Passive Income is a Myth 

Asking a real estate broker if it’s time to buy is like asking an alcoholic it was time for a drink.

Great closing words: "Everything has to be watched. Everything has to be managed." ... unless you want to live in the forest, sleep on the ground, and forage for berries that statement is very important.

You're a mind reader, my friend. I always laugh at these RU-vidrs who brag about being retired before they've reached 40 years-old. It's like, bro, you're putting out 3-4 videos a week, selling a course, and privately coaching people to supposedly retire on passive income. And probably managing crypto, stocks, and real estate behind the scenes. That's all work, not retirement. That's not passive at all.

Thank you for calling out the bs of the fake financial gurus on RU-vid who only want to sell you their course. I appreciate your genuineness.

As a professional poker player it's not very often I see someone of Andrew's caliber not being completely dismissive of poker as a career/lifestyle choice. I give even more props to the fact that he seems to understand how incredibly difficult it is & how much work is required to be truly successful at it. It's honestly refreshing.

Its delayed gratification rather than passive income, you need to work hard for decades and invest as much as possible to build a portfolio that pays for your life style

I 100% agree about the “company it keeps”. The passive income mantra attracts a ton of scammers and borderline scammers. Like sure their course might be legit, but you don’t necessarily need to buy a course to learn what they’re trying to teach.

Remember, in the Gold Rush, the only people who made 'real' money were the folks selling pics & shovels.

Passive income is just a scale with more and less work but there's nothing with no work

Every time I hear someone say "I could live off my dividends but I choose to continue my business" or like he said "I'm building a 7 figure dividend income", I just feel like their life outside work sucks. I could never trade a life traveling and relaxing with my wife, volunteering here and there and going to museums and meeting friends for work. Ever. And if you do, it's one of two options: either you think you don't have enough money, or your life outside work sucks and you'd rather feel the fullfilment of making more money and growing your business

No such thing as "easy money" in a free market! Thanks for the content

The term passive income is usually used by MLM people. Whenever they start to tell me about this, my answer is "Passive? You are still out there looking for new people to join your scheme, THAT is very active."

Good to see "passive income" not being confused with not working.

Passive income = putting the work upfront, delayed repayments

I have yet to meet one person who talks about "passive income" that isn't seriously lazy and work avoidant. It's kind of amazing because if they'd just put that same effort into creating value they wouldn't be broke.

My wife, who's a quite popular pro athlete and fitness coach has her own fitness app. We got "sold" the idea that this would be a potentially 5 figures _passive income_ since she had to design the platform only once and the rest is based on promoting it on her socials and getting the subscribers in. While the 5 figure monthly income is realistic and got reached within the first trimester, this bloody app has *nothing* passive about it. Nothing! It's an *ADDITIONAL* load of work, on top of the already packed schedule she had. She worked so hard to delegate most of the tasks (writing new programs, online marketing, managing the memberships, taking care of glitches etc...). Big wake up call.

I'd reached a similar conclusion. Both "retirement" and "passive income" are myths. The economy is all the products and services that people make. If everyone stops working then there's nothing to buy. Creating value for other people is the key to wealth.

You have no idea how badly I needed to hear this and get this explained, thank you.

I wouldn't call passive income a myth, I would rather call it mythunderstood. Just like being "self-made" doesn't mean what it says.

There's a brazilian finance instructor that says something in the line of "The only way of having income is through work (being IC, entrepeneur, etc), there's no passive income, the only thing that you can really do is making a living of an enourmous asset that you earned in your life by working", I think it kinda resonates with your message, I hope to have new ideas to expand my business in the coming months/years, since now my company is estabilished only so I can be a contractor.

Owning real estate for rental purposes is a hellish 24/7 job. Nothing passive about it. Younger and new generation renters are horrible tentants. Older mature ones are getting scarce. In US, renters intentionally treat rentals as destruction projects. Utilities, Taxes are sky rocketing. Maintance and repair costs are sky rocketing. And, most people dont know, in US property management companies make most of thier money through padding maintance and repair bills and by creating "urgent high cost" padded repair issues. In europe its impossible to evict non paying tenants. In Asia, condos are poorly built, poorly managed and require huge property management fees. In the few great markets like singapore, taiwan and Hong Kong they make "renting by foreigners" extremely expensive with stamp fees, high rental income tax, capped rental rates.

