TRANSCRIPT

Why Passive Streams of
Income are a Smart Idea

0:42

Iva: Welcome to a new episode of The Mompreneurs Guide to Work-Life Harmony. My name is Iva

0:47

Desiree: And I’m Desiree

0:50

Iva: And today we are going to talk about “money, money, money….”

Money, baby. We are going to talk about money, and I want you to imagine this for a second: what does it feel like to you when you hear phrases like “making money with little to no work”, or “making money while you sleep”. Does this have a nice ring to it, and is this even possible? And this is a little bit, what we're going to touch upon today.

So, Des, you seem to be pretty much on track towards this amazing idyllic place of making money while you sleep. So why don't you tell us a little bit about what is it that you're doing, and how does that look like for you. Please share.

1:43

Desiree: Yeah, so when I first heard about that too or heard people talking about it, I said: “Yeah, that's a joke, sure”, but it is actually totally achievable, and it's like the most wonderful feeling in the end when once once the money starts coming, right.

So, residual income, really means, or some people say passive income, is means when you continue to get paid, after the work is done. Right. This could be examples of like getting royalties from books or movies or songs, you know, all those artists that record their song once and then every time it plays on the radio, they start getting money without actually singing that song anymore. Or people that do real estate renting out a home and doing business investments where you don't actually have to be there or present to earn it, like another very famous example is Bill Gates, who's making residual income from Microsoft, even though he doesn't even work there anymore.

So, residual income means you get paid after you've been you're not actually doing that work anymore. It just keeps coming and coming. And that is very different from what most of the people nowadays know as active income because active income is, when it comes as a direct result of your efforts. For example, you go to work, and you get paid per hour that you spend at the work or you get paid per week or per month or whatever your deal is with that company. It's wages and salaries, and even self-employed service providers: lawyers or doctors or sort of IT related people, they get paid by certain jobs for what they put in. So pretty much, it means you're just trading your time for money. That's active income. So when you're at work, you get paid; when you are sick, you don't get paid. What if you're self-employed? This means you can actually never stop working or your money stops coming in. What happens if all the hours you have put in over the last five years, and you actually continue making money of that down the road, down the road, even if you decide to go travelling for a couple of months or, you know, you decide to just take a month off just to be with your family and you still make money? What income is that? That's residual income, right. Okay, so in my case, for the first time this really really, really clicked for me is when I was in the business for about a few years and that was really much just a side hustle for me right.

And I then we got a call “hey you're moving” {us as expats, that's the famous call we get after every few years). “Hey, you're moving” and for us being in the hotel industry, it usually happens really, really fast. So, it came in a very convenient time we were also getting married that summer. So of course, fantastic timing. So I was planning a wedding, we were actually having our wedding, and at the same time, packing and moving to Japan. So, needless to say, in those three months, we spend them packing and then traveling to Europe, getting married and then going straight on to the new country. So I didn't do anything- I couldn't! I didn't have time, we already had a little one that that time.

And there was just no way. But even in those three months, my pay check continued coming in as normal and even one of those months was the highest pay I had ever gotten. And that's when it hit me. I was like, “Oh my God, that is amazing. That is really cool” and that is actually the moment I decided I'm going full in on this, because, what’s a better way than having all of that time for your family, focusing on something without compromising your income?

So, what are the pros for that? For mompreneurs, for people like us? And I would clearly say it's the reason… I think I speak for almost all mompreneurs, is that we go into this kind of business or we are entrepreneurs to first of all, we do something. We want to work, we want to build something around our passions, but we also want to raise our family. We don't want to go back to work. We want to be home when our kids come home from school, we want to be the ones that actively raise them. We want to be able to travel and be there and especially as we've discussed this before right, Iva, as expats. We, as the wives sometimes also have that that supporting role to play when we're navigating a new country.

7:14

Iva: Yes, you sort of need to sometimes take a little bit of the backseat, as we call it, and be the one that provides the support for all the intangibles, meaning: relocation aspect, adapting to the new place, making sure that the family is well adjusted. You know, choosing schools, the best place geographically to settle in, etc. And that takes a lot of time in and of itself.

