passive income sources investing not hard

Investing Just Isn’t That Hard….

If you are looking for passive income sources, then investing might be the right one for you. Investing is not rocket science.  You don’t have to be a neurosurgeon to get the basic concepts.  The idea is that you own something that keeps generating cash flow throughout the years, or at least is likely to go up in value. It is one of the best passive income sources out there. But for some reason people are intimidated by developing the skills necessary to find their own winning investments.  Instead they leave it up to the “Experts.”

passive income sources investing not hardBy experts I mean people who’ve made it their job to be better sales people than actual investors.  Wall Street is one major culprit.  Multi-Level Marketing Scam Artists tend to be another.  Each group targets different type of unsuspecting victims with its own unique set of false promises.  Wall Street tends to suck in those terrified of risk.  While the world of MLM tends to attract the greediest, most impatient, or even worse, the most desperate people looking for financial success.

Wall Street’s Zero Sum Game….

When it comes to Wall Street, there is a prevailing school of thought known as the Efficient Market Theory which has infiltrated the business departments of colleges, government institutions like the SEC, and powerful financial institutions.  And while the very best investors on the planet don’t believe in this theory, the mainstream does which has driven the biggest myth on Wall Street.  ‘Risk = Reward.‘

The idea behind the efficient market theory is that because the market is so big, and so liquid, it is at all times correct based on all available information.  In other words, the market is NEVER affected by fear and greed.  It’s NEVER on sale or overpriced.  All times are equally opportune for buying into the market.  And it mitigates the achievements of successful investors by calling them statistical anomalies.  They are simply the lotto winners of the investment world.

Warren Buffet begs to differ….

Of course anyone who is actually successful at investing thinks this is total B.S.  Buying stock is good or bad depending on what you are buying, and how much you’re buying it for.  Warren Buffet puts it beautifully with 2 famous quotes.

In the first he says “Price is what you buy. Value is what you get.”  It implies that there most certainly can be a difference between price and value.

His next famous quote says we should “Be fearful when others are greedy, and be greedy when others are fearful.”  In other words, fearful times can create the best times to buy stocks at a bargain.  And greedy times can create bubbles which smart investors stay away from.

So here is the problem with trusting the efficient market theory.  If you believe it’s impossible to expect more than mediocre results, the best you can do is spread your bets out through over diversifying, and blindly dollar cost averaging.  You don’t know what to buy, or when to buy it, so you just spread yourself out so you can’t get too damaged in any one transaction.  Of course your chances of making anything more than single digit returns on average goes right out the window.  Good luck building a nest egg to retire on when you can only put away a couple hundred dollars month.

Meanwhile, they guys that buy rental properties, hot dog trucks, or even buy and sell gold or silver crush the so-called experts.  These guys put just a little bit of effort into understanding what they are investing in, and making sure they don’t get ripped off, and they are often light years ahead of buy and hold mutual fund investors.  Just a little bit of knowledge can start changing your money making potential in a huge way. You can find the best passive income sources with the right knowledge.

The “Fake it ‘til you make it” cult of MLM

First off, I just want to say that not all multi-level marketing, network marketing, or affiliate marketing companies are bad. They can be good passive income sources.  It’s actually a legitimate business model that has worked well for certain industries.  For example, real estate brokers and insurance brokers will encourage team building by building in residual income streams generated by their team under them.  It makes total sense.  If your more seasoned sales people are closely working with the new staff, it creates more support at the bottom and money at the top.

But in any MLM business that works, there is one key difference from all the ones that have a 97% failure rate……..They sell real stuff to people who just like the stuff they sell. Real Estate Agents do business with a spending based market place.  The majority of buyers and sellers only care about transitioning into or out of a property.  They don’t try to convince every single customer they meet to also become a real estate agent.   In fact many agents wouldn’t even want the competition.

The pure garbage MLMs that I’m talking about are the ones that SELL ABSOLUTELY NOTHING that’s useful to the overall market. These are not good passive income sources. Maybe they have some products that they swear are top quality or cutting edge.  Of course once you visit Amazon, you see that you can get a comparable product for 40% less.  The people joining even know this deep down inside.  But they don’t think about it because they’ve been sold on the idea that they can make way more money than they have to spend.

And that’s the real problem.  If the company doesn’t have a product or service that’s light years ahead of the competition people aren’t going to stick around.  And what’s worse is that every marketer that’s even half way decent at recruiting now has to watch all their people walk away discouraged and let down.  Many otherwise good business people with real potential have seen their reputations destroyed by drinking too much of the Kool-aid. These type of MLMs are not ideal passive income sources.

Most people waste time, lose money, damage their reputation, and even hurt others by buying into the largely empty promises that most of these creatively reinvented Ponzi Schemes keep making.  But people who flock to these programs very often are in a desperate place. They are in transition, or have failed in their plan A.  They are looking for creative solutions to big problems.

The bottom line is, don’t even think about signing up for a business program if the majority of the spenders aren’t in it simply for the products.  You can’t have more wolves than sheep.  The math just doesn’t make sense, and the long failing track record of these businesses pretty much proves.

Finding your sweet spot….

Believe it or not, my goal is not to burst your bubble. In fact, I’m trying to help you avoid some all too common mistakes so that you experience wildly outrageous success. Finding passive income sources is not hard. There are numerous ways you can succeed.  Learning to value stocks.  Learning to read market trends.  Learning to negotiate better deals in real estate or business.  Those are all topics for another discussion.  But I assure you that all of those skill sets are quite attainable once you start looking for them.

The one tidbit of knowledge I will drop here is this.  Learn more about who you are, and how you can help people like nobody else can.  Figure out what wakes you back up after a long day’s work just because you live for it.  Figure out what it is that other remember you for.  These are all things that you may take for granted……because they’ve always been there.  But guess what.  That’s where you’re most likely to succeed.  We all gifts, talents, and instincts that will allow us to stand out and outperform more than any amount of training will.  That’s what you build your business around.  In doing so, so few will ever be able to close the gap.  Niches make riches.  So for right now, focus on finding yours.

Need help figuring how to build up your own passive income?  We can help.

 

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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