Welcome back to another episode of the Rise Up & Live Free podcast. Today, Jimmy and Brad will be discussing how passive income is leveraged income and what that means for you! This is an exciting and somewhat controversial topic.
We believe that all passive income is only a result of hyperactive activity. The way that passive income is described in other financial areas is not reality and simply a marketing term. The reason it’s not real is because it undermines principle.
In this episode, we’re going to dig out the principle of becoming financially free by illustrating the most accurate passive income method. Stay tuned!
“If we want our cash flow to exceed our expenses then we need to redefine what passive income is” – Bradley Gibb
Passive Income Doesn’t Exist
“All passive income comes from hyperactivity” – Bradley Gibb
Jimmy has a great story that illustrates this truth. He often has the experience that people will buy their first home from him and call him flipping out in sixty days. They’re convinced that it’s not working because they haven’t made any money yet. His response is always the same as he tells them they’re in for a long term investment.
Everyone forgets that they’re playing a long game. It’s so important to remember that the principles of wealth building around a house does mean you are becoming wealthier. You just might not see it six months in.
Numbers can lie to you. When you’re looking at the numbers spread out over the course of several years, you’re looking at a smoothed-out picture. When you zoom in the details become crisper. There are always going to be outlying circumstances that change the view. If we want our cash flow to exceed our expenses then we must redefine what passive income is.
Diving into Hyperactivity
We’ll say it again. Passive income comes after hyperactive active income. You just cannot short circuit the process or principles. Passive income always starts with production. Most of us aren’t looking to build a real estate business. But how do you avoid that if the path means taking an active approach?
The key is leveraged income. Once you’ve implemented the hyperactive activity then you can tap that system. We use the example of a spinning merry go round. Once you have it going at full speed, you can have someone else keep it spinning or implement a lever system. The key is that you get further away from being the active spinner. The goal becomes to build longer levers, which is just a series of systems and processes.
“Financial freedom is not about vaults or buying houses” – Bradley Gibb
Get past what you’re taught, trained, and educated to see which are the things that are right in front of our face. One of the most difficult thought experiments to understand is the seen versus the unseen. Inside the game of leveraged income it is not about the individual deal then adding up to financial freedom. What it really is is the fact that we’re building a system to deliver something for us.
We choose vaults and homes because they are the easiest building blocks to build the system that we want. At CashFlow Tactics we threw out all products and looked at the system behind it. To be able to do that we had to understand enough about the system.
Understand the System and Real Passive Income
If we don’t understand the system we are trying to manage, then it will turn into chaos. Our goal is to empower you by teaching you what the system needs to look like. Without that understanding, the products will not make sense. To get leveraged income, you must understand the roles of the system.
Understanding the system starts with understanding capital. Then we have to understand the acquisition process. Things like who is adding value and how they are getting paid. We also have to know what good and complete looks like. What does a house for your tenant need to look like? We have to understand leasing, turnover, and eviction and be prepared for when those things come.
Knowing and understanding all of these elements require work. You have to know your systems and processes so well that you also know when they aren’t working. Know enough about the system that you can be the CEO and all the elements of the system. That’s what we teach at CashFlow Tactics. We aim to help you understand how to manage your systems as effectively as possible.
If you’re looking for a place to start, then we encourage you to take our FREE 5-day Cashflow Tactics Challenge. It’s a great place to get started and test your knowledge of what you do and don’t know!