Passive Income


Retirement centers around two primary concepts: Assets & Cashflow.

“You have to build your asset base”


“Liquidity has to be your primary focus in the long run”

Are you ready to seriously start thinking about your 'Retirement'? If so, you're in the right place. Simply put, 'retirement' is a term we use to describe a state in which someone doesn't need to work for money. This term essentially describes a person of any age, who sets their financial life up to be able to have/do whatever they want with their time irrespective of money as a need for covering their basic necessities.

Typically speaking, this retired someone is out of the labor force and over 65 years of age. However, more and more people are discovering the simple fact that 'retirement' is hackable, it can be engineered and implemented with relative ease at any stage in life. What does that mean? It means folks in their 40's, 30's, and even in their 20's are retiring. They are not retiring in the traditional sense of course. They simply figured out how to generate enough cashflow through their investments, to be able to afford not to have to work for money alone. This doesn't mean they don't work anymore, far from it, it means they get to work on what they want to work on, and they get to decided when they do so. It means they have full control over their time. They get to decided their schedules. They get to decided where they want to live on the globe. They get to decide for themselves, they choose who they work with, and what they get to work on, they are not bound to employment for mere financial reasons. These individuals are either working on passion projects, spending time with their family/friends, they are traveling around the world, or they are volunteering to help communities in need, or in some cases, all of the above. 

Sounds like a pretty good deal, no? Of course it does, but you’re here because you want to figure out how to get there. How to take full control over your time and money. 

If your goal is to free up your time, then you will need to first figure out how much money you’re going to need in order to do that. Many people assume they will need millions to retire. This is simply not true. What you need in order to retire successfully is Consistent CashFlow or a Large Pile of Savings, although the former is much more realistic to obtain than the latter. Instead of adopting the traditional model of accumulating employment savings and investing/lending these funds out to managers and markets to generate an income off dividends, what we are focusing on instead is the bypass of the employment phase, and the generation of consistent stream/s of month income to support our lifestyle. This means you should be thinking in terms of costs first i.e. the bottom up approach. Quick example: if you spend $2,000 on Rent or Mortgage, another $500 on food, another $250 on transportation, $700 for all other services = this means your monthly spend is $3,450. So, if you can figure out how to set up a system (or several systems) that generate this amount of cash every month, without you having to spend a lot of time maintaining them, then you can effectively, retire. Your needs will be met, and you can spend your time doing whatever it is you want. 

You: ok, I'm in, I get it. But how do I do it? What's the recipe? 

1. Passive Income - Many people figure out how to make money with out spending a lot of time on it consistently by setting up businesses and other income streams that are semi-automatic. The idea is simple: you put up all the work needed UP-FRONT (this means you bust your ass until the job is done), and then whatever business you create runs automatically or with minimal maintenance. Then you get to sit back and collect on your hard work.  We have seen so many different kinds of entrepreneurs doing this in so many different ways: RealEstate, Stock Trading, Small Business, Online Markets, Dropshipping, and the list goes on and on. Spend the time on developing your income streams, and you will be rewarded accordingly, you will have enough to cover your needs, and most importantly, you will have time. 

2. Investment Dividends - We cannot emphasize this point enough. Always invest your money! When you have some left over, don't buy that new car! put the money to work instead! Invest in your future self. Investing in stocks, ETFs, private businesses, cryptocurrencies, etc, etc, etc. The best ways to grow your wealth over time is to let your money work for you through investments, the sooner you can start the better. Investing is an essential practice in making your money make you money. When you do this well, you receive dividends, as well as capital gains, which you can use to spend and/or re-invest. Anyone who wants to retire early will need to have a steady stream of dividends coming in, and in the long run, you want those cap gains to balloon to the moon ;) 

3. Slash Expenses - Live like your a college student. Yes, you can do it, get rid of the car, the cable, the truthfully unnecessary excess. Just cut the crap and cut the costs. If you can't complete this basic move the hard truth probably is that you don't want it bad enough. We'll even take it to the point of canceling Netflix (check out popcorn-time...), yes, get rid of the all fat, you need to slim your finances up if your going to be nimble and flexible. All the excess "fat" get invested. 

4. Housing - Here's the deal, wether you rent or paying off a mortgage, your housing costs are probably 30% to 60% of your monthly expenses. In order to retire this is the #1 expense category you need to control. Move to another country if need be, get this cost eliminated or cover it with you Passive Income, but under no circumstances can you continue to bleed your cashflow on housing. In most all cases, if you can solve this piece of the equation then your gonna be able to retire with ease. Own your house outright, yes, we said it. Build yourself a tiny house. Move to a place where your living expenses are dirt cheap until you build up your cashflows (there are many regions in Europe where life is super cheap and you can live well, Asia is also filled with comfortable options for a good life on the cheap). The bottom line is that housing is your biggest expense, and you need to be able to not have to worry about this cost if your going to retire at any age. 

5. Digitize - track all of your finance with a P&L and a Balance Sheet.

Great! You got this far! Now one more step to consider and implement:  

Doing all this takes time and effort, you must be consistent, deliberate, and at times relentless. Be realistic. This will not happen over night, so you need a game-plan, set something super basic up, and above all you must keep yourself accountable. 