I am moving to the beach in Mexico in two weeks. I spent 25 years working my ass off. I will live on the beach in Cancun and keep working my ass off at a job that I don't like anymore but pays A LOT of money. And I work very passively at it. That's my idea of "passive income ". I already have beach front real estate there, and believe me, there is nothing passive about it. Pain in the neck dealing with people, contractors, maids, condo management , etc

Moral of this story “Passive income is a result of many years of hard work building a system that earns money without you needing to spend constant attention to keep it going. And even then, there is a life cycle to that system that will eventually wind down entropically to the point that you will need to work again to wind it back up”

Thank you for calling out the elephant in the room! There is nothing passive about RU-vid or most of the other things that generate income! 💯💯💯

What people dont understand about passive income is that it is income that has been ALREADY established with countless hours of work. Passive is just expanding your business to diversify around other fields. You're not retired. You just turned into a busy manager.

“Winter is coming, need to work” this simple thing says so much about the world.

Andrew this is a great video. After 28 years of working 12 to 14 hours a day 6-7 days a week; I now trade options. My decades of savings and learning about investing over the 50 years has put me in a place to work 6-8 hours a day, six days a week. Nothing is passive. You must work and continue to learn. Develop a wealth building and generating system. Keep up the good work!

If you want to live on a beach in mexico, the easiest way to start is to find a job or start a company on the beach of mexico. Surf/sailing lessons/ renting out sailing boats / canoos, etc etc etc.

This is one of the best videos you've posted, and that's saying a lot.

Good message my friend. I was a truck driver and lived in my truck for a year and didn't go home. I kept working and saved all my money. But the whole time I was learning on line about the stock market. Now I travel all over the world and trade stocks on line. I'm 45 and have been traveling for 5 years.

Positive cash flow is the key Earn - Save - Invest - Prosper

Thank you, Andrew! I’ve been an entrepreneur for 45 years. I started with nothing, and over many years became fairly well off. Then Obama showed up, weaponized the IRS against conservatives, and put me out of business! Understanding business, and the nature of business, I couldn’t agree with you more! I’m trying to see my way clear to leave America! It no longer reflects my values, nor does it honor hard work and sacrifice. Hopefully I’ll get there one day. Cheers

Andrew, I have watched a lot of your content, this is your best video yet. For those that hustle every day to build their business (my partner and I have been working our tails off for 8 years), this was very much needed. For anyone else working hard to build their business, keep pushing, you’re not alone.

Often see Airbnb called passive income. But they also talk about setup, dealing with guests, repairs, managing cleaning staffetc etc - definitely not passive.

All investments need to be managed to stay on top of micro and macro changes

I liked this one: "...Warren Buffet is in his 90s and still working hard like he's in his 20s" . Passive in come is not so passive afterall

The closest thing to passive income is buy a property, rent it out and pay a decent management company to manage everything..That's it.

Passive income is having tens of millions or more dollars earning a dividend. You need wealth first.

Crypto investing is not at all passive investing. I have been doing it siince 2015. To keep your money in crypto you have to make sure assets are safe against hacks, theft, scams, and bad actors. Also you have to make sure your computers, software and hardware wallets are up to date with the latest changes in software and industry standards. Thank you for a great and informative video.

Most excellent episode Andrew! Finally some truth and common sense into all these people misleading so many other slothful folks who want to make alot of money doing nothing. I work 5:30am though dinner and often part of the weekends…nothing passive about success…passive income is as you say…a myth.

I never thought about the entrepreneur vs investor angle before. Thinking about starting a business and all the interpersonal work it requires makes me break out in hives. The idea of spending three hours on an investor conference call gets me excited and engaged. Thank you for the insight!

Money is a responsibility, there is no passivity.

Great video, please make more videos about wealth in general.

Nice video. But I would not say that passive income is a Myth. I worked really hard the last few years and left the corp world a year ago. I bought several rental properties in the past few years and paid off all the mortgages. Now I work 5 hours or less a week. My passive income is more than my corp income used to be at this point. I don’t have any type of debt. Love my life because I can manage my time as I see fit while having monthly income. I still believe passive income based on my current life style. I travel quite often and lead an active life not related to work. I feel blessed at my current situation due to passive income.

Honestly, NOTHING is passive when you’re talking about income. Yes, you can get a bucket of money (or Bitcoin) and put it in a closet and draw down on it to fund your lifestyle, but ANY income generating asset is active. Houses need maintenance; tenants need managing; dividend paying stocks require work being done by the company you invest in; managed index funds require managing. What we describe as being passive IS being actively managed by someone and there will be a cost that’s associated with that management. Your job is to find a balance between what you do actively, and what you outsource (and pay) someone else to do. Sure as anything, if you expect to be paid to do nothing at all, either you are accepting there’s an opportunity cost associated with the work that IS being done, or you have no problem with no growth (and therefore no income) on your investment.

