The Passive Income Lie

[WJK]

Rarely I have seen automatically machines built in printing money with passive effort.

It is more like leveraged effort rather than passive income, that once you get a worthwhile business system set up you are making high business income per unit time that is not achievable through working a job selling your time.

There are elements that could be passive, like creative works pumped by social media algo, customer getting you referral for new business, happy clients clicking renewal button, personal assistant taking care of admin work while you can focus on more impactful value creation…but the work itself its far from passive.

Many times it takes a strong business base to set up passive investment income streams. It's a lot of up front work, knowledge, and skills to make it all happen.
My trust deed business is that way. It starts with a lot of research and marketing. I learned to do that in my RE career by "bird-dogging" properties -- locating the right properties and contacting the owners. In this situation, I am looking for a specific type of RE security to purchase/assign that the owner wants to sell. Then I rely on my expertise as a RE appraiser to know how much to offer the seller for that particular security instrument -- different types of properties have different risk levels. I make a deal which requires me to use my selling skills. When the agreement is made, I combine using my own legal paperwork skills with running the escrow & title work through a professional company. I can do that paperwork rather than hiring an attorney because I went to law school. I solve any title problems during the escrow, if possible. Then, when everything is ready, I close the escrow, taking ownership of the trust deed. I end up with a passive income stream. Sounds easy, uh?

 

[Solais]

That statement about "MrMoneyMustache" (in case you don't know who he is, he started a famous blog about FI/RE after "retiring" from his job and penny pinching his way to $1M...I won't promote his content here by linking to it) is also spot-on...another Slowlane preacher but Fastlane practitioner. <_<

 

[garyfritz]

If you work your butt off for 10 years, save $1M in cash and learn the ins and outs of purchasing performing real estate notes, you can make $100K/year for the rest of your life with relatively little effort.

I'm not at MJ's "lots of money" level, but I could do this. Do you have any guides you'd recommend for learning those ins & outs? 10% on notes sounds a lot better than the ~6% I get on my rentals after taxes & insurance, but before management fees and repair surprises, even though you'd lose the depreciation writeoffs. I've had 8-15%/yr appreciation on my properties so it's worked out well, but I don't expect that to continue much longer.

I assume it can be just as difficult to get on-time note payments as it can be to get on-time rent payments. But it would be nice not to have to worry about tenants trashing the property &etc.

 

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[The Abundant Man]

I guarantee President Trump is laughing all the way to the bank. He's making 400k/year as President plus he's still making billions off of his hotel/real estate companies. His companies is making him passive income. Now he's set for life with Presidential benefits such as US Secret Service 24/7. Same with his Ivanka Trump and Kushner.

I remember watching an interview with Ron Howard and how he still gets Royalty checks of 35ç from when he did the TV Show Happy Days back in the 60's. Sure it's a measely 35 cents but to still get royalty checks after nearly 60 years. Passive Income.

 

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[garyfritz]

First, just stay focused on making the capital...

I already HAVE the capital. I never managed $250/hr rates but I've put together a small pile over the years. Small enough that 3-4% (e.g. what I can expect from my rentals) would be starvation wages, but 10% would be fairly comfortable retirement income. (Which is just a few years away for me.). That's why I asked JScott for more insight about getting 10% on performing notes.

 

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[100k]

Liked your comment to push you over the $3k mark. You're welcome. ;-)

Thanks. Only $97k to go

 

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[ZF Lee]

I posted the following on my Facebook page the other day, in response to a discussion I was having with someone who wanted to argue about the term "passive income" and "investor" when it came to real estate and other business ventures. Thought it might be appropriate in this thread...

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I keep hearing the terms "entreprenuer," "passive income," "investor," etc. thrown around by educators and gurus. Discussion of whether certain income is passive or not. Discussion of whether someone should be called an investor or entrepreneur or not based on what they do.

Personally, I don't care about labels. Whether you call the income I'm making Active or Passive doesn't affect how I'm generating that income. And it doesn't matter to me if I'm called an Investor or an Entrepreneur or an Employee or even an unemployed lazy piece of dirt.

Now, while none of those things matter, I've found that it DOES create confusion among many of us about what we do, how we're doing it and how it is creating income for us.

So, in order to help everyone get their heads around these questions, I wanted to share how I think about income.

