Our 2025 passive income just hit $398,000. Here’s how.

Passive income is a crucial part of our financial plan and journey to financial freedom. Passive income also happens to be a very hot topic currently for many doctors, professionals, and people in general. Here is a Year 5 update on my passive income sources.

The allure of passive income for doctors

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.”

MICRO INCOME FROM YOUR EXPERTISE

• Most side gigs take time to build. This one pays fast.

• I do short, physician-only surveys on Sermo between cases and get paid for my input.

• They take just a few minutes and the money hits PayPal or gift cards right away.

• It’s not replacing my OR income, but it covers the little things that have a big impact—gifts, kids' activities, or the next date night.

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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…or greater as it can often seem.

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 for doctors

There are tons of options.

In fact, I have a whole post called Physician Side Gigs to Make You Passive Money full of all the vetted ways that you can make passive money through side gigs for you to check out.

The most common and popular side gig for passive money currently is 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 this past version of our 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.

We also set out a goal of achieving an annualized 6 figures in profit from The Prudent Plastic Surgeon by 2025.

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.

It is now 2025 and we did not reach that goal.

And that's ok!

Interest rates rose, housing prices stayed high. We haven't found a deal we really loved in over a year. So, instead of forcing something that is not a good investment, we've been patient. And we've used our continually growing passive income from real estate to help minimize debt, spend intentionally, and grow other streams of passive income.

Current cash flow

Property #1 has an annualized cash flow of $12,876
Property #2 has an annualized cash flow of $18,312
Property #3 has an annualized cash flow of $33,624
Property #4 has an annualized cash flow of $17,700
Property #5 has an annualized cash flow of $16,104
Property #6 has an annualized cash flow of $15,696
Property #7 has an annualized cash flow of $19,116
Property #8 has an annualized cash flow of $15,276

These are projected estimates based on our cash-on-cash calculations and average monthly cash flows in 2025.

And it comes to a grand total of $148,704 in annualized cash flow.

Regardless, we have already reached ~60% of our 5-year passive income goal. This is up from 40% of our goal at the time I last checked these numbers in 2023. That's pretty good considering how the real estate market has slowed down (or at least our participation in it has).

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 it.is.so.worth.it!

The Prudent Plastic Surgeon

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. The goal for Year 2 was an annualized cash flow of 6 figures.

And right now, it's been about 5 years since starting the blog.

Current cash flow

Over my first full year of PPS, the cash flow from The Prudent Plastic Surgeon was $49,817
In my second year of the blog, the cash flow is $117,084
My third year of the blog saw cash flow of $134,627
And the fourth year saw cash flow decrease back to $116,447
Lastly, now in the 5th year, my projected cash flow is $243,676

This has come from 4 main sources:

Sponsors for the blog
Affiliate advertising for courses and conferences
Coaching/Advising
My course, Graduating to Success

But why the big jump? More on that later!

Speaking gigs

I have done a lot of speaking gigs within the medical field but these have all been pro bono except for 2 that resulted in $2,000.

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.

But these course have been very minor in comparison.

My biggest have been from:

Medical surveys/consulting: $4000

Total cash flow in Year 5

Adding up these passive income sources gives us a total annualized cash flow of $398,380!

This number is slightly higher than it was in Year 3 and significantly higher than it was in Years 1-2.

What did we do with all of this cash flow?

It's really easy for me to answer this question. We re-invested pretty much all of this money! Including on a down payment towards an STR ski home near us (more on that once I get it up and running and can share some numbers).

We also invested much of this money back into The Prudent Plastic Surgeon to continue to bring more value and expand into new media.

And we did do some intentional spending as well. This included a basement renovation and some experiences for our kids!

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.

Our current budget estimates annual expenses at about $250,000. This is probably a pretty good estimate of what we would need to shoestring at our current level of spending. So it is exciting to see that our current passive income replaces >100% of our current expenses. Again, we know these expenses from our budget and they help us decide how much we need to save for retirement as shown here.

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 also need to buy health insurance off the market, likely replacing those expenses if not adding more.

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

This means we actually have reached some real level of near complete financial freedom!

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, we only started fully funding on 2023 as I've written about).

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

A last note about the tricky part of passive income

As doctors who work very hard for our living, passive income is fantastic. Hopefully this post has given an in depth and transparent illustration of just how powerful it is.

Realizing that I will have nearly $400k in passive income this year is almost unbelievable. I can remember back when I started this journey 5 years ago and never would I have imagined this is possible. Small steps truly add up to gigantic gains.

However, the trick is that you have to maintain this passive income. Each passive income stream needs to be thought of as a business. And each income stream needs to be nurtured, maintained, and grown like a business or a person or a plant. For instance, I will need to keep working harder and harder to provide outsized value on this platform to maintain the PPS business!

Again, this is why even passive income is not truly passive. But it sure is still worth it.

Looking forward to Year 6 and will keep you all updated!