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Getting into the right Mindset

by L.D.Vinci | Published August 8, 2017 | Edited: August 15, 2017

We are all in the same situation

     We aren’t happy in our current job (pay, stress, lack of passion)
     We spend very little time with our loved ones
     We want to achieve financial freedom (pay off bills, mortgage, etc)

I was experiencing the same problems in my life at the age of 32. Having a family of my own (wife and a kid) made it impossible for me to just up and leave my work and try to start another career. I needed a method that would make me some extra income while I remained at my full-time job, but was also scalable so that I could eventually get it to replace my salary or beyond in the future. The goal was to find a source of passive income which would yield me a positive net income, month after month, with minimal investment of my personal time. I did my research and learned from a lot of smart people who have already walked the path and done very well for themselves in many different streams of passive income.

When we hear “passive income” we think “making money while we sleep.” This sounds great! Who wouldn’t want to make money and sleep? I mean each one on its own is satisfying enough but to do both simultaneously is just borderline too-good- to-be- true. Well, I hate to crush your dreams right off the bat but passive income is, in essence, too good to be true because they aren’t 100% passive in reality. Even if money grew on trees, you would still need to plant it, water it, harvest it, protect it from the elements, etc.

Most mentors around the net will tell you things like “I made $340 a day” or “I made $10,000 in a month” and then proceed to show you proof of their lifestyle (e.g. Lamborghinis, Vacation pictures, bank statements, etc). This method of grabbing your attention and giving you a sense of envy is so cliché that it usually turns my interests off. I gravitate more towards the mentors that seem more down to earth and genuine in their passion to help others succeed. This is the very reason why I am writing these free passive income guides. I want to show you the realistic numbers you can expect from different forms of passive income not the best case scenarios. I want to show you how much work it actually takes to reach certain points in a passive income plan not just my most recent bank statement. I want to encourage you throughout your journey by showing you that many others have been there and done that; just because you didn’t make “$10,000 on your first month selling on Amazon” doesn’t mean you have failed. I have tried various passive income tactics throughout my adult life. I can give you my first hand experience on each one, and I can honestly say that there is nothing I have tried that made me anything more than $100 on my first month especially when you are starting from ground zero. Why? Because no one ever tells you about the leg work required in order to achieve that one month sales invoice they flaunt in your face. In this installment, I want to be able to guide you on a realistic journey of what is actually takes to start to earn passive income. We will do it together and I will show you the things that other mentors do not talk about.

"To construct a tower that can scrape the sky, you must first start with a stable foundation."

Mindset

To construct a tower that can scrape the sky, you must first start with a stable foundation. Getting the right mindset is very important when you start considering other sources of income outside of traditional salary based jobs. As a society, we are trained since birth that money is made strictly on a per hour basis, and if you want to increase your wage you will need to invest in education and/or climb the corporate ladder. We watch our mothers and fathers leave for work early in the morning and return late at night and wire our minds to believe that this is the norm. When I ask someone, “How would one make more money while still working their 9 to 5 job?” Most people respond with, “Get another part time job.” Why? Because most people either don’t know of other options out there or are scared to stray from what “making money” means to them. We have to reprogram our minds to think like entrepreneurs.

Entrepreneurship is commonly known as the activity of starting your own business, but the full definition shows us details that have been lost over time.

Entrepreneur is defined as “a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.” [1]

I want you to pay special attention to that last part of the definition – considerable initiative and risk. Entrepreneurship is not a get rick quick scheme that everyone wants to have you believe. You must understand before getting into any type of passive income that:

  1. You won’t start earning six figures overnight, most likely not even in the first 1-2 years
  2. Nothing will be a straight forward “you do X and you will see Y in return”
  3. There will be many points along your journey that will tempt you to give up
  4. You will invest a lot of blood, sweat, and tears at the beginning. For example, staying up late to finish a project is very common
  5. Mistakes will be made and money will be lost. Your job is to learn from these mistakes.
  6. Your journey will require an extreme level perseverance and will power

I was very lucky to have grown up in entrepreneurial environment. My grandparents, form my mother’s side, ran their own food stand. My grandparents, from my father’s side, dabbled in purse manufacturing, mining, fireworks, and even day trade. My very own parents had many different stints including starting a uniform manufacturing business and running a small shop in the flea market. I started to help my parents at a young age making brochures, creating websites, helping manufacturing. I know the hard work my parents put into their businesses; I experienced it firsthand. My father always said, “Even after enduring all the hard work and stress, I would still prefer to be my own boss than to work for someone else.”