From my perspective, there are only 3 ways to create income and only three classifications for those who earn income in these ways:

1. TRADE TIME FOR MONEY (EMPLOYEE):

People who trade time for money are employees. Even when you have your own company, if you're trading time for money -- and stop making money when you stop trading time -- you're just an employee.

I know a lot of real estate people hate when I say this, but for 99% of people who flip houses (MYSELF INCLUDED!), we're basically just employees. Even if we started the company. Even if we run the company. Even if we make million of dollars per year.

If you stop making money when you stop working, you're trading time for money and are just an employee.

2. TRADE UPFRONT EFFORT FOR MONEY (ENTREPRENEUR):

People who trade upfront effort for recurring revenue are entrepreneurs. Whether you start a business that can eventually run without you or create intellectual property (books, courses, etc) that can generate long-term passive income, if you're trading short-term efforts for long-term income, you're an entrepreneur.

Income created this way may resemble income created by trading time for money (#1 above) at first, but if you're a successful entrepreneur, you will eventually generate a whole lot more income long-term than the effort that was expended.

If you do things right, income generated through entrepreneurship will eventually be referred to "passive" income.

3. TRADE MONEY FOR MONEY (INVESTOR):

People who trade their money for more money are investors. Investors generate income using nothing but capital -- and in most cases, that capital was generated using #1 or #2 above.

This can include buying rental properties, lending, buying/creating notes, etc. All of these things have the potential to quickly generate passive income strictly through the deployment of capital.

Before you jump on me in the comments, yes, I realize that even these activities will generally require some upfront effort, but typically the amount of upfront effort is MUCH less than #2 above -- the bulk of the income is generated by the infusion of capital, not by the efforts of the investor.

And we can always argue about which category something fits into -- in some cases, certain income can fit into multiple categories. It's rarely clear cut.

Also, it's worth pointing out that in addition to time, effort and money, knowledge and expertise are required for all three of the strategies mentioned above to work.

Huh, people still argue about what entrepreneur/investor/passive income stands for?

What a sad world we live in today. Such poor education status in today's modern world.

Probably the Kiyosaki Cashflow Quadrant will come in handy in explaining them in detail, although now, I just read it in the same manner that I read Tintin comics.

At most, I have seen the most successful folks around me practise all three classes. Or two of them. But they already had some good wins so that they have the leeway to expand their 'empires'.
But I feel that a lot of them haven't really explored the INVESTOR class thoroughly. They mostly stick to stocks (retail) or property, and shallowly diversify politically into other countries. And by then they are in their 40s-50s. Success in terms of cash came in later for them I guess.

Maybe I'm complaining about this because I haven't seen as much diverse discussion on investing in my local space as compared with the Americans.

 

[ZF Lee]

I'm old (mid-40s), and I didn't start to appreciate the "Investor" class until a few years ago. I know a lot of people with money who still don't appreciate it, which is too bad. I think it boils down to most people not really understanding the power of compounding returns... I wish I understood it better 20 years ago!!!

I'm tired of hearing stuff on investing in stocks and property by leverage/appreciations. That is the common route of investing I spot from the local gurus.

I know there are better options out there, with varying degrees of control (activist investors) and risk/reward, but of course, they ain't available to most of the public. And I couldn't find courses or books on that. I suppose its one of the few things to be discussed over a golf game or a beer.

I realised that with the Internet and international banking, I could go invest in companies in fields as diverse as hemp (SHTF keeps advertising on these 'alternatives' via email), gold and oil. Of course I would have to learn about these fields and experiment with some funds a bit to test the waters, but it needs substantial money. That's the first thing to get.

Unfortunately, it appears to me that even more of the folks don't know how to earn the first lump sum or at least a good-figure income, with ample tax reduction.

When Dan Pena said once in his videos that 'the secret to wealth is unencumbered cashflow', I decided to look into it. I became a bit apprehensive to talk to other business folks offline, especially when it came to managing revenue. There is WAY too much concern on the business idea, the political environment (i.e. government stuff) and competition, when the take-home money amount is really what makes the difference.

On tax, I hope I can take a few courses on it for university electives, so that I know the Malaysian tax lawyer ain't bullshitting me. I can buy the Acts from the bookstore, but I need some key cases and examples to clarify them. I can understand though how weak people can get on the tax side. Folks on the lower end aren't really subject to the full weight of the law. Even for my Upwork freelancing, the US authorities just took a flat rate out of my earnings, and that was that.