So, and, you know, sometimes the breadwinner, or the other spouse, is the one that is already having to be on the job showing up, doing the work, and all of these things fall on your plate as the traveling spouse. So, absolutely. It is something that is part of this lifestyle.

And going a little bit back to the beginning, where you were saying that it first hit you, when you noticed that, you were taking all these months of transition between the moving, the wedding, the relocation and everything that it entailed and noticing that you were still making money. And I want to come to that a little bit, because it can be a bit of a misconception when we use the proverbial phrase, “Make money while you sleep” because we tend to associate that with thinking that there is absolutely no work required in this stage. But there is going to always be some work involved, even if it's about passive income or residual income, as you call it. It's just that it requires much more minimal effort than if you're actually actively working for that income as you as you so put it you know we who are employed. So we do need to make this distinction because we don't want to mislead anyone into thinking that all you have to do is sit on a hammock and just drink some coconut water. You do need to still putting some effort, but it's not the, you know, being on the nine to five hustle every day. And, as you said, if you get sick, if you cannot show up for any reason, then either your job is in jeopardy, or if you are an entrepreneur, you're not getting paid.

10:05

Desiree: And I'm so glad you're clarifying that-that is very true. And the reason I say I didn't do any work is because also, first of all, it never seems like work to me because I truly love what I do. So even when of course, there's things I was doing and handling but I don't even consider that work anymore that that's one beautiful part of it. The second is in the realm of network marketing. So what does that mean? It's like I am networking, I'm literally speaking with friends, families, with wonderful people I've met along the way that are now friends as well. And it's all about relationship-building and I don't consider that work for myself. So that it continues and actually continues and it grew a little bit because I was able to do that, even while in the middle of a move, and in the middle of it like being in a different country altogether. So it's it's true, it's really important to clarify that. Or the realm of like network marketing but also digital courses so you're earning for something you've previously put in a lot of work, and you've really worked hard, and then it starts running on its own. So it's not like you're not doing anything that's, you said that completely right,

11:24

Iva: Right, thanks for that. Also I wanted to go back to this idea of working moms, mompreneurs, we all have to do what we need to do, to bring in that pay check, however, it looks like. But there are some sobering facts that that I wanted to also highlight because for us women it seems that the workload at home, and at work, starts to become combined and it can be very challenging, but it also varies depending on your location.

So, for example, there's this 2019 report by UNICEF, which was analyzing which are the countries that are most family friendly. And you have places like Estonia, that for example, they allow new mothers to have over 80 weeks of leave at full pay.

12:32

Desiree: Wow.

12:34

Iva: Yeah, that's pretty, pretty amazing, and then you have, you know, at the other end of the spectrum, you have countries like the United States, which has a grand total of zero weeks, absolutely, no national paid leave, and then the rest of the world that falls somewhere in between.

So, as moms, these are some sobering facts and when you say when we are also putting in the mix that you can be an expat family or that you're moving, but also that you just want to be making ends meet, sometimes the job is really not enough. There are many reasons why people are looking into having this passive income, having this residual income on the side, and it's not necessarily because they want to be full on mompreneurs, but maybe they are working full time but they need that extra money. Or they do want to leave the workforce, for whatever reason that might be, they just really want an exit, or some people are just looking to diversify their income, putting the eggs in different baskets, and not just in one. Or noticing that they want to retire soon and also want to enjoy their life while they're still young, and that they can do so, and not when you are completely at a stage where you're very fragile, or your mobility is not the same and you can really enjoy those golden years.

So there are many reasons, but I don't think anyone would be bothered by being asked if they want to make more money. I think we all want to make more money. It's not a bad thing. And, sometimes we equate that residual income with ideas that mean that you have to, I don't know, you have to go into investing in stocks and bonds or you have to be this real estate guru to really be enjoying this nice aspect of having money rolling, while you're making minimal effort. But those are just some of the standard, old-fashioned ways that you can go about it.

But now that we are in 2021, there's also so many new possibilities that anyone can explore but obviously, as mompreneurs, we want to share this with fellow mompreneurs who are also looking for what are the options nowadays that they can really tap into to start generating this extra income. Des, you want to share a little bit what does that look like today? Briefly, what are some things that anybody that wants to start having a little bit extra on the side can look into?