Passive Income Part I: What Is Passive Income And Why Is It Important?

Passive Income Part I: What Is Passive Income And Why Is It Important?
March 1, 2016 Admin

Foreward

In the recent article “Ten Everyday Things You Can Do To Help The War In Europe”, we discussed the importance of building wealth and passive income. I have had several readers encourage me to write more articles in this vein, since many of those in our movement are younger guys in their 20’s and 30’s who are passionately trying to leave ‘the rat race’ and quit relying on an employer. I have been fortunate enough to build passive income to the point where I can support myself and my family through my own endeavors, and begin building real wealth, and think every man in our movement should strive for the same thing.

Therefore this is the first in what will be a series of posts on the subject of passive income. It will look like this:

Part I – Introduction – What Is Passive Income And Why Is It Important?
Part II – Men and Passive Income: On Masculinity and Money
Part III – Building Passive Income: Best Practices
Part IV – Example Trajectories To Building Massive Wealth Through Passive Income

All across Europe and the West men are waking up, rejecting the suicidal cultural narrative around them, and preparing to fight back. Building passive income is an absolutely key part of that, and integral to our future.

Part I – Introduction – What Is Passive Income And Why Is It Important?

Most people just think of money as money, and do not differentiate between its sources. They use it to live on, use it to splurge on, and use it to pay on their debts. But as they say, intelligence is the ability to make finer distinctions, and in reality there are three different kinds of money that in our modern society receive: 1) earned income, 2) capital gains, and 3) passive income.

Earned income is what you get from an employer, or as payment for doing some kind of work. If you work for a large company and get paid hourly, salary, or by commission, that is earned income. Capital gains income comes from buying something low and selling it high. This is what house-flippers and stock-market speculators make. Both of these forms of income are taxed at high levels by the government. The final kind of income is passive income, and it has the most generous tax status, as well as being the most important form of income there is.

Passive income is the income of the rich. Not the income of some rich actor or actress, they are just employees making earned income who happens to temporarily be getting paid more. If they don’t learn to stop thinking like an employee they will not stay rich anyway, and they or their children will return to the low-income or middle-class status from which they were temporarily lifted out of. No, passive income is the income of those who know the secret to wealth, which is itself passive income. It is the income of self-made millionaires, and those who build massive-multigenerational wealth, the kind of wealth that changes the trajectory of society.

Therefore it is relevant to us for two reasons: 1) because it represents the ‘best practices’ of the world of personal-finance, that will allow each of us to build wealth, quit working for corporations and governments that despise us, and build financial independence. And 2) because it is the engine of the rich in our society, and to fight back against those in power who would do us harm we must understand it.

Most poor people in America and Europe go their whole lives never receiving passive income. I would wager 99% really do not even understand the concept or importance of it. Sadly one could argue that the middle-class is just as hopelessly inept when it comes to it. For the middle-class in many ways does worse than the poor when it comes to assets (things that put money in your pocket) and liabilities (things that take money out of your pocket).
Your average poor person can’t afford either. They may make 2000$ a month, and with this they pay their rent, utilities, groceries, and at most maybe purchase a car ever few years with their tax refund. They have no money to invest, and no money with which to do something stupid.

The middle-class on the other hand do have the money to do stupid things. They get their 7000$ a month from their employer and pay their expenses- utilities, groceries, probably many meals out and many drinks from Starbucks- and then use the rest to put down payments on homes that are bigger than they need, put down payments on boats they will rarely use, and take trips to Disneyland financed on credit cards. All of these things then become liabilities to them. For a family is no different than a business, and you can break down either’s finances the same. For that boat payment represents a 200$ obligation each month, the mortgage a 1600$ one, the trip to Disneyland a 200$ one. Thus they end up living, and working, to pay interest every month of their lives to massive multi-national corporate banks. They become slaves.

Contrast this with what could have been done, with what someone with a rich person’s mindset would do. For really poor vs rich is nothing more than mindset. If you take an intelligent, financially literate individual and put them into any poor or middle-class persons body or situation, I truly believe they will be rich again within a number of years. It all comes down to the choices we make every day.

