Get Started Here!

Financial Freedom Through Passive Income: Year 1 Update

Passive income is a big part of our financial plan and journey to financial freedom. It also happens to be a very hot topic currently for many physicians, professionals, and people in general.

The allure of passive income

It’s pretty easy to see the advantages of passive income.

But before getting too far, I’ll remind you that I don’t really believe that there is such a thing as true passive income. What we refer to here and elsewhere as “passive income” is really “leveraged income.”

Less work, more tractor

Related Post:
Can You Actually Achieve Real Passive Income?

All this means is that passive income is really money we make in which our work to income ratio is (much less) than 1. By comparison, in our day job as doctors, our work to money ratio is 1.

Regardless of these technicalities, passive income (as it will be referred to here on out) is awesome.

You make it while you sleep. You make it with minimal overall effort (even though initial effort may be considerable).

Nuff’ said.

Different types of passive income

There are tons of options.

In fact, I have a whole post dedicated to all of the ways that you can make passive money through side gigs. Check it out here.

The most common and popular side gig for passive money currently is real estate investing.

Related Posts:
Does Every Doctor Need to Invest in Real Estate?
4 Reasons That Cash Flow Is King in Real Estate
Powerful Case Study of Passive Hustle in Real Estate Investing

For me and Selenid, the biggest sources are real estate investing, this blog, and speaking gigs. Again, are these totally passive? Certainly not! But they are quite leveraged.

Our goals for passive cash flow

Goal setting is extremely important. I won’t go into all of the behavioral and psychological benefits of goal setting or the science of setting good, S.M.A.R.T. goals. But I highly encourage all of you to become good goal setters.

Anyway, tangent aside…Selenid and I firmly believe in this and set goals for just about everything. If you check out our recent written financial plan, you will see that we set a very ambitious goal of achieving $250,000 in cash flow from real estate by 2025.

So that is goal #1.

We have also set out a goal of achieving an annualized 6 figures in profit from The Prudent Plastic Surgeon.

Let’s see how we are doing!

Real estate investing

I’ll start here because REI is certainly the biggest part of our passive income pie. And, as I mentioned above, we set a very high goal of reaching $250,000 in cash flow in 5 years at the start of our investing journey.

Well, it’s now been about a year (a little less actually) since we started learning about and investing in real estate.

In that year, we have bought 3 investment properties for a total of 8 doors.

Current cash flow

  • Property #1 has an annualized cash flow of $13,679.
  • Property #2 has an annualized cash flow of $15,393.
  • And, Property #3 has an annualized cash flow of $20,856.

This comes to a grand total of $49,928 in annualized cash flow. These are projected estimates based on our cash-on-cash calculations. Looking at our actual monthly income and expenses from each property, our annualized cash flow is more around $60,000. But we want to underestimate of course.

Related Post:
How to Screen & Analyze Investment Properties the Right Way

Regardless, we have already reached 1/5 of our 5-year passive income goal in the first year of our real estate investing journey.

Like I’ve said, it does take work. It takes effort. But, then you automate processes, get more experience, and it becomes really quite passive…ahem…I mean, leveraged. And!

The Prudent Plastic Surgeon

passive income

To be 100% transparent, I did not start this blog to make money. But it does now make money.

My goal and mission (as written one our first day of business on my Microsoft Word document business plan) is to spread the principles of personal and financial well-being to other physicians, trainees, and people of all walks of life by sharing his journey on this pathway of fulfillment, purpose, and happiness.

As I progressed, I recognized that I could spread my story and reach more people by investing into the blog. Initially, this just came from my pocket. However, income has allowed me to achieve even greater reach and provide a better product, which is my ultimate goal!

After coming to this realization, with some help from others in the space like Jimmy Turner from The Physician Philosopher, I developed the financial side of my business plan.

I set a goal for annualized cash flow of $10,000 in Year 1. Selenid has pushed me to set better and more ambitious goals. Our goal for Year 2 is now an annualized cash flow of 6 figures.

And right now, it’s been about 1 year since starting the blog.

