How Can Active Income Be Better Than Passive Income?

I could pretend like this was easy – like I could share the secret sauce of creating passive income for life. But it’s not that easy. No reputable story I’ve heard, book I’ve read, or person I’ve talked to, has guaranteed 100% passive income at very little or zero personal sacrifice. That’s because it doesn’t exist.

When looking at income you can categorize it into three main groups: Income you work for (earned income), income that comes to you without work on a regular basis (Also called passive or residual), and income that you receive when you sell an asset (stock or real estate) for more than you bought for it (capital appreciation).

There are a lot of videos, books and even seminars, that claim to help you create passive income. I’m here to show you why they’re all wrong.

I don’t want passive income. At least not in the way most of the gurus are talking about. Recently I’ve been reading Tim Farriss’ book “The 4-Hour Workweek”. While I’ve been able to glean some useful information out of it like how to simplify certain tasks and create automation I disagree with the premise of the book: the less work the better.

The whole idea of slimming and cutting your time down into 4 hours of work each week is actually appalling to me. While I certainly don’t want to be working 80 hour weeks like he talks about avoiding, I also have seen the benefits of working hard with true purpose.

Whenever I get done with work there is a feeling of built confidence and endurance. Even on challenging days you feel like you’ve overcome worthwhile obstacles. In my option without some sort of work life becomes meaningless.

From Christmas 2017 till March 2018 I had practically all the time in the world to think about this question. I was in Zambia with my family, spending time with them before I headed back to the U.S. in March.

The thing was most of my family was busy during the day, which left me plenty of time to think – including about this question. I thought, how can generate enough money so that I don’t have to work. I strategized this for a while. I finally realized I didn’t want to eliminate work altogether. I simply wanted to make it optional.

To be fair Tim Farriss is actually probably right about a great deal in the book – that there are ways to relatively easily create more time in your life – whether through automation or elimination. However the whole way the book is presented is how to reduce work or almost like work is bad. He tapped into the feeling that many people feel: they don’t like work.

I have a simpler and (I believe) better solution. This choice is difficult to find yet it’s what some of the most successful people in the world have chosen. People like Bill Gates, Jeff Bezos, Elon Musk and many of the ultra rich followed this path. Why not pick a kind of work that you enjoy? Why not experiment and explore the options till you find something that excites you and makes you enjoy “work”?

 

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