 

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[garyfritz]

Stick with the tried and true stuff -- rental real estate, making secured loans, buying notes/paper, investing in private placements, etc. These are all investing strategies that can be learned with a few months of study and where investments are readily available once you learn how to find and evaluate them.

I've done rentals for years, though not real aggressively, and due to divorce I don't have huge results to show for it. Also,with the low-ish returns on rentals in this area (roughly 7% gross rents on SHF before any expenses), I'm questioning whether it's worth the headaches. Sounds like I need to look into buying notes &etc. Maybe some hard-money loans. I need to find some way to return more than the 5% net (or worse) I'm likely to see from my rentals, especially as the real estate market softens around here.

 

[garyfritz]

Digging up an old-ish thread... I mentioned that my real estate is in my local (northern CO) market, and high returns pretty much don't happen here. My rentals make about 6-6.5% *gross*, before ANY expenses. By the time I pay taxes, insurance, maintenance, etc I'm lucky to net 4% or so. And that's with me handling the management headaches.

(The upside is that the local market has always been very robust. It's grown steadily with never more than a 10% dip. My most recent purchase has appreciated 25% in the last 2.5 years. But that's not going to continue forever. And I've got 90% of my net worth in local real estate, which is not a good idea.)

I just saw a (spammed FB ad) pitch for a service that claims to work with investors to find, purchase, and totally manage rental properties in hot markets -- mostly Ohio. They claim you'll see an 11% return, net-net, after all expenses. Totally hands-off, just cash your checks.

I know some markets have much higher returns than I'm used to, but that's dinging my Too Good To Be True alarm. Does it sound even possible, or is this just another come-on scam? I would take 11% passive income ANY day, but I don't think it exists.

The sales pitch is at HelpRetire.com - Turnkey Real Estate Investing with Brian Bagnall.

 

[MHP368]

Digging up an old-ish thread... I mentioned that my real estate is in my local (northern CO) market, and high returns pretty much don't happen here. My rentals make about 6-6.5% *gross*, before ANY expenses. By the time I pay taxes, insurance, maintenance, etc I'm lucky to net 4% or so. And that's with me handling the management headaches.

(The upside is that the local market has always been very robust. It's grown steadily with never more than a 10% dip. My most recent purchase has appreciated 25% in the last 2.5 years. But that's not going to continue forever. And I've got 90% of my net worth in local real estate, which is not a good idea.)

I just saw a (spammed FB ad) pitch for a service that claims to work with investors to find, purchase, and totally manage rental properties in hot markets -- mostly Ohio. They claim you'll see an 11% return, net-net, after all expenses. Totally hands-off, just cash your checks.

I know some markets have much higher returns than I'm used to, but that's dinging my Too Good To Be True alarm. Does it sound even possible, or is this just another come-on scam? I would take 11% passive income ANY day, but I don't think it exists.

The sales pitch is at HelpRetire.com - Turnkey Real Estate Investing with Brian Bagnall.

Have you considerd mobile home park investing? A lot less work if you just want the rent checks , a lot more work if you want appreciation (because you just own the land and the utility lines , not the mobile homes)

 

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[garyfritz]

Thanks J, your $.02 is worth a lot.

That was what I figured -- probably an over-hyped and under-delivered scam. I don't see any major scam complaints online, but it's hard telling how much penetration the guy has. If I decide to look into it, I'll definitely grill him on some of those points. Meanwhile I'll look for other turnkey setups that might be more solid.

I'd like to see some kind of profit-sharing setup. If they can find a deal that delivers an honest 12% CoC, I'd be happy to let them keep 1% and give me the 11%. That way we'd have shared interest in truly profitable properties, and they'd have a growing pile of percentages on a whole lot of OPM. But I suspect the legalities and logistics of that could be messy.

My current units are 50 miles or so north of the Denver MSA so it's not exactly the same market, but it's close. There have been flat periods but in the data I can find, the Fort Collins / Loveland / Windsor area has never seen a significant dip. But I'm paying for that (possibly temporary) strong market with the low CoC returns that are possible here.

I totally agree with your diversification advice. I've got 90% of my net worth in one marketplace. That has worked out really well in the past, and the population dynamics say it could keep going for quite a while, but I don't expect it to keep working like that forever. I'm not comfortable putting all my eggs in one basket, no matter how well it's worked recently. That's why I'm looking for other markets like this 11% deal, or possible other investments that could return 10%ish. I'll keep lookin'.