As a real estate investor for over 25 years, I absolutely love it but, it is very, very far from "passive"! The RE courses are a joke.

Excellent points. Agree 100%.

Very interesting video. I was just talking to a friend about this very subject. I am close to retirement and also a more recent nomad. I keep saying that I don't want to work so hard anymore, because I want my free time and less stress, but when I think about the free time I'll have, I'm continuously try to fill the future void. Strange paradox.

The Dutch with 600 years of historical investing have a tremendous amount of passive income. The Heiress to the Heineken fortune does not work nor has any of her ancestors since the 1600's has had a formal job. Passive income exists for a few lucky ones who inherit an income stream. For the rest of us, there is work

I find MLM Co's being the largest culprit regarding this. I used to be with an MLM co for yrs (not Amway) and for 4 hard yrs work my tail off to get nowhere and then the Co closed down. I then joined a different one which I was really successful at and then went through a divorce. One video on the myth of MLM is the mathematics of it and I even knew that at the time I was in them, yet the focus is of utmost importance. I knew so many ppl in several MLM companies and got nowhere, or made tidbits here and there instead of a strong income from just one. Even with my online business now I have ppl asking me to join them in doing their thing and I simply don't have time so I just tell them, no thanks. Mr. Myagi in Karate Kid said it best....you karate do, yes; you karate do, no. You karate do just so, squish just like grape.

This was a really insightful video, and I’d never considered the entrepreneur vs investor personality traits being binary. Trying out my own ventures has often led to me being outside my comfort zone and hasn’t always yielded the results I’d hoped for, whereas making investment decisions have come a lot more natural for me. Thank you Andrew and team 👍🏻

Excellent…as always. Very to the point and eye opening for most. Lot’s of people start off very energetic and determined but are easily misled by listening to those who paint a picture of the “Mexican beach” then get caught in “alternate options” of getting there.

This is so good and *necessary.* Thank you Andrew!

Only way to live on passive income is to have a percentage from individual business entities. I work about 4-5 hours a week, and get multiple 6 figures. My income comes from business entities spread over 20 countries, over 20 years. I dont have any employees, no liabilities, no office etc. As of this summer I worked about 5 hours all together.

Great video!! As a fellow 8 figure guy, I agree 100% with everything said here! Terrific work Andrew.

This is a good one. Money will not just fall from the sky by itself. There is always something to take care of and economical structures change. What worked 20 years ago is now irrelevant.

What I call passive investing is my savings earning money for me (earned money without physically working for another person). I see the point that as soon as I have a portfolio of dividend stocks, I now have a job of dividend investor, but it's something that can be done quite easily off the side of your desk. I started in 2020 and "bought into" the correction with an investment account that was mainly cash and now I have a sizeable portfolio of dividend stocks that provide income. Being that I still work at a "real job," I use DRIP and reinvest my dividends. I don't min/max this stuff at all and I my investing style is centred around finding 20 good dividend performers and holding them for the rest of my life. You can't really go wrong with this and no it doesn't take that much effort. I have an income in mind for retirement and right now, I'm about 25% of the way there. This is with a portfolio of my own savings and does not include my pension account at work which will one day be converted into an income stream. I also anticipate inheriting money and property which will also be converted into an income producing investment. AS was said in this video, I could either take the money I've saved and bought frivolous nonsense or I could buy dividend stocks. I think of dividend stocks as my "employees," all of which earn income for me.

I stopped the video in the track how to become an entrepreneur, there is one thing I do not understand (I am still a rookie in this realm, this my first time on this channel btw) is that whether you’re an investor or entrepreneur, you need money first ! Where does that money come from ? You have to be something else before getting of these paths and like you said in the beginning not everyone came with a heritage or stuff

I have watched quite a few of your videos and I think this was one of the best! I think some of the others are more motivating for me to get into your potential customer bracket and this one was more knowledge that I could use right now. Thanks

Thank you for this video. I have been posting my teaching videos for the past 4 yours and am now monetized on one of my channels. I have 30 years of knowledge that I pass on to others for free and do it so that I might offset some bills later in life when I retire - not a get-rich plan at all. Hard work is the way to go and hopefully, it is in something you are passionate about. Lining someone else's pocket makes them rich and you are just hoping to get there.

