Passive Income Is A Myth, Get Rich Instead

Mike DeHaan: [0:01] Welcome to the collecting keys Friday focus. What's going on, guys? On this episode of the collecting keys Friday focus, you have me, Mike DeHaan, here to talk about something that has come up a few times over the past couple weeks between Instagram and this most recent Wednesday episode, which if you miss, you should definitely go check it out. And that is this concept that I think is gonna become one of the new just like quotes from the show or the concepts of the show they really push, which is that you should be chasing massive income and not passive income if you really want financial freedom. And I'm still not sure if I stole that from somewhere or if I just came up with that when I was filming the Instagram reel, and I'm super proud of it because it rhymes and sketchy, and it 100 represents everything that I stand for. So I'm still leaning into it. And if someone tries to sue me or something, then I guess I'll learn the hard way because I did some quick googling and I cannot find it anywhere. So I'm gonna lean on it. But it is something that I am super passionate about, this concept that you should make more money and you should focus on making as much money as you can to escape the w two and get financial freedom versus the route that most people do with financial freedom, which is they try to chase passive income so that they can replace their w two income with something that where they don't have to work, which honestly is a myth. And, you know, the the dilemma with it is that, you know, people don't understand truly what it takes to create passive income.

Mike DeHaan: [1:37] And really what, you know, if they focus on making money, they could achieve financial freedom a lot faster. So, you know, something that I learned, it's something that Dan has learned, something that a lot of other entrepreneurs that I know, and real estate investors that I know have realized that they started to scale businesses. And it's something that I think that if you're serious about wanting to like live a better life and have financial freedom, that you should really embrace. So I'm gonna talk about that a little bit. So one of the main problems with people that are strictly chasing passive income is that most people who chase it, they do not have the capital or the income to actually create true passive income at the level that they're gonna need to retire. And you know, like most people, they're trying to replace a w to first off, most people that are in this position where they're thinking about this, they're making, you know, 6 figures, $100,150,000 dollars a year. And they're trying to replace that with completely passive investments. That means they need to be making, you know, $10 a month. And I can tell you from experience, pursuing that with, you know, real estate or other sort of passive investments takes a hell of a lot of capital. And unless you have an extremely high income job, or you have, you know, some sort of windfall or something like that, you're not gonna just be able to, you know, save your money from your $100,150,000 dollar a year job and buy enough properties to replace that income.

Mike DeHaan: [2:57] Right? People on Instagram and these other places will tell you about how they have some secret way, where they're doing Airbnb arbitrage or some sort of other bullshit where they're able to produce huge amounts of passive income that doesn't really require any work and requires very little capital. Please understand those people are trying to sell you things and they are full of it. I know so many people that are in every different facet of real estate from huge levels to, you know, just starting out to, you know, everything in between. And the one thing that everyone can tell you is that it is hard work, and there is no get rich quick scheme. And anyone that is telling you that there is, is a liar and wants to sell you a course or get you to invest in something with them. So, you know, the the challenge with people that chasing passive income is they need a lot of money, and or it's gonna take a super, super long time. And most of us do not wanna wait our entire life to have financial freedom. Right? What's what's the point? You might as well just put money in a four zero one k. Now, this whole concept of creating this income, and learning how to do it, and really investing yourself is a common thing that you have talked about from some of the business minds out there, you know, Alex Remozzi, Cody Sanchez, those sort of people. And the thing is, you know, if you're putting that money into yourself, and you're investing in yourself as opposed to trying to always be saving it up for like another house, or putting it in stocks, like dividend stocks, things like that, people try to use for passive income, the ROI is infinitely higher. You know? So, like, for example, let's say you have $5,000 that you saved, you wanna put that in a dividend stock, say for a rainy day, you know, hoping you're gonna make like 10% over the next year if you're lucky.

Mike DeHaan: [4:38] That's, you know, yeah, $550, you're still poor, ultimately. Sorry, but that's true. Instead, you could take that $5,000, and this is literally what I did. I had $5,000, I gave it to a business coach, I used that to learn skills, I joined a group with that $5,000, I did a whole bunch of things. And that $5,000 has now made me multi millions, both in equity and in cash revenue. Right? That ROI is so much higher if I had parked it into a stock back in 2019. Like, realistically, with how with ham the market went, that $5,000, it could have turned into like 13,000. Man, that would have been exciting. Instead, it turned into, you know, several millions, and that is something that you can argue with because I invested towards that skill. And you know, if not a coach, like there's also different certifications and things that you can do that will give you so much more opportunity. You know, you can take money, you can put it towards what does Alex Wazio say? Oh, he always use the example of going and you can spend $500 and become a phlebotomist. Right? It takes one day, and it takes your basic income opportunity from minimum wage to like 28 or $30 an hour. It takes one day, right? And it can like triple your income potential. Or you can take, you know, that $5,000 or that $50,000 you're saving for a property, and you can use it to go to like, learn a trade, so you can start a business. You can use it to, you know, buy a business or get more involved and things like that. And, you know, you could put that into advertising so that you could find more properties.

Mike DeHaan: [6:07] Like, there's so many different things you could do, $50,000. I guess advertising so that you can wholesale properties and generate massive revenue instead of park it all into a rental. There's so many things you can do, but people always wanna go the safe route because it feels like it is more secure for some reason even though really it's not. So the thing is, passive income. Right? Honestly, the whole concept of it's meant for rich people. Like, you're being completely honest. Like, the the thing is there's so many people chasing it, the values of the assets, all, you know, the processes to buy a lot of these assets, the options that are out there, they always become harder and harder to pursue because so many people want them. And as people become wealthier and wealthier, they're willing to accept less of a return for it to make sense. It's one of the reasons we've seen, like, real estate values go up so much. Right? And some of the some of the stock opportunities go so high is because you have people that are trying to place money, start trying to place money. They want this sort of passive income, and so they're going to have more opportunity than you to put that money into those different vehicles. And ultimately, you're better off trying to become one of those people themselves. K?