 

[WJK]

Digging up an old-ish thread... I mentioned that my real estate is in my local (northern CO) market, and high returns pretty much don't happen here. My rentals make about 6-6.5% *gross*, before ANY expenses. By the time I pay taxes, insurance, maintenance, etc I'm lucky to net 4% or so. And that's with me handling the management headaches.

(The upside is that the local market has always been very robust. It's grown steadily with never more than a 10% dip. My most recent purchase has appreciated 25% in the last 2.5 years. But that's not going to continue forever. And I've got 90% of my net worth in local real estate, which is not a good idea.)

I just saw a (spammed FB ad) pitch for a service that claims to work with investors to find, purchase, and totally manage rental properties in hot markets -- mostly Ohio. They claim you'll see an 11% return, net-net, after all expenses. Totally hands-off, just cash your checks.

I know some markets have much higher returns than I'm used to, but that's dinging my Too Good To Be True alarm. Does it sound even possible, or is this just another come-on scam? I would take 11% passive income ANY day, but I don't think it exists.

The sales pitch is at HelpRetire.com - Turnkey Real Estate Investing with Brian Bagnall.

I've never seen passive income work that way in any of my 43 years of being in the real estate business. I do get those kind of yeilds you are looking for through investing in trust deeds and on my mobile homes. The trust deeds are labor intensive to find, but then I have a bank collect the payments and do the paperwork. I own almost all the mobile homes and rent them -- that are located in my park. That is VERY management intensive. It's a full time + job.

 

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[Ronald Williams]

Good point. The locals are going to snap up all the good deals. Seems unlikely that there will be so many 12% properties out there that the locals don't grab them all. And if they didn't, ya gotta wonder why not.

@WJK, I've done my own management (on a small scale) for 30 years. It's getting to be more headache than I want. 11% hands-off would be a dream come true, but I suspect it's just a dream.

My question is, does the property/investment cash flow enough to make it worth while? If not, then why would you purchase that property? It sounds like the property value appreciation makes it worth keeping.

 

[Deleted50669]

Saying passive

Couldn't get through the whole thing...

First, he couldn't stay on message -- He started with, "There is no such thing as passive income," and then quickly transitioned to, "I have lots of friends who work all the time and make lots of money" and "I know people who have tried to retire and they got bored."

Passive income is real, but it's not the magical, "Book the next flight out and sit on the beach the rest of your life" panacea that some gurus make it out to be.

Here are some truisms on passive income:

1. You don't create passive income out of nothing. You either need to invest time or money to generate passive income. If you're investing time, that's active. If you're investing money, you most likely did something active to create that money. So, while passive income is real, it takes active effort to create it.

2. The methods to earning passive income aren't always simple or obvious. It takes time to learn how to create passive income. If you want to invest in real estate, you need to learn about real estate investing. If you want to write Kindle books, you need to have expertise and a marketing machine to convert sales. Etc. Not only does passive income require time and/or money (see #1 above), but it requires expertise, which in turns requires time and study.

3. That said, unlike working a 9-5 job or other types of purely active income, once gain the knowledge on how to create passive income, and once you spend the time or acquire the income to create passive income, it can be done. If you work your butt off for 10 years, save $1M in cash and learn the ins and outs of purchasing performing real estate notes, you can make $100K/year for the rest of your life with relatively little effort.

4. Note that above I didn't say NO EFFORT. I said relatively little effort. Too many people want to be pedantic and say, "If I have to do ANY work, it's not passive income." Sorry, but nobody reputable has ever said that passive income necessarily translates to "no work whatsoever." Passive income simply involves a whole lot less work than what is normally considered active income. The people who refuse to get their head around this concept are the ones who are just looking for an excuse to argue against passive income.

5. MOST IMPORTANTLY, there is a direct relationship between the passivity of an investment and the return and risk of that investment. It's a triangle: RETURN, RISK, PASSIVITY. You set the level on two of them, and the third is out of your hands. If you want a highly passive investment that has low risk, you can get that -- but it will come with low returns. For example, if you're willing to accept a percent or two returns, you can have an almost completely passive investment in Treasury Bonds.

On the other end of the spectrum, if you want really high returns with reasonable risk, you need to shelve your desire for passivity. Businesses, 9-5 jobs, consulting, etc. -- they all provide high returns with relatively low risk. But, there is no passivity.

