“Don’t work for money; make money work for you.”
– Robert Kiyosaki
If you’re anything like me, you always need more time.
This is why passive investing is so important.
You can generate cash flow without investing a lot of time.
Today, I’m going to get into exactly how you can do that.
Let’s jump into it!
1. Passive Income Streams With Minimal Time
Many people think passive investing involves putting money in, doing a little bit of work, then collecting your profits.
A lot of assets can even parade as passive investments when they’re not.
Single family homes, actively managing a stock portfolio, and online businesses are not passive.
You can’t scale them up without taking more of your time.
If you don’t know whether or not an investment is passive, try the scalability test.
This is from my book, Fire Yourself.
If you can’t 10X what you’re currently doing, then it’s not a passive investment.
For example: If you can’t go from three houses to 30 houses without increasing your workload, then it’s not passive.
The process of acquiring houses, finding a property manager, and getting tenets is a lot to manage.
Not to mention tenet issues and repairs.
That’s a lot of work!
Passive investments do not require that much work.
Instead, you put a little bit of work on the front end by vetting a deal, and then you choose to invest or not.
After you put your money in, you’re hands off.
You’re not actually the one doing anything.
The person doing most of that work is the operator or the partner.
You simply receive the mailbox money.
That’s actually the name of my podcast: the Mailbox Money Show.
We talk about passive investing all the time.
Especially the idea that you’re investing and the money just shows up.
You do also get the reports, but you’re mostly getting the cash flow.
It’s an awesome deal because it allows you to make more money without taking up more of your time.
I have a buddy who’s a high-paid physician.
He’s digging a ditch at his house because he’s trying to save some money.
His time is probably worth hundreds of dollars per hour, so the few thousand he’s saving isn’t much of a blip in his income.
He could easily hire somebody for $15 an hour or less to dig the ditch for him.
It reminded me of a great book called Who Not How by Dan Sullivan.
In the book he challenges the reader to think about problems differently.
When we usually have a problem, we’ll ask: “How can I solve this problem?”
But that’s the wrong question.
The question should be: “Who is going to solve this problem for me?”
When it comes to investing, great partners are a must.
2. Automation Can Maximize Efficiency
How can you maximize your investments?
Well, the first thing is to look at appreciation versus cash flow.
Different deals can have appreciation.
Some apartment buildings that we own grow in value over time.
They provide some cash flow as well.
But I think the best investments are ones that provide cash flow.
For example, oil and gas provide great tax benefits and cash flow.
Private businesses are also great assets for this.
Investing in cash flow assets is what allows you to, as my book would say, fire yourself.
These investments help you replace your living expenses.
For example, I only needed about $6,000 a month to cover my living expenses.
Your number may be much higher or even lower.
But you should know that you don’t necessarily have to replace your income.
Aim to cover your living expenses at first.
You’ll eventually start making progress and make work optional.
Again, my preference is to use cash flow deals.
I even prefer some safer deals that have consistent cash flow versus not paying monthly or quarterly.
Those investments allow you to develop cash flow.
Successful investing is all about growing wealth consistently over time.
And that’s what cash flow will do for you.
3. Balancing Your Job with Building Passive Income
I used to work full time.
I also spent 30-plus hours a week doing real estate.
Now, I won’t lie…
That was a lot of work.
I maintained this schedule for about three years.
After that, I was able to dial it back and quit my W-2 job.
I was a full-time investor from that point forward.
I’ve seen a number of people do the same thing.
They were able to build, build, build, and then scale back.
Sometimes it’s better to invest the time now so you can relax later.
I spend a lot of my relax time traveling.
Passive investing has allowed me to go to the base camp of Everest, India, and Portugal, among other amazing places.
I encourage you to have goals for yourself.
Look at what you want to do, make goals, and start your path today!
If you think you don’t have the time, I promise you do.
According to a 2023 study, the average American spends up to three hours a day watching TV.1
That’s 21 hours a week.
And then there’s the time we spend on social media.
According to recent research, a “typical” social media user spends just over two hours on different social platforms.2
Adding up the time we spend on TV and online, that’s five hours a day you can free up for passive investing.
If you dedicate that time seven days per week, that’s 35 hours you can spend weekly on yourself.
That’s what I did to grow, and it worked really well!
In conclusion, start learning now
Take action.
Invest passively.
They say that the best time to plant a tree was 20 years ago.
The second-best time is now.
Now I want to hear from you!
What’s your current investment strategy?
Let us know in the comments.
Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.
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Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.
Works Cited
1. Stoll, Julia. “U.S. Daily TV Consumption by Age 2023.” Statista, July 4, 2024. https://www.statista.com/statistics/411775/average-daily-time-watching-tv-us-by-age/.
2. Kemp, Simon. “The Time We Spend on Social Media – Datareportal – Global Digital Insights.” DataReportal, January 31, 2024. https://datareportal.com/reports/digital-2024-deep-dive-the-time-we-spend-on-social-media.