A rich person would never have bought the expensive house, they never would have put the down payment down on the boat, and they would have saved up cash if they wanted to go to Disneyland. With the money they would have saved, they might have bought a rental property that brought them 300$ cash flow per month, or purchased several ATM’s (an item anybody can invest in that typically produce 20% returns per year), or some other income producing asset. Perhaps if they are truly a go-getter they would have created and monetized a website that might bring in a little money. They would not be “rich” yet, but think of their monthly income/expense statement. Instead of hundreds upon hundreds of dollars in debt obligations, they would have money coming to them each month. If they continued this for a number of years, perhaps buying one rental property each year, they would eventually be able to quit their jobs, for their passive income would equal their expenses. There are also quicker ways to do it, but this is the same slow, steady progression that has allowed countless families in America and Europe to quit their jobs, and achieve complete financial independence from corrosive societies.

At this point they can also start taking any excess money they may have each month, and reinvest into more income-producing assets, to bring in even more passive income each month.

And if they are conscious, awakened European-Preservationists, just think of all the good they could do….

Note: The primary resources which taught me about passive income and which therefore inform this post are 1) Robert Kiyosaki, author of Rich Dad, Poor Dad and other books in the ‘Rich Dad’ series, and 2) The Richest Man In Babylon, by George S. Clason.

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Comments (14)

  1. Laguna Beach Fogey 1 year ago

    It’s as if you’re reading my mind. Passive income (or in some cases savings) is what will help fund our travels to Europe for the next Crusade.

    • Author
      Admin 1 year ago

      That is certainly my plan 🙂 I say it tongue in cheek but in complete seriousness when self-employment/entrepreneurship gets its most difficult and challenging, it is definitely thoughts about Europe (and my family) that force me forward.

      • Laguna Beach Fogey 1 year ago

        I’m already at that point. I just need to work on logistics.

        • Author
          Admin 1 year ago

          Working on new series about logistics of moving to Europe 🙂

  2. Michael 1 year ago

    Good article well worth pondering over a period of time to form an action plan. You can see why the Consumer Society encourages us into a constant spiral of purchase and debt followed by further purchase and debt. It takes away our freedom and bars us from real life choices.

    • Author
      Admin 1 year ago

      Absolutely. If you get a chance to read either of those books I mentioned in it you should do so they are both incredible.

  3. ProLepanto 1 year ago

    You are absolutely correct. Reclaiming our financial independence is crucial to first severing our dependence on contemporary social structure, be it the hive like government apartment housing that so disgusted you in Scandinavia, and or cable tv and cell phone data plans that have become substantial monthly expenses for most, nvm conditioning in and of themselves; And second to give us the individual virulence necessary to make our growing yet shallow ranks shall we say… influential.

    • Author
      Admin 1 year ago

      Thanks for the comment Lepanto! Yes I think the dependence on debt/the government is even greater in Europe if anything. Many on the left in America hail Scandinavia as a veritable heaven on earth where people’s needs are all met and where everyone leads healthy, carefree lives, but they do not realize just how very deeply in debt most Scandinavians are and the extreme toxicity this creates…

  4. Ogier 5 months ago

    Looking forward to part 3 and 4! I´m at at point in my life, where this is really essential, to become useful for the battle for Europe. So thank you for helping out with direction and inspiration!

    • Author
      Admin 5 months ago

      Glad you liked it 🙂

      I will admit I sort of moved away from that kind of self-improvement stuff on the site since its early days, but I will definitely try to pound out those last two posts in the series for you!

      Should have the article coming out in next week or so. Have or two I have been meaning to publish that I need to push out first.

      • Ogier 5 months ago

        Alternatively, you could just direct me to other articles or books that delves into this aspect. I already listened to “Rich Dad Poor Dad” on your recommendation in another article – Ten things you can do to help the battle in europe, but I´m really interested in getting a lot of examples of the actual practical models of creating an array of passive incomes.

        • Author
          Admin 5 months ago

          Okay very cool I will do my best!

          I think the best ways to create passive income and my accompanying reccomendations are:

          1) Real Estate. Now in my experience people in Europe/Australia/the UK will sometimes read real estate investing materials and say ‘Oh that doesn’t work here’ but I have seen that proven wrong again and again and again. I know there are tons of people in the UK killing it with real estate investing and there is one regular reader of this site doing the same in Germany.

          The best resources for real estate investing are:
          A) Bigger Pockets .com – especially their PODCASTS. When I decided to get into real estate investing I literaly listened to every single episode they had ever created, non-stop, before I did my first ‘deal’. Unbelievable resource. They also have forums, a blog, etc.

          B) Investfourmore.com – Run by an investor and real estate agent in Colorado named Mark Ferguson. The blog is the best resource. Same thing. If you read one article per day on this site, at the end of one year you would know more than 99.9% of the population.

