Sep 10
15

No Longer in Pursuit of Passive Income

17 Comments

by Julie Broad

After reading Rich Dad Poor Dad in 2001, we decided we had to get our money working for us. Specifically we began to pursue ways to increase our passive income. Since we both had a mutual interest in real estate, Dave and I chose rental properties as our primary source of passive income.

Not a bad plan …

The only real flaw in the whole plan was believing that passive income is possible in real estate.

Passive income leads you to believe you don’t have to do anything and you’ll make money. That kind of thinking can get you into big time trouble as a real estate investor. In this video from our 31 Real Estate Investing Video Series I share my thoughts on passive income and why we are no longer in pursuit of it.

p.s. Today we close on the 70′s house!! When I have a minute I will update you on the reno project and on what happened with the other deal we had an accepted offer on (we’re not buying it … I will tell you why next time!).

p.p.s. There is soon to be a Canadian Real Estate Blog Carnival – YEAH!!! I am pretty excited about this. I’ve been participating in the Carnival of Real Estate for awhile and really enjoyed hosting it last year (which, I of course, did in a Canadian style!) but I am pretty pumped to have a Canadian version. There are actually quite a few cool Canadian real estate bloggers out there right now and I think we’ll get some great contributions. I’m already signed up to be the third carnival host – so you’ll see that here at Life as Real Estate Investors on October 30th!

Get Your Free Real Estate Investing Starter Tips Guide Right Here

When you sign up for Rev N You with Real Estate's free newsletter - jam packed with resources, tips, tools and support for your success as a real estate investor.
Name: 
Email: 
 

This entry was posted on September 15, 2010 at 8:56 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted in Great Books Investing Real Estate Investing Real Estate Investing Video Tips by Rev N You 17 Comments

17 Responses to "No Longer in Pursuit of Passive Income"

  • Shae says:
    September 15, 2010 at 12:34 pm

    Great video, Julie! I like to define passive income as “income that requires minimal attention from you and yet still pays you.” Basically you’ll get much more (ROI, financially speaking) from it then you have to put (time) into it.
    Shae´s last [type] ..4 Simple Steps To Getting Private Money

    [Reply]

  • Brooks says:
    September 15, 2010 at 7:33 pm

    Haha, Rich Dad Poor Dad inspired me when I was a senior in high school! I even mention this on the ‘about me’ page on my blog.
    But, I completely agree with you —- truly passive investments come long after you are comfortable with your situation and where you stand in life with your goals, debts, etc. — looking forward to them one day, but for now I’ve got to grind!
    Brooks´s last [type] ..Entrepreneurial Real Estate

    [Reply]

  • Julie Broad says:
    September 15, 2010 at 10:49 pm

    Thanks Shae!! I now refer to it as streams of income – not so much passive – so your definition definitely works.

    Brooks – thanks for your comment. I think the vast majority of folks got their start due to Rich Dad Poor Dad. It’s pretty impressive the impact that book has played on a lot of our lives.
    Julie Broad´s last [type] ..No Longer in Pursuit of Passive Income

    [Reply]

  • [VIDEO] Real Estate Investing: Should Earning Passive Income Be Your Main Goal? | Real Estate Investing News Watch Blog Aggregator says:
    September 16, 2010 at 10:54 am

    [...] [VIDEO] Real Estate Investing: Should Earning Passive Income Be Your Main Goal? Posted by: david | Category: Real Estate Investing [...]

  • mobilehomegurl says:
    September 16, 2010 at 1:06 pm

    Nice job on the video Julie!

    I think what you say really holds true because it’s so crazy how people do a major misread of Kiyosaki’s (along with some other books) work.

    Honestly, I think it’s our society and our culture today – people just don’t value the notion of hard work. And, I think it’s even more apparent with the younger generation.

    People want to make money easy and think you don’t have to do anything to do it. With the internet, I think it’s reinforced this notion even more as there are many who want to make easy money through the internet without doing anything. It’s insane!

