We’re entering a new era. During the pandemic there’s been a complete shift in focus in terms of how people will make a living. You may have chosen a career for different reasons. Some see a show on television. Others come from a family of physicians, lawyers or business owners- it may be tradition. Many are indoctrinated by family to make something of themselves.
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With the onset of COVID-19 many people found themselves in situations where they could not survive. If you’re in this situation, I would advise to take care of your basic needs before moving on to other options. This article is being written for people who wish to augment their current income.
We’ll cover the passive income strategies, outdoors and mindset that you need to succeed. You’ll be introduced to a starting point for a new way of life. A starting point for health, freedom and self-empowerment.
Today we're featuring Tom Burns, who is a trained orthopedic surgeon. He took an interest in real estate before he finished his medical training and built his portfolio over a 20 years period.
He still practices medicine on a limited scale, owns a real estate company with $250 million under management, and creates educational content for people trying to create passive income.
What is Passive Income?
Passive income is cash flow. It is income that comes in automatically every month. There is always work that has to be done. What's different about passive income is where you are in the chain of income.
The most commonly held belief, is that we need to work 40 hours per week. This became the norm for many Americans during the Industrial Revolution. When I was in Europe I noticed something about the way people approached work. They didn’t worship the idea of working long hours.
Work got done and people got on with their day. In essence, there seemed to be a sense of balance. And I did notice a difference in my own work and family life. I would go skiing, sometimes returning in the morning and go right back to work. Engaging in 'deep play' like this allowed me to re-charge and to bring this energy into the workplace.
Passive income is not passive for people working in the business. Although working in the business can be a bridge to passive income. Someone that is working in a business is an employee. Of course, when you are starting a business on your own you'll have to grind to get the business off the ground.
Passive income comes from owning a business or a portion of a business that is creating value.
Rent out a house as a property management firm would be an example of working in the business.
The owner of house has a property manager that manages the property and takes care of tenant's needs. The mindset of the business owner is that one is creating value. They own a piece of the business and serves other people. There are numerous strategies that allow passive income.
Having multiple streams of income provides a sense of calm. If you do have a traditional job you can go into work with focus. You're not worrying about making ends meet. Passive income can allow you to express your creative side.
Here are some examples of passive income (always perform due diligence prior to investing in any of these):
- Dividend paying stock - businesses that generate profit and payout an annual dividend. Look for stocks that have been performing and paying out over the last 20 years.
- Mobile home park: You invest in a park with lots. The cost is about 800K with a negotiable 160K down payment. Here are a few strategies to develop cash flow.
- ATM Machines or 'alternative cash machines': A turnkey business. Once the machine is installed, it functions without monitoring. You can hire someone to occasionally restock and maintain the machine. The longer the ATM machine operates the more income you make.
- Book: Start with a litmus test like a guide and move up to a self-published book. You can use GumRoad to host and sell your guide. They take a small percentage of sales.
- Storage Facilities: Self storage investment is recession-proof. No matter what the economy is looking like self-storage units profit. 10% of the entire U.S. population have a storage unit.
- Ice-Cream Parlors (Baskin Robbins): Once you set this up you should see a passive income of about 80K per store.
- Real Estate Investments
- Newsletters and Podcasts: I've used these to generate passive income through sponsorships. Substack is a great resource for getting started with newsletters.
- Outsource Operations for a Micro-business
- Licensing Ideas: Sell licenses for business processes, templates and other assets that make things easier for others. As people migrate online, they need frameworks for doing every day tasks like conducting a remote meeting.
- Cash Flow Policies: A Cash Flow Policy allows you to avoid the perils of a 401K and it serves as a vehicle for readily available cash flow.
- Offer Your Expertise to clients: Consulting can come in many forms you can outsource the work for passive income.
- Building a Business for Ownership: E-commerce is here to stay.
- Buying a business: Sites like Empire Flippers work well for buying or selling web properties. A newer site is called Micro Acquire- no brokers
See 'Why Doctor's Don't Get Rich for opportunities listed below:
- Paper Assets
- Oil and Gas
- Buy Debt Assets
Passive income comes from profits or selling more than you spend in a business setting
If you’re paid for giving your TIME you may make money. The problem with this thinking is that you will not have financial freedom. Wealth is not created through doing everything yourself.
If you’re not an owner you’re not getting paid around the clock. You have to be present putting in the time to get paid. Wealth is created by starting your own company.
We all have a distinct path. You may have studied law, medicine, worked as a mechanic or an architect or served coffee at Starbucks. Perhaps, you came from a well off background or you may have been raised with fighting for every piece of bread that you put on the table.
Take these experiences and draw on them. What are you good at? What do you remember people saying you were good at when you were a child? Personally, I remember teaching other kids how to spell big words and communicating my thoughts to people. Sales became a natural path forward for me. I grew up in Silicon Valley where innovation was at the forefront of everything. My family consisted of educators, engineers and business moguls. Translating something into value became a focus for me early on in my life.
Everyone has a unique gift. Use some of these techniques to find your superpower. Determine what your gift is and start sharing it with others. You’ll be doing the world a favor.
Be careful what you focus on because you will start to move in that direction. In medical school I met an OB/Gyn that would get yelled at by the attending. He kept an optimistic and positive attitude, which I could see was very tough for him. He applied to a program in New York in the area of 3-D ultrasound. At the time it was a hot skill. He soon became one of the leading 3-D ultrasound expert in the nation. He found his skill and something that he was passionate about.