Current cash flow

  • Over 1 year, the cash flow from The Prudent Plastic Surgeon was $15,386.

This has come from 4 main sources:

Speaking gigs

This actually has very little…actually nothing…to do with me. It’s all about Selenid.

Selenid has become a bit of a celebrity in her field thanks to her awesome and ground breaking research. As such, she’s had a ton of conferences and organizations ask her to give keynote lectures. It’s really pretty cool. So far, all of them have been virtual but I’m sure she (see: we) will get to travel to some cool places in the coming years for these talks.

Overall so far, she has cash flowed about $4,500 from these gigs.

Other sources

Sure, there are some other leveraged side gigs and passive income that we have made over the past year. Things like stock dividends, etc.

Related Posts:
My Love Affair with the Fading Excitement of Stock Market Investing
Stress Free Stock Market Investing Is Easier Than It Seems!

But these course have been very minor in comparison.

Total cash flow in Year 1

Adding up these main 3 sources gives us a total annualized cash flow of $69,814!

What did we do with all of this cash flow?

It’s really easy for me to answer this question. We re-invested all of this money!

We invested it into buying more real estate properties or improving the ones that we already had to force appreciation. In fact, we bought our third investment property (the one that is the highest cash flowing of the 3 properties) largely with our cash flow from the other 2 properties.

We also invested much of this money back into The Prudent Plastic Surgeon.

But what could we do with all of this passive income?

Well, we could live off of it.

In fact, this is a big part of our ultimate goal. Eventually, once our passive income outpaces our expenses, we will be financially independent and free.

doctor survey

Currently, this passive income replaces about 30% of our current expenses. We know these expenses from our budget.

Now mind you, if we decided to retire, we would do away with things like life and disability insurance, etc. So it would actually cover a greater portion of our income.

But we would still need to pay our mortgage and student loans. Once those are paid off, that passive cash flow goes even further!

But keep in mind, we do not have all of our eggs in the passive income basket for retirement

I am a big fan of a hybrid investing approach. So we both still maximize our 403(b) contributions and have a Roth IRA (which, to be fair, is not fully funded as I’ve written about).

Related Post:
10 Reasons a Hybrid Investing Approach is Best

This way, we get to fund our retirement using the best of both worlds strategies…passive income and equity investment withdrawals.

Looking forward to Year 2 and will keep you all updated!

Want to learn more about creating passive income in your life?

Like the blog?! Don’t forget to join our Facebook group and sign up for our weekly newsletter using the form below (under the comments)!

Learn more about my flagship course!

Love the blog? We have a bunch of ways for you to customize how you follow us!

Join the Prudent Plastic Surgeon Network

And accelerate your path to financial freedom with my free FIRE calculator!

    We won't send you spam. Unsubscribe at any time.

    Join The Prudent Plastic Surgeon Facebook group to interact with like-minded professional seeking financial well-being

    The Prudent Plastic Surgeon

    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected]

    5 thoughts on “Financial Freedom Through Passive Income: Year 1 Update”

    1. Thank you for the blog. I find the information provided very informative and thank you for being transparent in your journey toward financial freedom. For the three properties that were purchased, did you purchase them outright or there is loan on each property? Thanks.

    2. I would like to start active real estate investing but I am hesitant on how to start. My main fear is how to find a good real estate agent and maintenance of the property which I do not like doing at all
      Any tips to help with this process?

      • Getting started is always the hardest (and scariest) part! The key in beginning is education and team building. My wife and I recommend 2 books: The Doctor’s Guide to Real Estate Investing by Cory Fawcett and The Millionaire Real Estate Investor by Gary Keller. Definitely read those!

        In terms of team building, your investor agent is your #1 person. Interview a bunch of them. Ask if they invest in real estate. Ask how many investment properties they sell each year. Ask how they identify good cash flowing properties. Then work with them to set the criteria for properties you want to invest in.

        For property management, even self management can become quite passive as it has for us. Or you can just use a property management company nd be totally hands off. Its your decision on which end of the spectrum you would like to be!


    Leave a Comment