    What people don’t realize is that being an entrepreneur and having a business takes work – a lot of work. And, it’s important to constantly monitor one’s business despite how wealthy one gets. Those who fail to do this have lost their wealth.

    I think your video really touches upon the notion of work and how important it is to keep tabs on everything no matter how wealthy one gets. I heard that after every concert, the first thing that Madonna does is go over the ticket sales with her accountant and makes sure she gets paid her cut of the proceeds. That really says a lot – the person who has the most interest in one’s business is that person and no one else.

    Thanks for sharing your thoughts Julie, I enjoyed the video! :)

    [Reply]

  • Julie Broad says:
    September 17, 2010 at 1:40 pm

    Rachel – how old are you?? Sounds like my Grandpa “Honestly, I think it’s our society and our culture today – people just don’t value the notion of hard work. And, I think it’s even more apparent with the younger generation. ”

    Haha!! Not that I disagree with you at all!! I think so many things have become instant (just look at the foods in the grocery store as an example!!) that a lot of people have come to believe wealth should be instant too. And with the lottery it is – but even with that – stats overwhelmingly show that it’s easy come easy go. Most lottery winners end up worse off than they were before they won.

    Hard work is what it takes – so find work you enjoy so it doesn’t feel so bad. :)

    As always Rachel – I really appreciate your thoughtful comments!
    Julie Broad´s last [type] ..No Longer in Pursuit of Passive Income

    [Reply]

  • mobilehomegurl says:
    September 17, 2010 at 11:13 pm

    Oh, haha Julie! :) I know, seriously – many people say I don’t even act my age at all. I really started out at an early age going the entrepreneur route and all. But, I guess I’ve really learned from the wisdom of a lot of folks (including successful business owners) who I’ve met just by being on the streets day in and day out.

    I guess meeting these people who have gone through the really rough times gives me a different perspective from others who have not. When I hear stories about the tough times (i.e. The Great Depression, the savings and loans collapse, early stages of running a business, etc), it really gives me something to think about and compare.

    I guess most don’t want to hear about hard work, just making easy money. But, it’s something that I’ve come to know and realize through experience. And, experience is much more valuable to me – everything else is just talk.

    p.s. Maybe one of these days I’ll go off and live on a farm to raise my own crops and livestock – simpler times indeed! :)

    [Reply]

  • Rachelle says:
    September 18, 2010 at 12:30 am

    True enough Julie, right on the money!

    Too many people rely too much on a rather poorly paid property manager to “take care of it all” I’m a property manager but in our business they less you do the more you make! As you can see the property manager is always at odds with the owner. The owner wants more service for less, and the property manager wants less service for more.

    Lately I have been trying to do more joint ventury kind of deals where the owner’s benefit and mine are perfectly aligned, but with no luck whatsoever, so far.
    Rachelle´s last [type] ..Landlord Licensing

    [Reply]

  • Julie Broad says:
    September 20, 2010 at 2:28 pm

    Rachelle – the opportunity for a joint venture approach will definitely come up. We have done just that recently. And in many cases I think it’s a great idea for folks because you then share risks and rewards for the property.

    Property management is a tough job. It’s why real estate investors so often hire someone else to do the job.

    Speaking of property management – have you jointed http://www.letstalkpm.com/?

    It’s out of the US but a great gal named Dee is running the site and it’s growing at great leaps and bounds. There are more and more Canadians on the site too. Might be a great place for you to network a bit as well!!

    Thanks for your comment!!
    Julie Broad´s last [type] ..No Longer in Pursuit of Passive Income

    [Reply]

  • Julie Broad says:
    September 20, 2010 at 2:29 pm

    @mobilehomegurl – coming from a farm town I can tell you that growing crops might be simply but holy moly is it hard work. Makes real estate investing look like sitting on the beach. Sure in December you have nothing to do but watch soap reruns on the tv but the rest of the year you are sooooo busy and when it’s harvest time forget about sleeping. haha!!

    Love your spirit girl!! Hope we meet someday soon.
    Julie Broad´s last [type] ..No Longer in Pursuit of Passive Income

    [Reply]

  • Steph says:
    September 21, 2010 at 5:45 pm

    Great video, Julie!