There are two main categories in the business world:
These categories have branches. In sales you may focus on email campaigns that generate millions of dollars, sales processes that allow a business to run like an oiled machine. Sales can also come from partnerships that can catapult a business onto the world stage.
On the other hand, product may involve bringing a product to market, building business processes, software engineering that flips an industry on its head or performing competitive analysis for a project.
Neither of these are better than the other. Go with your unique offerings- everyone has natural born abilities. Leverage the skills that you have acquired over the years.This can be the foundation from which you begin building.
Lead the way. Work on projects or a business that are interesting. As you do this you’ll begin to attract people that have similar interests.
Look at these partnerships in terms of relationships. It's these small steps that lead to success. Build these relationships over the long-term.
Thinking in terms of value-creation
Tim Ferris introduced the concept of the 4-hour work week in his book The 4-Hour Workweek. It was definitely one of the books that called attention to lifestyle design. One of the main problems with a 40 hour week is that you have to be present working, to be paid. Is this the most efficient way of running a business? Is it efficient? Well, it depends.
A better approach is to think in terms of value. Can I work for 2 hours producing what some employees would produce in 6 months time? This isn’t about control. As a business owner, think about the higher level business as an employee thinks like an entrepreneur. In this article, Sahil Lavingia the founder of Gumroad talks about his approach to meetings, deadlines and full-time employees. In the article, Sahil defines wealth as how we are raised to think of wealth. He talks about how he changed his way of thinking about wealth to thinking in terms of value creation.
A cashier that is processing transactions for customers could be paid by the hour. It may be an efficient way to pay a cashier. The business owner could provide the employee, with thoughts on what to do with their downtime. Cleaning the windows, wiping down tables could be examples of efficient uses of time.
A highly skilled developer can push code that could take a few hours to implement but, the value of his work can be a game changer for the business. These both provide value in different ways.
In the next section, we talk discuss passive income with Tom Burns and the possibilities that it can bring in terms of lifestyle.
Why do you think it’s so important for people to engage with the outdoors?
We started outdoors as a species and I believe we are meant to enjoy its beauty. The sun helps ward off depression. The sound of birds chirping lifts your spirits. The immense scale of our world humbles us and hopefully allows us to be grateful for what we have.
After a few days off, or after a weekend break people may find it tough to get back into the routine.
How do you balance life and the outdoors?
I try to get outdoors every day. Thus, the workday routine is just part of a normal day. If I spend too much time indoors, I will consciously take a walk or a hike just to clear my brain. Often, I take calls while walking by the lake. I like to get deep into the wilderness at least twice a year so I can try to picture what it was like before we had 7.5 billion people on the planet.
Can you give us a few of your favorite places for exploration?
I love Africa. Antarctica was spectacular and the least affected area of the planet. The Rocky Mountains have some beautiful and secluded spots. The Pamir mountains in Tajikistan were striking, as was the culture that lived there.
Have you introduced your family to the outdoors? Any reflections on the benefits for families?
Yes. My family has seen the beauty of Africa and many other places. I believe that if the option is available, travel and exploration will give children a greater depth and understanding of the world. It gives them a chance to realize that life does not exist solely as it does in the bubble of their hometown.
In your book, “Why Doctors Don’t Get Rich” you discuss the importance of passive income. How would someone get started with this?
‘Everything starts with education’- Tom Burns
Everything starts with education. Find what excites you and learn about it. However, education alone does not produce results.
You must act. Get in the game and learn by doing.
Find a mentor who has been there and follow their guidance. It will shorten your journey. The first bit of passive income that you receive will make a big impact and you just might become addicted to receiving money that did not require active effort. From there your results will multiply.
For someone who is transitioning into a different career, what are the steps to get into a new role or business opportunity?
As in the above, find what you like. You are here to build a life – not just to work to live. Decide what you want out of life, make the change and get a coach or mentor to guide you along the way.
What are your thoughts on recovery and rest? What role do they play in being active?
Rest is a wonderful thing. I hope to try it someday! Your mind and body require replenishment. To follow your dreams or a new career path, you will need 100% of your energy.
You can’t do that if you are sleep deprived. Also, take time to unplug from work and just enjoy yourself or your family. It will mean a lot to you and more to your family.
Mindset is really important. With business and life setbacks are a part of the game.
What measures do you take to stay positive?
Perspective and gratitude. Nobody has fired a gun at me today, and I have plenty of food to fill my belly. When I threaten to feel sorry for myself, I simply take inventory of the blessing that I have in my life.
Family, indoor plumbing, gainful employment, friends, ambitions, health. The list can go on and on. We are all blessed.
Problems will arise, but we must meet them head on and hope that we learn lessons from the mistakes.
How can folks learn more about you i.e a website? Are there any resources that could help people along the way?
www.richdoctor.com There are regular newsletters, blogs and videos. Some information comes from me and some comes from experts I have come to know over the years. There is a resource section on the website with free material that will help with the creation of passive income. There is also a link to Presario Ventures, which offers more education as well as investment opportunities.
I have also recently published a book, Why Doctors Don’t Get Rich, which is written to help guide people on a path to passive income and eventual freedom. It is available on Amazon, iBooks and on the website.
If you like to book a quick call with Tom to learn more about his coaching programs click here.