Now, what most investors consider "passive investments" are somewhere between those two extremes -- there's being a landlord (hopefully with a property management company that does the bulk of the work), there's buying notes, there's angel investing, there's creating/licensing IP, there's silent partnering with business owners, etc. All of these things are RELATIVELY passive (i.e., passive compared to running a business or having a job), and all of these things provide a mediocre return on your investment of time and/or money.

In summary, I just used a lot of words to describe the concept of passive income. Gurus would rather use many fewer words, which doesn't express the nuances of the concept. If you want to understand the concept, don't be scared of the words or nuances. And don't listen to gurus who don't want to consider the nuances.

Yup, all of this is spot on from what I've learned from the Forum / Life. The only TRUE passive income event is a large buyout, which is like hitting the lottery. But even then, time was invested upfront to make the thing that got bought out.

 

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[garyfritz]

My question is, does the property/investment cash flow enough to make it worth while?

After closer study, it looks like my properties net about 5.2% after PITI & HOAs. That's with me doing the management, which recently has been an expensive learning experience. If I hire a management company, the return drops to about 4.5%.

Is that worthwhile? Questionable. I can find plenty of things with little or no management headache that return lots more than 4.5%. I'm planning this as my retirement income, so I have to look at the long horizon. Real estate in my area (usually) has the advantage that rents can increase with inflation, and (sometimes) the property appreciates as well. Other investments won't have that inflation hedge, so you'd have to set aside some of your income to grow the account. Which tends to bring it back down to the 4.5% range.

The 4.5% ongoing income looks pretty good IF the property continues to appreciate. If the property decreases in value, then the 4.5% looks pretty bad. But any investment can go down in value.

 

[garyfritz]

Seems way too tight. One disaster away from being upside down.

Agree 100%. Especially since this is going to be providing me a less-than-opulent retirement. One disaster away from living on ramen in my dotage.

But that's the way it works with real estate around here. Several realtors, appraisers, and investors have confirmed that. So I'm rethinking how much northern CO real estate I want to hold. Trying to figure out how to increase my long-term retirement income. I'm considering getting into real estate in more-lucrative markets, though obviously that has many problems. I'm also looking at higher-return investing approaches, but it's hard to do that with an inflation hedge.

 

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[garyfritz]

The trick is finding those houses. As far as I know, they don't exist around here. J, are your 11% properties in the Phoenix area, or where? If I'm going to continue to hold rentals, I need to find much better alternatives than I have now. 11% cash-on-cash totally hands-off would be a DREAM for me, about 3x what I'm getting now. That level of income would provide a pretty comfortable retirement.

BTW I may have asked you this before, but does that 11% include appreciation? If so, then I'm doing better than that, at least recently. My properties have gone up 10-12%/yr since I bought them 2-4 years ago. But if I'm going to live on the income of these properties, appreciation is more of a "long-term inflation hedge" than "something I can buy groceries with this month."

I'm definitely considering moving out of rentals. Trick is, I currently only have two properties in my name, and I'd like to keep those. The two that I'd like to sell are still held by my mother's trust. I will inherit those within a few years, but before then I can't do anything with them.

 

[MHP368]

After closer study, it looks like my properties net about 5.2% after PITI & HOAs. That's with me doing the management, which recently has been an expensive learning experience. If I hire a management company, the return drops to about 4.5%.

Is that worthwhile? Questionable. I can find plenty of things with little or no management headache that return lots more than 4.5%. I'm planning this as my retirement income, so I have to look at the long horizon. Real estate in my area (usually) has the advantage that rents can increase with inflation, and (sometimes) the property appreciates as well. Other investments won't have that inflation hedge, so you'd have to set aside some of your income to grow the account. Which tends to bring it back down to the 4.5% range.

The 4.5% ongoing income looks pretty good IF the property continues to appreciate. If the property decreases in value, then the 4.5% looks pretty bad. But any investment can go down in value.

Have you considerd less traditional properties?

 

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[garyfritz]

Baltimore suburbs (B- areas).

Hm OK. Middle-class neighborhoods, maybe slightly older properties. I'm certainly open to that, but finding/buying/etc remotely would be new to me. I'll have to think about that. But 11% net after all costs is worth a lot.

Have you considerd less traditional properties?

Not really, but I'd certainly be willing to. I looked briefly at mobile-home parks but decided that probably wouldn't work for me. Did you have something particular in mind?

 

[MHP368]

Mobile home parks lol

What made you reconsider?

 

[garyfritz]

What made you reconsider?