    I remember buying the Carleton Sheets course back in the day and thinking that it would be so easy to just buy a bunch of rental properties and sit back and watch the checks roll in. It didn’t take long after I bought my first one that I realized that it wasn’t as easy as he made it sound. Especially when your tenants move out in the middle of the night and head for Alaska leaving a trashed house behind.

    Still beats a 9-5, though. :)
    Steph´s last [type] ..Flip This Book Club- The Power of Focus Guest Post by Shae Bynes Also- an Update From Illinois

    [Reply]

  • Julie Broad says:
    September 21, 2010 at 9:50 pm

    Haha! Yea Steph I totally understand why you’ve gone the route that does not require dealing with tenants. There are definitely drawbacks to the relationship between a landlord and tenant but most of the time, honestly, good tenant screening goes a long way. Not trying to get you out of wholesaling and back into buy and hold … just sayin’ it’s not that bad. My tenants allow me to make money even when I’m sleeping or watching the new Hawaii 5-0 (so excited about this new series!!). That thought usually makes me feel better even when I am faced with a challenging moment with a tenant.
    Julie Broad´s last [type] ..No Longer in Pursuit of Passive Income

    [Reply]

  • Steph says:
    September 22, 2010 at 1:08 pm

    Hey Julie,

    I didn’t mean to come off as bashing a buy and hold strategy. I think it’s definitely a great way to build long term wealth, and as far as the tenant screening goes- when I did have that one rental, my tenant screening process was a joke. If I would have done a background and/or credit check, I’m pretty sure I would have avoided that whole mess.

    Live and learn…..

    :)
    Steph´s last [type] ..Flip This Book Club- The Power of Focus Guest Post by Shae Bynes Also- an Update From Illinois

    [Reply]

  • Linda says:
    September 22, 2010 at 10:06 pm

    Julie, once again you’ve stepped out from the crowd and shown me again why I read your blog and almost no others. Your advice is so spot on. Call it whatever you want but if you let yourself think you can get passive income there is a good chance you could be setting yourself up for a mess. I keep reading you guys because you tell it like it is. I have no delusions that real estate is work but it’s work I want to do because I don’t trust anybody else with my money after I lost most of my retirement funds to the Nortel disaster and the other dot com disasters my advisor put me in. Former advisor that is. Thank you!!

    [Reply]

  • Julie Broad says:
    September 22, 2010 at 11:23 pm

    @Steph – I know a buy and hold basher when I see one. Don’t even TRY to deny it!! :) haha! just kidding!!

    @Linda – nice to see you around here again!! Hope your investments are going well for you! Last time (I think!) I heard from you, you were looking into US investments. Hope that is treating you well. It is quite a bit of work just finding the right deal isn’t it?? I appreciate your comment and your very kind words. You made my day!!
    Julie Broad´s last [type] ..A Little Renovation Tip from That 70′s House

    [Reply]

  • Neil Uttamsingh says:
    October 6, 2010 at 4:39 am

    Hi Julie,

    You raise a good point in your article. As you mention, there is nothing passive at all when it comes to real estate investing.

    I think that as time goes on, and as a real estate investor gets more experienced, they truly realize that passive income with real estate investing does not exist.

    The other cool thing to note is that this is a defining moment in a real estate investor’s career.

    When the going gets tough, and the realization materializes that there is WORK involved in being a real estate investor, most people bail.

    It is the ones who stick with it, and endure through the ups and downs that realize true success.

    For example, if times get tough and investor A bails, and investor B hold the course…25 years from now, investor B could have a completely paid off rental property. Whereas, investor A, would no longer have that asset.

    Great article.

    All the best,
    Neil.
    Neil Uttamsingh´s last [type] ..How To Be A Quick Turn Real Estate Millionaire

    [Reply]

  • Daniel says:
    December 17, 2010 at 8:45 am

    great post, thanks for sharing

    [Reply]

Leave a Comment

CommentLuv badge

 Subscribe to Rev N You