Right on Andrew - I focused on 2 income streams and its served me well, focus instead of diversify.

To distill this down the best thing to say to these people is: if it's so easy everyone would be doing it! The passive income mentality is fine for someone looking to maintain wealth but you will not make significant gains going down that road!

This is 100% right. Passive income does exist, but requires time, money, and skill to create it

absolutely correct. Work hard, be in the right place at the right time with the idea/product to match. Most wealthy people have failed alot before they finally found success so it is the concept of perserverence when other fall by the wayside that differentiates them. Biggest hurdle is finding the idea/product from which you can build the business.

In regards to the "becoming rich" segment, I don't want to be rich, I just want to be sustainable enough in my own expectations to live out my youth, not when I'm old enough to really crack my back the wrong way. But I get it, society isn't that giving anymore to be frank. So for me, although I'm aware there is truly no such thing as passive income, I would still jump that ship and sail with it. You only live once you know.

True. What comes to mind are when the sitcom show The Big Bang ended, all the actors gets Royalty checks .that's as close as passive income it gets lol

It's not passive income. It's front loaded income: a lot of work at first with less work later.

Thank you for your thoughts!! Time well spent :)

Just a reality check here on this topic, while a passive income isn't a guarintee, my mum's house in Sydney was earning as much as her teaching salary each year... When she sold it, she was able to retire comfortably on that. So it's about having your situation set up correctly. It's of course out of most people's reach, but for those who already have wealth, good portfolio management can make you bank. Particularly a really good crypto gain.

I never liked the idea of “not working” it’s such as horrible way to view life.

I think real-estate and dividend stocks are the closest thing to passive income and you need to be intelligent and spend alot of money to get them going and keep them going

A better term is RESIDUAL income, not passive.

Passive income is only a myth to those who can't figure out how to make passive income. I spend a bunch of time upfront to build web properties that operate themselves, after the initial build they are definitely passive. I don't run ads or do marketing, I don't have customer service issues, I don't have inventory- I don't do anything other than look at the new sale notifications as they come in on my phone.

When one can live off the interest alone .. that’s passive income

Gary Vee will never be a legitimate source in my book. You don't get born into an already existing successful business (the hardest part of becoming an entrepreneur is getting started) and then get to lecture everyone on why they're poor and you're rich.

People have a business mind or a customer mind. Watching a get rich quick video the business mind is interested in how the Tuber is selling. The customer mind is falling for the pitch. Business mind is always selling. Customer mind is always buying. The business mind is unlikely to ever be happy on a beach, at least for very long. They enjoy making money more. IMO as soon as a person says they want to retire to some beach I know they're a customer.

Most of the wealth transferred from people without capital to people with it comes in the form of working jobs to pay rent to a landlord. The landlord can't be completely passive, no, but obviously the work required to pay your rent vastly exceeds the amount of effort your landlord spends managing your specific unit. If this were not true, no landlord could ever own 100 units. I can buy a REIT and collect 10% completely being out to lunch. Maybe some years it's less but basically it works. The *average* wealth in the US is 500k, which is, probably not coincidentally, about the price of the median home. I can stick my money in an index fund and collect 4% or whatever with no effort. At all. Maybe it's not the best possible return, but nevertheless, it's income. If I start out with 2m, I can spend the rest of my life not working while other people work to feed and clothe and transport me. When people say "I want to escape the rat race" or "I want passive income," yeah, maybe they're lazy, but part of it is also just not wanting to be a debt slave and see half your income go to a landlord for the privilege of living in their property. All wealth is accumulated through a mixture of entreprenurial ambition/grit/brilliance, luck, and theft. But, once you have it, it all works pretty much the same way! You own physical stuff or intellectual property or organizational structures (at its most abstract) that other people need in order to make money to stay alive. They can theoretically scratch at the dirt in the taiga, or go around collecting recyclables or coins off the ground, but almost all other productive activities require capital to combine your labor with, and so, they have to rent that capital from you. The two of you are collaborating to create something of value, but by definition, the owner of the capital is not contributing as much of his labor. It would be fair to say that certain capital requires more active management than others. If you are giving bootleg haircuts, your scissors are capital but you won't make a red cent without picking them up and cutting hair. It's not scalable. You can't outsource it. Whereas, some covered-call fund that sits in a trust and pays an executor to dole out an income into the bank account of a profligate scion is about as close to totally passive as you can get. But I want to point out that this passive scion's house, if he owns it, is creating income so passive (in the form of rent he doesn't pay) that he doesn't even notice it! I think *all* of us would like *this* kind of passive income. And it seems kind of crazy that just to break even against capitalism in the US, you do need a net worth of 500k.

