Here is No 1 of 3 Wealth Creation Myths!
Someone brought this up in conversation again only this last week.
They said they were working on creating their wealth by building a . . . Passive Income Stream.
And I said back to her . . .
“Horse-radish, there is no such thing.”
But in reality, that is not true.
Everything requires energy to keep it going, thereby obliterating the passive part.
Let’s take a look at some of the incomes commonly perceived as Passive Income Streams.
- Real Estate
- Network Marketing
- A managed business
The myths goes . . . “By a dozen houses and live off the rent.”
But there is maintenance and management to be taken care of.
You can get someone to do this for you, (which means you need an extra 3 houses to cover the costs), or DIY do it yourself.
And right there, your income becomes not quite so passive after all.
Even if you have it all managed, it requires your input to make the big decisions.
And so it is not passive.
This is a great business model which has a lot of merit.
But it is spruked as the ultimate solution for passive income … which it is not.
The myth says … “Sign a few people up and then make ongoing commissions on their purchases.”
That’s how it works, but you need to actively support and foster them in the business.
And right there, your income becomes not at all passive.
Even the top leaders must continually have input to ensure continued growth and replacement.
A Managed Business
The ideal is to take a regular business run by the owners and turn it into a fully managed business by putting in a board of directors and a management team.
But like the situation with real estate, this requires additional layers of cost and management.
Most businesses have the potential to get there, but will not make it because of the level of growth required to support those overheads, and/or the lack of knowledge or willingness to do it.
All assets and income needs to be managed.
This means that you must know how to manage a team and experts who can manage your portfolio of assets.
Replace the myth of passive income with the reality of portfolio income.
This is where each of your assets is part of a portfolio managed by a team.
Make sure that you monitor and maintain your portfolio and the return it is giving you.
Look out for No 2 of 3 Wealth Creation Myths next week.
Well, that is quite simple really!
Watch this short VIDEO
Wealth Dynamics and Wealth Spectrum in 5 Minutes
What should you do now?
- Do you know your Wealth Dynamics Profile?
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The common question that gets asked in business is, ‘why?’ That’s a good question, but an equally valid question is, ‘why not?’
~ Jeff Bezos
Remember – No 1 of 3 Wealth Creation Myths