Food for thought:

How To Retire In Your 20's

If you don’t find a way to make money while you sleep, you will work until you die.
— Warren Buffett

Re-defining Retirement

The concept of retirement has been redefined since its inception. Initially, retirement was the idea that indicated a government and/or corporate scheme be set to support individuals in old age. The calculous for such schemes were pegged to life expectancy (60-65 at the time_. The retirement lifestyle of leisure was established during the US retirement booms of the 50’s and 60’s. However, this model of retirement is no longer sustainable as the population ages across the west and social security, pensions, and equity retirement accounts all contract. Moreover, life expectancies have risen drastically and continue to do so (+80 years and climbing). This notion of retirement is now, irrelevant and unsustainable.

The new retirement model is financial independence.

In today’s economic setting, the idea of retirement has morphed, and is no longer pegged to age, it is age agnostic. Today, retirement is pegged to the control of the ultimate currencies of life such as time, flexibility, and mobility. One is effectively retired when one controls these aspects of one’s life, i.e. be your own boss, and don’t be a slave to your work.

Today’s Retirement = not having to 'work' for money

There is pretty much only one way we know-of to retire early, whether you are in your 20's, 30's, 40's or beyond, this path is rooted in one simple concept called, Passive Income Cashflow. In other words, if you can figure out a way to generate enough passive income for yourself/your-family, then you can just live off of that, and not have to spend your time and energy hard at work for money alone. 

What is Passive Income exactly? Simply put, Passive Income is a way of generating a set or fluctuating amounts of money every month/week/day that generally doesn't require the input of your constant/continued time and energy to maintain. 

If you weren't fortunate enough to be born into wealth, and/or if you do not have at least $1-5Million pile of cash in savings (our estimated baseline budgeted amount needed to retire with relative ease if you live in America) to retire-with/ live off-of comfortably; then, your only real viable pathway to retirement is passive-income.

Plan of Action

Now that we've established our strategic pathway for retirement in being passive-income, the obvious next question becomes: how does one generate passive-income streams?

The answer is simple, upon reviewing your Financial Statements, the clear path to generating passive-income becomes the creation and accumulation of Productive Assets

Productive assets can be classified in a number of different ways, for example: real estate investments, business investments, stock/equities, digital, bonds/fixed-income, and/or any other investment vehicles that generate constant passive Cashflow


Recently the notion of early retirement has been popularized by the FIRE Movement.

The objective is to accumulate assets until the resulting passive income provides enough money for living expenses in perpetuity. Many proponents of the FIRE movement suggest the 4% rule as a guide, thus setting a goal of at least 25 times estimated annual living expenses.

While the general principle of asset acquisition, passive income and the reduction of spending are absolutely solid principles of financial management and early retirement, the problem with this movement is the proselytization, suggestion, and advice of a recipe-like “early retirement plan”, which is certainly effective, but will not work for everyone, and should not be hailed as the only path forward. The important note on this issue is that assets do not have to be low cost index funds as most FIRE proponents recommend. Productive Assets can be wide ranging: online businesses, digital products, various content, IP & royalties, real-estate, various forms or lending/ fixed income, and more.

The Solution

Unless you love going to work, if you want to retire at any age, by now, the picture should be clear: instead of trading your most valuable asset (i.e. your time) for money, trade in other assets like ideas, physical goods, and/or capital to generate passive income/ cashflow.

If you don't have any of these, well, then you’re shit out of luck. You’re gonna have to get a job and go to work. But hope is not lost, while working for money, make sure you invest what you earn so that you can start generating income off of your investments. In other words, don't save your money, invest your money, in a way that will generate a dividend (i.e. income).

The simple math is: Passive Income > Expenses. Do not live to spend your cash, that's the sure way to guarantee you will not be able to retire, ever.  Your goal should be using your money to generate Passive Income, not Savings!

The key to financial freedom and great wealth is a person’s ability or skill to convert earned income into passive income and/or portfolio income.
— Robert Kiyosaki

Converting Earned Income into Capital Gains vs. Cashflow

So, you are either an employee, an investor, or an entrepreneur, or a combination of these. Each one will determine your type of income. Most people are employees, they generate earned income by selling time. Investors and Entrepreneurs typically aim to generate Portfolio Income (i.e. Capital Gains), and/or Passive Income (i.e. Cashflow).

One must invest to own assets in order to differentiate between the two.

Here are a few examples:

  • Real Estate: Buy properties and rent it out.

  • Business: find/create something to sell and automate it.

  • Intellectual Property: create content, write a book, start a blog, film a movie, build an app, and/or create any other kind of consumable idea, solution, entertainment, etc. Once created, you can live off of the royalties, advertising/sponsorships, automated sales, rents, dividends, and/or repayments.

  • Rent Assets: you can rent out anything you own, a bike, a car, a house, a washing machine, your money (lend it out with interest), etc, etc.

The Future of Retirement

What does the future of retirement look like? This question is also rooted in: what the future of humanity looks like? How will society be organized? What will the nature of work be? How will productivity be measured, sustained, and expanded?

While it is hard to say for sure, and assuming capitalism survives in one form or the other, we can look at two distinct possible futures. One in which governments and corporations take more control and responsibility over individuals (movement towards the socialist side from an economic perspective), or one in which individuals become much more sovereign and financially stable as investor-entrepreneurs regardless of whether they are employed or not.

I don’t know about you, but I would much rather live in a world in which individuals are financially stable and in control, as opposed to a govt. or corporate sponsored form of citizen care such as UBI, Social Security, State Pensions, etc. This is not to say that these ideas shouldn’t be pursue at all, but simply to illustrate the two edges of the economic spectrum as it relates to individuals. If for some reason you are having a difficult time wrapping your head around this, we’ll leave you with this clip of @Naval: