estate Academy. But I mean, I spent, you know, years trying to figure this out and learn how to do this. Well, now I know that a lot of people are now learning how to do this in our communities in a very, very short period of time. But it still takes some work upfront, right? Maybe even some capital up front and investing to learn how to do this. Well, but once you know how to do it and you invest your capital, then it can become really passive from there. And so what happens is, like, you invest in these type of things, and eventually you get quarterly reports that you read. Every once in a while, you get some distributions, your bank account, and hopefully at the end of these deals, you get a nice profit at the end of it, and it becomes a completely passive. But again, it takes some work up front to decide who to invest with, create those networks, create those connections, and then you get to reap the benefits later on. I mean, this can be even the same for the stock market, for those of you who love to invest in index funds and things like that. I mean, there's definitely some passive aspects to that, right? There's some passive income that comes from just investing your money in the stock market. But let's be honest, like, if you're gonna do it right, you should learn how to do it well, like what to invest in, why to invest in it. Well, you know, or what to invest for, when to invest. And then ultimately at the end of it, like, you know, when to actually start, you know, pulling some profits off and living off of it. So if anybody tells you that passive income is completely passive, I always try to actually dispel that myth. And I tell them, hey, whether it's having your own properties, whether it's investing in other people's deals, there's gonna be some work upfront to figure out how to do it well, put some time, energy, and effort, but then you can see your efforts scale later on. And that's why it's called passive income. Okay, Number two, I've actually learned that passive income, it gives you the choice to do nothing, right? I mean, you can just, you know, at a certain point, once that income is great enough, you can sit back and do nothing. But most people don't end up doing that. You know, when most people dream of passive income, they picture themselves, right, relaxing on a beach, drink in hand. That's a typical picture, passive income, really checking your phone every once in a while, watching your bank account growing. But in reality, I found that people who have achieved financial freedom through passive income, they end up pursuing their passions, right? They divert their energy into stuff that they actually want to do rather than just laying around. I mean, many people, you know, they even continue to stay at their jobs as doctors because that's, you know, they enjoy what they're doing in a lot of ways. I still believe that medicine is a calling, right? I mean, you were kind of called into it. You must have had the passion for it to get through all that time, energy, and effort spent in training and school. And so you must have been passionate about it at some point. And I think that most of us, when given the opportunity to do it as much as we want, like we don't have to worry about the financial pressures at all. Many end up staying at their job, so they might go part time. Some of them retire gradually over time, but they still continue to practice on their own terms. And isn't that the dream? Right. My friends, for example, like the white coat investor, physician on fire, both have achieved financial independence. Physician on fire ended up retiring. Right. The white coat investor still continues to work, but the physician on fire, even he will go and do medical mission work. You know, he's also, you know, diverted his attention, you know, to other ventures and other things. Right. So I found that even though people achieve financial freedom through passive income, they still find the time and the energy to do other things they're passionate about. And it's funny because they can do it from a pure place of wanting to do it because they love it and it provides fulfillment for them without having the stress of relying on it to provide for their families. Okay, number three, passive income. It takes time to develop. You know, when it comes to passive income, I think the most important word of all, I think it's the word hustle, you know, that's like channeling my inner Gary Vaynerchuk. If you don't know who he is, he's a popular media person. He talks about hustling, right. Other than that, the word is persistence, right? To kind of continue to have that fire and work hard at what you're doing to get the results that you want. Right. Many people talk about really wanting that passive income, but few people actually take action. Most get stuck in that quote unquote analysis process and never take that all important first step. What I think most people don't realize is that the goal of your first couple steps, it's just about getting an education, right? Whether it's in business, finance or investments. I mean, I feel that people often, they put too much pressure on themselves to hit that like perfect home run on the first shot. And so when you look at like wildly successful people out there, like people who have done it and you know, they're at the place you want to be, most will tell you that it's their failures, right? It's the missteps, it's the challenges that they, you know, had to face that allowed them to be successful today. So without that failure, you know, without iterating, without course correcting you can never really achieve that success. So you absolutely need to fail as soon as often as possible. However, I find that most people quit before they get to where they need to be. I don't know if you've ever seen that cartoon, it's in one of my blog posts. But there's like a miner and there's like a pool of diamonds, right? And they're digging and they're digging and they're digging and then they turn around like inches from the treasure, right? You know, most people give up before they've actually had a chance to achieve, you know, what they want to achieve. And sometimes they're so close. So with any sort of investment, any sort of, you