Entrepreneurship is not for everyone. Estimates claim 80-90% of start-ups fail, and I believe that this same metric also applies to passive income start-ups as well. The difficult barriers of entry (obstacles keeping others from entering into the same industry) are working in your favor because if it were easy, everyone would be doing it. Pursuing passive income with the right mindset already put you above everyone else because you have braced yourself for the difficulties you are going to face. You are not planning for “if this will happen” but instead you ready for “when this will happen.”

Give yourself realistic goals. Don’t expect that you will get the same results as that guy claiming to have made “$10,000 on his first month selling.” First, the individuals claiming these types of astronomical numbers is most likely using that type of attention grabbing headline to get you to buy into their courses or mentorship programs. Secondly, I would be willing to bet that their “first month” was actually NOT their real first month, and they actually have experience in passive income for possibly years before making that first $10,000 per month. This is your first rodeo, so you should set humble expectations for yourself. When I first started, I told myself that if I was able to make a measly $50 to $100 net profit a month, then I would consider the venture a success. Remember, the experience you obtain from being able to achieve any amount of positive net profit is already valuable in itself, and all you have to do moving forward is to scale up your process, products, etc.

Your spouse’s mindset is also another aspect to consider. Very few spouses will disagree with making a little side income, but remember most people do not have the entrepreneurial mindset. When your spouse agrees with your plan to make extra passive income, he/she does not completely understand the sheer amount of time and hard work required at the beginning. Be sure your spouse is aware of the commitment.

Understanding the market:
Passive Income Streams

It’s time for some background information. There’s a lot of information on the web that will try to convince you that one specific passive income stream is superior to all others. I do not believe this to be true. There are actually quite a few different sources of passive income available to you, so you must understand the market and gauge which method is right for you. There’s ecommerce, CPA (cost per action), writing articles, writing books, renting property, and short term rentals just to briefly name a few. If you love to write “how-to” articles or books that teach people new things, you may want to explore the self publishing method. If you like to sell physical items that you think people would enjoy, then maybe e-commerce is right for you. Maybe you like interacting with people and making them feel warm and welcome (short term rental). Make sure you put in adequate research before you make your decision.

“Why is passive income more desirable over say, traditional full-time jobs?” Short answer - scalability.

Individuals new to passive income will always ask, “Why is passive income more desirable over say, traditional full-time jobs?” Short answer - scalability. We can compare just income differences to illustrate what scalability means. Let’s say you make a little more than the census bureau's’ reported average annual salary of a person in the US for the year of 2016 - $60,000. We can also assume that 25% of that will go to tax, social security, Medicaid, etc, bringing your net income down to $45,000. We can add in a realistic 1% raise year over year because you aren’t going to get a 10% raise every year for 25 years. After working 25 years at a job, you bring home about 1.27 million dollars (assuming your job is awesome and you never quit or get fired). Now let’s compare that to a passive income stream. Say you had a product selling online that brought in a modest $1,000 a month and a blog site that made an average of $500 a month. These two passive income streams would make you a whopping $18,000 a year. “Great, that’s less than a third of my 9-5 salary!” You might be sarcastically muttering. But consider this, once you set up a passive income stream it will basically run itself with minimal intervention. After you get a product listed or a website created, what’s stopping you from scaling up to 2 products and 2 websites? At 10 products, you’d be bringing in approximately $10,000 per month assuming conservative $1,000 gross revenue per product. That pretty much already surpasses your $45,000 net income from a $60,000 salary, and we haven’t even counted the revenue generated from your 5-10 blogs. Furthermore, you could invest part of your profits back into additional passive income streams like real estate rentals. Now you understand the beauty of scalability! When you work a regular job, you are trading your precious time for money. There’s no way to clone yourself or double your income in a matter of years. You are locked into a fixed amount of money you can make in a lifetime and it will be next to impossible to break beyond that ceiling. Don’t let a salary define your value! Break away from this conformity and do something better for you and your family!