Mike DeHaan: [7:14] You know, there's lots of different stuff. So one of the questions always comes up with, hey, you know, I'm working on saving this cash. I wanna create this massive income. What would be the best opportunity for me? Something that I get asked on a regular basis by people, especially after I made that Instagram post a couple weeks ago. People lots of people reached out to me and were like, I don't really wanna flip houses. What would you suggest? You know, honestly, this is what I would suggest is you use that cash as essentially a seed fund for yourself to have as a cash reserve while you figure out what the hell you wanna do. Right? And you leave your w two. So what exactly I mean by that? I mean, let's say that you know, you need a $100,000 to live for a whole year. Instead of taking that $100,000 and throwing it too much properties, literally save that in cash, and use that as a runway to give yourself the freedom to ditch a career, ditch something that's holding you back, and go all in on developing those skills. Right? This is actually something that Dan and I talked about very recently, because I don't know if you guys know this, Dan actually still has, you know, my co host, he still has a w two job that he has every ability to leave, but he has this mental mindset around having cash reserves and having enough passive income to feel comfortable with it.

Mike DeHaan: [8:32] Even with the success that we've had in our business, he still has his calling to work in this w two job, and it just comes down to his need for security. Something that we talked about very recently was, hey, listen, why don't you just, you know, pull $300,000 out of the business, out of some of the investments that we have, put that in a checking account, and now you have, you know, realistically two years that you could live off of. And then over the next two years, if we don't make any money, you at least know you have the two years paid for, and you can kinda set it, you know, a stop point out that of where you're going for another job. But doing that can give you that security, and that's something that I think everyone should consider as well. If you know how much money that you need to have, sort of in reserves to be able to have that kind of freedom to take that leap, save that up and use it as your as your runway. Right? People think about, you know, I I get a lot of pushback on stuff like that because people are like, oh, well, know, it's just sitting there. It's losing value, all those sort of things. It's like, well, yeah, it has a short time horizon, but you're using it to create opportunity for yourself so that you can create a lot more opportunity for yourself in the distant future. Right?

Mike DeHaan: [9:43] And if you think about it, it's really no different from you investing money in a company, you know, or like making whether it's a a stock, you know, you're giving up you're giving the stock the company money through stock, or you're making a private equity investment. So the difference is that you're the company that you're investing in. What the hell do you think happens when you give a startup, like, $50,000 just like a private equity investment? They freaking sit there and try to figure out what the hell they're gonna do with it. You can do the exact same thing. You know, it goes towards their reserves to get them run away while they go and try to make moves. Why not just invest it in yourself and give yourself the opportunity to have that runway to try and figure out how to make moves? You know, like there's just so many better options than, you know, throwing it into like super mediocre returns, like, trying it up in properties that just, like, aren't gonna get you where you wanna go, and not giving yourself the true flexibility to leave the things that are holding you back and to really go all in. Because, you know, there's there's one thing I can tell you that I'm absolutely 100% confident on. If you truly 100% are laser focused on learning how to make money, you go all in on it, you know, you have no distractions.

Mike DeHaan: [10:54] I am extremely confident that 95% of people can replace their w two incomes within twelve months, and then probably have more. Right? I think the only exceptions to that are some people that have extremely high w two incomes, right, where they're making, you know, $500,000 a year, you know, million dollars a year, things like that, that will be very hard to replace. But if you're the average person making 60, 70, 80, you know, even a $150,000 a year, you can absolutely replace that in twelve months. If you get rid of all distractions, you give yourself a little bit of runway so you can be comfortable, and you just go all into it. And you just focus on making that massive income and not be fixated with the passive income, which by all intents and purposes is not a real thing. So anyways, that's my view on that. Sorry for the rant. It is something that I've become extremely passionate about recently. And it's probably an extremely unpopular opinion. It does not sell dreams. I'm sorry. But that is the reality of what the world looks like these days. You know, the the days of 2009, where you could go and buy a $100,000 property and rent it out for $1,500 a month or whatever at least to sand bigger pockets. Those days are gone.

Mike DeHaan: [12:04] You cannot do that anymore. You need to focus on generating as much capital as possible as quickly as you can if you want to live a good life. Very basically, you gotta learn how to get rich, not how to make like easy money on the side. And that's just the truth of it. So anyways. Alright, guys. Well, hopefully you got something out of that. You should shoot me a DM and let me know what you think. I would love to hear your thoughts on massive income versus passive income. Whether you love it, you hate it, you think it's absolute, you know, trash, whatever. Hit me up. I'm still waiting for my first hater. I'm actually not sure I've had a couple now. But there's a you know, I always like to hear what people think, So can hit me up on Instagram at mike underscore invest. Go ahead and shoot me a DM. You should also share this show with your friends, and you should leave us a five star review. It's the easiest way for us to grow the show. And last bit, you should go to store.claytikispodcast.com and check out our merch. We got some pretty sweet shirts. We have a bunch of new shirts that we're gonna be launching up there soon, including you'll probably see a massive incomes better than passive income shirt coming up there as well.

Mike DeHaan: [13:08] So store.collectingkeyspodcast.com. Check that out. Anyways, guys, thanks so much for listening, and we'll talk to you next week. Thanks for listening to this collecting keys Friday focus. Be sure to subscribe wherever you listen to your podcasts.