The best way you're going to make money is by working, and millionaires can have 7 streams of income because they are rich, they never say if they had 7 streams BEFORE they were a millionaire. You gotta have something before you can diversify it lol.

I'm at a point in my life where hearing this was super useful. Thank you.

Thank you for this video. I suspect MANY people around the world, not just in America, need to hear this!

You are so intelligent and passionate about your work and what you believe in it’s refreshing. Best to you!

Oh. Gary Vee still talks about his lemonade stand when he was a kid. 👌

Never heard of flare networks.... The future of finance

Thanks for saying this Andrew...it needs to be said.

"...they're looking to 'learn the secrets of the rich' when really the secret is working hard." Not that it's never been said before. Many honest and successful people have said it, but well said! Thanks for the honesty.

I think that last point regarding fulfillment with the lottery example is a really interesting take. Don't know if I'd feel that way, lol, but I did feel it for a bit, a sense of un-fulfillment at one point when I made a boatload of money on computer, without literally having to get out of bed. There is indeed that sense of worth you question about yourself, true worth as a human being.

My brother who has never started a business, sold anything and has been a gig worker for the past 20 years BEFORE the gig economy gave me the unsolicited advice that this should be what I chase. Needless to say , I ignored his advice because I know which starter pack book he got that from …

To me, the definition of Passive Income is interest earned from investments / dividends. Money that is earned without a person having to work

Thx for telling about the guy who said he was bad at entrepreneurship of which I am also not good at doing. I am good at saving, investing, & working hard in graphics, video, & riding motorcycles.

This is a good talk. I see too many young ppl nowdays wanting to have a good life without working / any effort.

Really Good Video, When I exited my businesses I ended up still working as CIO to find Investments, do the DD then monitor Investments and then Hire a FInancial controller and start to build out a family office, unless I wanted to put the money in Term Deposit there was no such thing as Passive Income. However, Income streams can be generated from Investments that still need to be managed either by yourself or a third party like property managers.

You nailed it Andrew! This should be helpful to anyone that watches it. :)

The true formula is to put in the necessary work, to achieve the maximum dividends with the least amount of effort. It will never be true passive

Thanks, I really appreciate your direct honest opinions and take on this subject. As one of these "sloth" types everyone is bashing in the comments, let me give my perspective. I'm 37yr old, I'm successful in my career making $180k living in Manhattan. However, I am miserable. I hate working at my job. Before hearing your perspective, I think simply assumed that because I don't have any passions, that there simply isn't anything that I can be motivated to wake up and do everyday. So for guys like me and that person who asked the question at the event, in our heads, passive income is our only hope. I think the biggest thing I am taking away here is that in truth, my only real hope is finding something I can become passionate about. That's what I should be focusing on. Because even if I win the lottery, what would I even do with my free time?

i built a website at 18.. automated it and it runs itself.. i have not worked in 30 years. my entire job is checking my bank balance. a billing company handles billing and customer service. my web host keeps the server up. my advertisers receive commissions so do all the advertising.

Passive income doesn't mean you can't have a business where you work for the money the business earns. Warren Buffet doesn't work because he has to-- he works because he enjoys it. And he's right-- people can learn to earn money while they sleep, in other words, passive income. It is not a myth. It just means investing money in certain places that earn income without having to work for it. Ask Robert Kyosaki about passive income. The overwhelming majority of his income is derived from his investments which produce passive income.

There is lot of people, who’s only work is check, that rent money is arriving to account.

Best video on the internet.

Best video yet, and all the rest are good. A lot of religious-minded people waste a lot of time simply waiting on God to deliver their wealth but this is unfortunately a misunderstanding, God only helps those who help themselves, there are plenty of other passages about the necessity of work and reaping what you sow. We are all under the laws of the universe the same as we are under the law of gravity, for example. Removing victimhood allows you to have a positive mindset, which is necessary for action and progress. I think the meaning of the term 'passive income' refers to the multiplication effect via automation that occurs when you organize a system to produce more units than you could produce by yourself alone. So in that way you're getting free money, but the energy put in has to have been enough to make the system that great. Victory in preparation.

I vouch for the RU-vid channel being about the LEAST passive thing possible😆