The Passive Income Mistake Many Marketers Make!
The topic of wealth strategies takes me all over the world to speak because wealth strategies cross
over international borders. I just returned from Canada last week and next month I’m on my way to
– The Big CB Passive Income Mistake
At the last seminar I spoke at, I met a gentleman with a question about his wealth strategy. His
situation was not unfamiliar to me, I’ve heard it many times, so I knew exactly what the mistake was
in his wealth strategy before he even finished.
I’ll call him Pierre – the name changes but the story I hear is always the same. Here is what Pierre
A few years ago, Pierre started his investment plan to generate passive income because he knew
that passive income was his ticket to financial freedom.
Pierre earns $150,000 annually and is able to set aside $30,000 each year to invest.
In his first year of investing, Pierre put his money in investments that generate passive income at a
rate of 5%. After his first year of investing, Pierre is thrilled about the $1,500 of income his
investments generated and he continues working and investing $30,000 every year.
Pierre is now a few years into his investment plan and realizes that it will take him over 30 more
years to have enough income to replace his earned income. This realization has Pierre spinning
because he thought he had a sound investment plan.
As I mentioned, I immediately saw the mistake in Pierre’s investment plan.
I call it the big passive income mistake and it can set a wealth strategy behind by years.
Pierre didn’t see the mistake, and honestly, most don’t. At first glance, it seems Pierre is doing
great by following a sold plan of investing $30,000 every year. But let’s think about what Pierre is
trying to do. Pierre is trying to create massive passive income, meaning he is trying to generate
enough passive income to cover all of his expenses.
With his current plan, Pierre is generating passive income, but not massive income.
What Is The Big Mistake?
Some people think the big mistake is the 5% rate of return, but it’s not. If Pierre had $3,000,000
and invested that at a 5% rate of return, he would have $150,000 in passive income. With that
amount of capital, the 5% rate of return is not the issue.
And that is the big mistake! Pierre needs more capital!
The big passive income mistake is investing too soon in assets that generate passive income. Too
soon means the amount available to invest (the capital) isn’t enough to generate the passive
How To Correct This Mistake?
To correct this, the focus should first be on generating enough capital. Once there is enough capital,
then the focus can shift to generating passive income, and at that point, it will be massive passive
income because the amount of capital is large enough to generate the desired amount of passive
Instead of jumping from earned income to cb passive income, Pierre needs some stepping-stones that grow
his invested earned income into the amount of capital he needs. Once Pierre has grown his
invested earned income into his target capital amount, then the focus of his wealth strategy can shift
to passive income investments.
– Reduce the Risk in Your Wealth Strategy
One of the ways to reduce the risk in your wealth strategy is to increase your knowledge. Think
about how Pierre’s wealth strategy was impacted by not knowing the formula to create massive
income. Where could Pierre’s wealth be if he had followed the massive passive income formula
from the start?