Finance Flash Go! Episode #52: Is Passive Income a Real Thing?

Today on the Finance Flash Go! podcast, we have a simple question: Is passive income a real thing?

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This is the question that I will try to answer today.

It’s hotly debated. Many accused me many times of incorrectly calling some type of income passive.

It really comes down to semantics. But semantics can be important. Someone hears about “passive income” and imagines a golden goose. It’s important that what we are describing is accurate to avoid misleading people.

Real passive income is really leveraged income.

What do I mean by that?

There is no such thing as passive income. We are really after leveraged income.

I fully believe that there is no such thing as real passive income. No investments are therefore truly passive. (Buying and winning a lottery ticket is gambling, not investing so don’t even try that one…)

However, I have found many investments that weaken the link between my time/work and making money. As a plastic surgeon, my work/time:money ratio is roughly 1:1. But with my investments, it is much, much lower. But, it’s never been 0.

Just because some work is required does not mean it is not worth it.

Now that you understand my philosophy on leveraged income, you should really think hard about starting to create some leveraged streams of income.

I really hope that you all enjoy the Finance Flash Go podcast! We plan to release a new episode every weekday answering important finance questions. If you ever want to submit a question to our podcast, send an e-mail to [email protected].

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