Issue 3: The Myth of Passive IncomeIssue #3 - November 9, 2009 This issue about the myth of passive income, but first... Mastermind Group Forming!I am excited to announce the formation of a Mastermind group starting in January 2010! Karen Burke of Mobius Business Coaching will facilitate the group. This will take place at the Chamber of Commerce, Acton, MA.I will be working on accelerating my personal journey towards financial freedom. You are of course free to choose any business venture to focus on, including developing your own financial freedom plan. When: 2 hours every 4th Wednesday or Thursday of the month (Currently both slots are available. We will decide on the day based on the response we get.) The first session will be on January 24th (Wed) or 25th (Thurs), depending on the response. Please contact me or Karen directly at 978-844-2555. Her website is at http://www.gomobilus.com/index.html. Now back to our regularly scheduled programming... The Myth of Passive IncomePassive, according to this online dictionary, means "not participating readily or actively". Thus passive income refers to income you get with no active participation from you. So what is the ideal situation we are looking for on this website? Money coming into your account month in and month out on a regular basis with no oversight or management from you. Well, I hate to disappoint you, gentle reader, but there is no such thing as 100% passive income! And that is for one very simple and fundamental reason: Life has this habit of constantly changing and evolving. Things ChangeYou research a stock, do your due-diligence and buy a stock that has increased its dividends year after year for many years. And then a financial crisis hits the economy and the company gets crushed and suspends its dividend. It happened to me last year with a company called American Capital (ACAS)! This is - or rather, used to be - the gorilla in the Business Development Company space. I thought it would be a no-brainer to invest in ACAS - and buy-and-hold it forever.[NOTE: I am of course kicking myself now for not using a trailing stop - something Van Tharp will rightly chastise me for. I am happy to report that I have learned my lesson and now have trailing stops in place for the bulk of my stocks.] Or you buy the perfect rental property in the best neighborhood in town. It has prospered over decades. You do your due diligence and buy and collect rents for years. Then the industry on which the local economy depended collapses, and the whole region falls out of favor. You start having trouble finding tenants, and the value of your property plummets. It happened to the oil industry in Texas in the 1980s. Or you turn your money over to a true financial genius (can you say Bernie Madoff?!), and live "happily ever after" for a number of years - until he is indicted for fraud. The Buck Stops Here!NOBODY is going to be as interested in your money and financial well-being as you are. And you absolutely cannot trust anyone 100% with your money.Ronald Reagan is credited with the motto, "Trust and verify." That is a great guiding advice for life in general and passive income in particular. That verification takes time and involvement. You have to educate yourself about whatever you are going to invest your time and/or money in. As Van Tharp says, you have to start by taking 100% responsibility for your results! That is a necessary first step to becoming financially free. Business StructuresWhat you can do is focus on creating business STRUCTURES for generating passive income. And then automate them to such a degree that you spend only a couple of hours every week making sure all systems are working.Two years ago Timothy Ferriss came out with The 4-Hour Workweek, Expanded and Updated: With Over 100 New Pages of Cutting-Edge Content I highly recommend that you read the book. I love his out-of-the-box thinking. In particular I like his emphasis on automating every little task you can. That is the way to go if you want to live an efficient life. And financial freedom is the ultimate in efficient living! And that is indeed my ultimate goal. Yes, 100% passive income is a myth, but it is possible to get closer and closer to that ideal with well-planned and built business structures. And of course that is what I will be focusing on in this newsletter and on my website. Update on My ProgressAnd here is my latest personal financial update:
I RecommendMozy: Get peace of mind by backing up your precious data automatically.SiteBuildIt: Create a passive stream of income with your online business. Vision Board: Animate your Vision Board right on your PC. Millionaire Mind Intensive: Rewrite your financial blueprint. Use Reference Number 686019. Life Design 2010: Create a life that is unrecognizable and filled with everything you love! Visit my Amazon Store: Lots of books to help you become financially free.
|
. It became an instant New York Times bestseller. The subtitle of the book says it all: "Escape 9 - 5, Live Anywhere and Join the New Rich." Sounds kind of like financial freedom to me!