          2) The Internet – Making money online gets a bad rap because there are so many people who are unemployed/effectively skill-less who sign up to try to ‘make money online’. However, in my opinion making money online is almost the same as real estate. 99% of people navigate both housing and the internet without seeing the ‘monetization’ all around them. Once you study real estate investing or making money online, you suddenly see everything in a different way. I used to just navigate the web, reading interesting articles, being clueless of that monetization all around me. Now every website I go on I am immediately aware of those streams of money, etc.

          I have not yet really been successful making money online but haven’t put a ton of effort into it either. It is just a side focus/side hobby. I am sort of learning about it through this site and through self-publishing, and then later on my try to actually start making money at it (not with my focus on Europe, but with something different).

          The best, most down to earth, rationale, legit site for making money online is Smart Passive Income by Pat Flynn. I would reccomend doing the same thing as with Bigger Pockets, just start listening to one podcast per day. At first it will seem like Latin, but as you go it will make more and more sense. You seem to already be pretty tech savvy so you have a huge advantage on me there- I am horrible with tech stuff and had to pay just to have this website created.

          But yeah I can’t remember which episode numbers they are, but on teh smart passive income podcast there is some three episode series where he basically gives an introduction to all the ways to make passive income. I listened to all three and they were an amazing introduction to it.

          I like Pat Flynn’s approach because (just like real estate) the way you make money isn’t being scammy or taking advantage of people but by creating value. So for instance in your case maybe you could have a website designed to help amateurs learn how to create jewelry, with links to jewelry supply stores for which you receive affliate commissions, plus an ebook on amateur jewelry design, plus a more expensive course they can take in which you- a professional jewelry designer- teach them how to make things, etc. That’s just one random idea, but the point is you only make money by helping people, which is something I like.

          3) Small Business – Now these aren’t exactly ‘passive’ at first, but what a lot of folks do is just start a small or even side business, and then eventually hire a manager and effectively only ‘go to the bank’ at that point. Before I got into real estate investing I had actually started an office cleaning business, and while I switched focuses before I got it going, I was attracted to it because it was simple and I knew I could be successful at it (having hired lots of them while being a manager at a mental health provider).

          The beauty is that with the internet, you can literally find business plans/guidebooks/mentors for any small business you might ever want to start. The best ones in my opinion have low start up costs. If it takes more than 2000$ to get started the risk is too big in my opinion, at least for your first one or as a side hustle. There are tons of businesses like that though, and once you sort of get the hang of it all the different businesses are pretty similar. All of them have the same components.

          I don’t neccesarily have a single website suggestion for this, but one thing I will sometimes do (just out of curiosity mostly) is google various small business ideas. So in the past I have researched car dealerships, auto body shops, rent to own stores, etc. Not because I want to start one, but just out of curiosity. As I said you can learn anything on earth on the internet these days.

          Anyway so that is kind of my rambling thoughts on the question. Hope that it is helpful!

        • Author
          Admin 5 months ago

          another good resource is ‘thecreativepenn.com’ on self-publishing and making money online.

          Also financialsamurai.com is very good, on finances, making money, wealth creation, etc.

          I like the idea that even if a certain stream is small, say 50$ a month from an ebook you publish, that just the act of creating it compounds on itself, and once you have several small streams in place, THEN you can focus on growing them, etc.

          • Ogier 5 months ago

            Wow, thanks a bunch, I certainly got what I bargained for. There is reading material for a long time, and the sort of practical stuff I was needing to know, back when I started my now flunked web-shop.
            “3) Small Business – Now these aren’t exactly ‘passive’ at first, but what a lot of folks do is just start a small or even side business, and then eventually hire a manager and effectively only ‘go to the bank’ at that point.”
            See this was actually my intention too, when I gave it a go years back, since I´m probably more a creator than an efficient maintainer, but it didn´t get to that point. I´m of course tempted to give a similar project a second go, since it is closely intertwined with skills I already possess, ie making the products themselves, even though that in a way can also be a hinderence, since I then have a lot more energy on the urge to design, when actually my experience was that selling it is what should occupy most of the time in building such a business. The company who takes my designs are first and foremost brilliant venders and merchants, thats why they are so successful, not just because of their products quality. So there could also be an advantage in going into something that is completely new, hence I would need to really reorient me, and avoid falling into safe-zone habits of just designing the time away. But on the other hand of course, there are an advantage in building a business around something where you already have skills and heart and passion invested, to give it that edge of it being produced from a genuine place in the creator. Many things to think about, and many things to read and absorb. Thank you very much indeed, this was excactly what I was hoping for!

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