You mentioned mobile homes a month ago, #39 in this thread. I looked at it and though it had promise, but the Forbes article I mentioned made it sound like you needed a bigger park than I can justify to do it right. Then @WJK said it's a "full-time + job," and that's not what I'm looking for. I could hire a manager but it would probably have to be remote. Leaving an investment of that size completely in some stranger's hands -- while I'm possibly across the country and can't keep an eye on the manager -- is a daunting prospect. You would REALLY have to trust the manager. Plus I don't know what the manager's salary would do to the returns. WJK said she made 11%-ish, but that's doing all the work herself, if I understand her right. You'd have to have a pretty large park, well beyond my comfort level, to make enough to pay the manager and still leave plenty for me. E.g. put $1M into the park, make 11% = $110k, pay the manager $50k. But then you're only making 6%. I have several investing options that should return 6-11% without any management headaches, and that sounds like a better match for me.

But I'm willing to be convinced. Do you have experience with parks?

 

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[MHP368]

Haven't run one but I've purchased the courses and listened to every podcast (well eveey episode by the 3 main podcasts)

I almost pulled the trigger on an 11 unit park , at that size the manager isn't getting paid really , theyre just living for free (so 9% of my income gone off the top) , that park had 2 extra spots so i.mediqte room for value add.

Id definitely say to look deeper into it (of course im biased) , for 50k a year Id expect the manager to be collecring from...jeez idk 60 or 80 units and do my maintenance (cutting back trees and basic road upkeep if needed)

A mobile home park management job is really not a full time back breakind endeavor , you dont need strong sales skills (they take applications , run them through whatever background checks you require and then take the money)

Remember with a mobile home park you dont fix toilets and things , thats the tenants. You just have to keep the electrix and gas going and make sure the place isnt over run with shady folks.

If you're looking for a more passive rpute for real estate this would be it , the money (and work) on your end is finding homes and moving them into empty spots or otherwise making the park more valuable for resale.

Also those things cost 4 to 8k to move so you can raise prices 5% a year (or whatever) no problem , those folks are stuck , with apartments you chrun people left and right , not so with mobile homes.

Im not sure the lonnie deal stuff applies jowadays so rehab is a bit pricier but still cheaper than single family or apartments (and if they abandon it and you take ownership thats another asset to sell off and brgin taking rent from once you're done)

 

[Kevin88660]

Just some thoughts. There is very little that can be considered true passive income unless it is derived through something like investments, and you have to earn the money to invest in the first place (unless you are fortunate enough to have inherited it).

If our goal is to maximise our free time we should be striving to build a low maintenance business where there is maximum disparity between effort expended and reward received. We need to capitalise on Pareto’s principle, the 80/20 rule.

There are many of us (including myself) who have built profitable businesses over the years but have found that we were dissatisfied with the effort/reward ratio.

I have recently shut down a business making around 80k a year because it was taking up too much of my time and I didn’t have enough free time to build something more passive.

However building a high reward low effort business takes a lot of effort. Those efforts tend to be stacked up at the front end during the start-up and establishment phase. The rewards come on the back end (hopefully).

The great thing about an internet business is that the time from start-up to established profitable business has been condensed due to lower overheads, direct access to large markets, lower cost delivery methods, and the fact that there is a wealth of knowledge available to act as mentorship in helping you avoid/reduce the mistakes you would have traditionally made.

Yes there are people out there who seem to be able to make a highly profitable, relatively low effort business overnight. However they have probably built up years of knowledge through diligent work and studies and maybe several failed businesses. They have then been able to leverage that knowledge and apply it to a new venture where all the pieces fit. Like an iceberg people only see the 10% above the surface, not the 90% that lays hidden below.

To me this failure to acknowledge that a lot of work goes unseen (perpetuated by the media that seem to love printing overnight success stories), and the desire for the magic unicorn is why you see so many people following these get rich quick charlatans.

They don’t want to hear there is hard work required to get there. Especially work that requires time and the building up of knowledge.

Rarely I have seen automatically machines built in printing money with passive effort.

It is more like leveraged effort rather than passive income, that once you get a worthwhile business system set up you are making high business income per unit time that is not achievable through working a job selling your time.

There are elements that could be passive, like creative works pumped by social media algo, customer getting you referral for new business, happy clients clicking renewal button, personal assistant taking care of admin work while you can focus on more impactful value creation…but the work itself its far from passive.