The days of working a 40-year career at one job are over. Even if these jobs still existed, is that the life you want for your child?
Why are you sending your kids off to college? Do you know how to make money in today’s ever-changing economy?
If you don’t understand how to make money, how can you successfully push your kids into this environment? We are sending our kids off to war without a weapon. We can do better.
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Today’s gig economy. Social media and YouTube brainwash our kids into believing making money is easy. However, nothing is further than the truth.
Earning a wage outside of a W-2 (9-5) job is more challenging than ever because more people are trying this way of life. Most people will fail because they lack discipline and longevity.
Therefore, 9-5 jobs still serve a purpose today. A 9-5 job’s only purpose is to allow workers to build a portfolio of assets that produce income.
Once you have enough passive income, you’ll be able to live the life of your dreams and do what you wish. I know this is confusing, so I will dive in deeper. You must understand these concepts to offer your children a different path.
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The magic of $5,000/month in passive income. We will help your child earn $5,000/month in passive income for today’s experiment.
Having $5,000/month in passive income ensures they can live comfortably (if single). Going into a marriage with $5,000/month in passive income ensures one spouse can stay home with the children.
What is passive income, and how do you create $5,000? Passive income is money you earn from assets; building passive income should be everyone’s dream.
The world wants us to go to work, pay taxes, and spend our earned income (from a job) on consumption.
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However, this plan is missing one colossal step—buying assets. Therefore, the path is: go to work, pay taxes, purchase income-producing investments (stocks, business, real estate), and spend your passive income on consumption.
What is the difference between earned income and passive income? The main difference is that you have to keep making your earned income. You are exchanging your time for money.
If you don’t work, you don’t receive a paycheck. Passive income comes in while you sleep. You exchange time for assets. These assets continue to produce money throughout the day and night.
You are financially independent when you have enough assets to pay for your lifestyle. You can still work a job but on your terms.
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Books are a perfect example. I write a book once, and it continues to earn me money throughout my lifetime. Essentially, I created a partner that continues to work to build my wealth alongside me.
How does passive income relate to my child? Before your child leaves your home, they must understand passive income.
There are two paths your child can take: become an earned income In-debt-ured Servant OR a Passive Income Hero. You must help them decide very early in their life. Let’s explore these two concepts in depth.
The indentured servant. Once you send your child off to college, they get a job in San Diego, earning $8,000/month (pretty good!).
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Since they don’t have “the information” because YOU never learned, they proceed to rent an apartment downtown ($3,500) and buy a fancy car ($1,000).
The rest is history. You already know the story because this is the path you choose. I, too, started on this path. It didn’t end well for me.
Working every day nets your child $200/month available to save and invest. Every emergency wipes their accounts clean. They spend 40 years in the workforce and retire on social security. Sad indeed.
The Passive Income Hero. In this path, your kid stays home with you and attends college part-time. They understand the concept of passive income and aim to reach $5,000/month in passive income before age 27.
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Your child pays you to rent a room; however, you apply it to their income investing portfolio. They work part-time, start a blog on video games, and rent their car on Turo.
Over five years, they built their blog to $2,000/month, income investing portfolio to $2,000/month, and Turo business to $1,000/month. They have $5,000/month in passive income.
They earned their degree in criminal justice. However, they want to enter this field as someone who interviews criminal lawyers and detectives.
They start a blog and YouTube channel covering the brave men and women who dedicate their lives to fighting crime. Their work dramatically impacts society, but they can work at their own pace.
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Time for a pop quiz? Why didn’t the Passive Income Hero become a cop or lawyer? How did they have the knowledge, experience, and confidence to start a blog and YouTube channel?
That’s right; they had passive income paying for their basic living expenses. Earning money online is tough, but it’s much easier when you have time and resources.
By building their passive income reserves, they bought their freedom from the daily grind. Even better, the skills they learned (blogging, business) directly translate to their new creative pursuits.
A different path. Which path do you want for your child? I hope most parents want their children to have unlimited options and not become indentured servants.
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Here’s the problem; you must also believe in the Passive Income Hero path. Your children can sense your fear. They will also avoid it if you don’t believe in this way.
My kids see me writing books and earning money via roommates; therefore, those ideals are already forming in their minds.
Conclusion. If I only knew the military and government way, my kids would only understand those lifestyles. I would push my kids into the military because that’s all I knew.
I started as an indentured servant. It took me 20 years to learn how to become a Passive Income Hero. My kids can enter the workforce, but with the specific goal of buying their freedom.
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If you don’t use “the information,” don’t expect your kids to either. Understanding and building passive income is a daunting task. It goes against everything they taught us in school.
Our parents grew up in the industrial age, where pensions and government service were the gold standards of success. Those days are over.
There has never been more pressure on the individual worker than today. We can prevent a lot of stress by working as a team. But we must all understand and execute the idea of passive income. Good Luck!
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