What is passive income?

Alan Kay said, "The best way to predict the future is to invent it." And creating a passive income is one way to make the future more predictable, to invent your own future. If you can take responsibility for the breadth of implied meaning in that one sentence, then you're on the right track.

The financial journey of Joe Polish is an interesting one. It can be seen as a parable in its own right, because it successfully conveys the difference between success and failure – and between millionaires, billionaires, and everybody else:


Mindset.

Now if you haven't read the post about Joe Polish yet, here's a quick rundown:

Joe Polish was a below-average guy who started a carpet cleaning business. Licensed and armed with cleaning equipment and a truck, Joe was ready to make it big. Except he didn't. The huge client base he thought would magically happen never did. Soon Joe was living off his credit cards and struggled to pay the rent. Joe was heading for financial ruin.

Then one fine day, on a jet-ski trip organised by a friend, Joe met a multimillionaire whose fortunes had been made in real estate. Down on his luck and ready to try anything else, Joe asked the multimillionaire what business he could start that would help him make money. Here's what the multimillionaire said to Joe:

"If there are people in your industry making money and you're not then there is nothing wrong with your business. There is something wrong with you. You are like most people I meet who think 'the grass is always greener on the other side'. And if you decide to go into another business, what's going to happen is, you are going to spend the next 6 months, 1 year, 2 years, learning the technical skills of another business, just so you can go out and repeat the same mistakes and bad business habits that caused you to fail in this business. So what you need to do, young man, is you need to FIRST learn fundamental business principles and learn how to make THIS business work. Because once you do that, you can go into any business or industry and be successful in it."

Like I said, mindset. Passive income is a mindset. It is a success mindset. It is the realisation that where you are now in life isn't serving your needs, and that you need to grow out of your current situation.

Growth is achieved through stimulation. Stimulation, in the context of passive income, is learning. Whether you want to go into property investment, forex and currency trading, bit coin mining and related bit coin strategies or gold investment, realise and accept that every successful passive income venture has a high initial learning curve. Be prepared to sacrifice your time, at least initially, so that you can have more of it later.

In his book, Think And Grow Rich, Napoleon Hill writes:

"Successful men, in all callings, never stop acquiring specialised knowledge related to their major purpose, business, or profession. Those who are not successful usually make the mistake of believing that the knowledge-acquiring period ends when one finishes school."

Equally important, be humble, and be willing to learn from others. The wealth of material available on the internet today has made it possible for anyone to self-educate on just about every imaginable subject. But within this wealth of information lies a danger, too: that which should be studied with fervour is often ignored in favour of that which seems more appealing.

Acknowledge what you don't know, and humbly accept the guidance of those who do know. This trait is found not only among those with generous second and third income streams, but also among the world's millionaires and billionaires.

"Hillary's impact on the world has been colossal. There was a fear that to climb beyond 28,000 ft, your brain might explode or you'd go blind. He had a terrible mental barrier to overcome: the sheer unknown as well as the frightening drops. For this reason, his and Tenzing's ascent has to be the finest moment in the history of human endeavour. He was a beekeeper from Auckland, who was 'no shakes at school and a no-hoper at university', so for him to be the first to the summit of Everest was wonderful. He showed us the way, and has inspired everything that I do." – Brian Blessed, actor and Everest mountaineer

So, what is passive income? It's a success mindset, followed by a willingness to know more than you do today, and to be more than you are today. But, passive income is also the humility and wisdom to build on the experience of others.