know, passive income venture that you have, whether it's a business, whether it's investing in real estate, whether it's doing these kind of things, know that it'll take time and that with persistence, you, you know, you increase your chances obviously of creating success. And it's not going to happen unless you continue to have persistence. Number four. I've learned that there are so many different ways to develop passive income. Now I have a blog post, you know, called the 10 perfect passive income Ideas for Physicians. And that's like one of my first blog posts that seemed to do pretty well. In it. I primarily talk a lot about real estate investment, online businesses, but what I've learned is that there are so many different ways to develop and achieve passive income. I've interviewed tons of physicians and I've learned that there's no one way. Now, if you've ever been part of our leveraging growth summits, at this point, I've probably interviewed 80 to 100 physicians who have been able to create income. Some a little bit more active, some definitely passive. And they've done it in extraordinary ways by utilizing, you know, whatever resources they have, but really being resourceful and being creative and figuring out how to leverage their current skill set and their network and their experience. One thing that I do know about physicians and doctors and these high net worth, you know, high income professionals is that we know how to achieve results. Like if we want to be creative, if we want to be resourceful, if we want to like put our ambition into something and achieve something, we're going to be able to do it. So when I look at all these people who have achieved financial independence, you know, in so many different ways, there is one unifying factor though. It's really the, I found that they all have in common. It's the desire and belief that they can make it happen, you know, because times will get tough. But if you absolutely believe that you can achieve these things, right, it's gonna carry you through. And that's the one thing I do notice. That's a unifying fact among all of them. You know, if you want some ideas, we have a. I have a great post on Physician side Hustles. Also, we have a great Facebook group called Passive Income Docs where you can talk to other people about what they're doing. The bottom line is this. Don't limit yourself by following someone else's blueprint. You might look at it and be like, ah, I just can't do what they're doing. That's okay. Use their experience. Get inspired by what they're doing, but figure out your own ideas. Figure out what resources you have, you know, what skill set you have, and then really make the journey your own. All right, number five. And this is the most important one of all. Anybody can do it. I used to wholeheartedly believe that it takes a certain kind of personality, right, to achieve these type of goals, right? I'm just not like that, or this person is just not like that, or this person's more inclined to be an entrepreneur and do these type of things. I thought that, you know, a lot of people were born with some sort of innate ability to make savvy decisions, right? Like a sixth sense. You know, as doctors, we look at some of these other doctors who have done it, be like, oh, I could never do that. However, since I've come across all physicians, so many physicians and doctors who have done this, you know, in so many different ways, achieve financial freedom, achieve their goals. You know, I found that they have all sorts of personalities. Some are extroverted. Some are introverted. Some are really analytical. Some are just creative. I found that you don't need to be born a certain way. You don't need to be, like a savant to reach these goals. Let's be honest. If you're listening to this and willing to spend your precious time to try to educate yourself, you've already taken more steps than the average person, right? To make all this happen, you sacrificed your time. You could have been watching Netflix, maybe doing both, but you spent it reading blogs, listening to podcasts, trying to get inside a community of people doing this. And already you've taken steps towards it, and you're further along than probably most people around you. You know, I love hearing stories of successful doctors, you know, doing different things. You know, if you have one and you want to share it with me please do so just reach out to us. Contactassiveincomemd.com I love sharing these stories. We're gonna try doing more of this in the next year, sharing more of these stories on the podcast. But of course we do it through our summits Leverage and Growth Summit. We do it through our other conference, the Real Estate conference, Financial Freedom through Real Estate. But I still love hearing more of it. Please reach out. Let us know, you know, if you've been dreaming of really making that passive income, you know, it is possible. I've seen so many people do it, so many people in our community over the last four or five years. I've seen people achieve it, whether it's financial freedom or they've gotten closer to their goals. The key is taking that first step, figuring out what that is, realizing there's no one right way, there's no one perfect step. The key is getting started, letting momentum and that, you know, overcoming that initial inertia, getting started. And then you'll find your own path. You know, all you can do is get going, hopefully fail early, but let that propel you to greater success in the future and hopefully find others to support you on your journey as well. And I think that's a big part of it. So is there anything else that I've missed here? Let me know. I love hearing from you, whether it's, you know, through our emails, through our community, passive income docs. Either way, wish you best in your journey. We're here to support you as a community and talk again next week. Take care. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, make sure to hit subscribe. Are you part of our community yet? Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. You can join us on our Facebook group PassiveIncome Docs and you can always learn more at our website, passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.