So I have read Robert Kiyosaki, Tim Ferriss, Steve Pavlina, and others. All of their prescriptions for how to live the “Good Life” is to break free from the 9 to 5 job and start building systems that generate income. The notion is that stupid people work for money, smart people create passive income sources that make them money continuously after created.
The idea is pretty well captured here: 10 Reasons You Should Never Get a Job – Steve Pavlina
A friend of mine joked once, though that all of Robert Kiyosaki’s books could be summed up in one sentence: Passive income is good.
The trouble is no one gives any concrete advice on how to build a passive income stream. It seems to me that it’s not just that most people are stupid, it’s that much of the things that can be automated into making money already have been. Most of the advice is rather vague, like Pavlina saying “play to your competencies”. I am competent in security, but not enough to be entrusted to design a security system.
I’m competent in wrestling, but I can’t think of a way to make wrestling instruction completely hands-off. I have a major in psychology, but I’m definitely not licensed to practice. My brother is a musical theater major…how is he going to build a source of passive income with that?
As far as I can tell, there are a rather select few areas where passive income can be made:
- Ownership or partial ownership in a business (stock)
- Owning property
- Owning a website
- Creating intellectual property (books, videos, etc.)
Most other income seems to come from time dependent features–i.e. producing something or providing some service. If the system is time dependent, it is not passive. And we’re back to square one–we are the stupid people that Ferriss, Pavlina, and Kiyosaki talk about.
Unless you have a foundation in one of these four areas, it seems you are SOL.
So I pose these questions to you–Do you currently make passive income? If so, what do you make it on? Can you think of any sources that are outside my four categories? How would you suggest I embark on building passive income streams?