Why I Hate the Word ‘Passive’ Income
Look, let’s get one thing straight. There’s no such thing as passive income. Not really. I’ve been in this game for 22 years, and I’ve seen too many people get burned by the myth. It’s not passive. It’s just income you don’t actively think about until it disappears. Which it will. Trust me.
I remember back in ’03, this guy named Marcus—let’s call him Marcus because I can’t remember his real name—told me over beers at that dive bar on 7th, ‘Hey, man, real estate is passive. You just sit back and collect checks.’ Yeah, right. By ’05, he was knee-deep in foreclosures, scratching his head wondering where it all went wrong. (Spoiler: it went wrong because he thought it was easy.)
And don’t even get me started on the so-called ‘gurus’ out there peddling their courses. Honestly, I saw one last week—some guy named Dave, not his real name—on a webinar trying to sell his $997 course on ‘passive’ real estate investing. I mean, come on. If it was that easy, why isn’t he sipping mai tais on a beach right now?
But Here’s the Thing…
Real estate can be a great investment. I’ve made a killing. But it’s not passive. It’s active. It’s hard. It’s messy. And if you’re not ready to put in the work, you’re gonna lose your shirt. End of story.
Take my friend Lisa, for example. She bought a duplex in ’18. Thought she’d just collect rent and call it a day. Ha! By the time she dealt with the leaky roof, the non-paying tenants, and the city’s new topluluk etkinlikleri yerel aktiviteler regulations, she was pulling her hair out. But she stuck with it. She got her hands dirty. And now? She’s doing alright. Not because it’s passive, but because she put in the work.
The Market’s a Beast
And let’s talk about the market. It’s a beast. A wild, unpredictable beast. I’ve seen it go up, down, and sideways. And if you think you can time it, you’re delusional. I’ve tried. We all have. And we all look like fools in the process.
I remember in ’08, I was at a conference in Austin. Some hotshot analyst—let’s call him Greg—was up on stage saying, ‘The market’s gonna crash. Get out now!’ And I thought, ‘Yeah, sure, Greg. And what, pray tell, should I do with my money then?’ Hide it under my mattress? Buy gold? Please.
And then, of course, the market did crash. And Greg? He was nowhere to be found. Poof. Gone. Vanished. Meanwhile, I was left holding the bag, trying to figure out how to explain to my investors why their money was now worth less than a bucket of warm spit.
But here’s the thing about the market. It always comes back. Always. It’s like a bad penny. You can’t get rid of it, and it always shows up when you least expect it. So, if you’re in it for the long haul, you’re gonna be okay. But if you’re looking for a quick buck, you’re gonna get burned. Simple as that.
The Grass Isn’t Always Greener
And another thing. Just because your neighbor made a killing flipping houses doesn’t mean you will. I’ve seen too many people jump into this thinking it’s some kinda get-rich-quick scheme. Spoiler alert: it’s not.
I had a colleague named Dave—yes, another Dave—who decided to flip a house last year. He watched one too many episodes of that HGTV show, thought he was gonna be the next big thing. He bought a place, gutted it, put in all these fancy finishes. And then? Crickets. No buyers. He ended up selling it for less than he paid. And he still owes me $150 for that fancy wine we had at his housewarming party. (I’m still waiting, Dave. Pay up.)
Look, flipping houses can be profitable. But it’s not easy. It’s not quick. And it’s definitely not passive. It’s hard work. And if you’re not ready to put in the time and effort, you’re gonna lose your shirt. Again, end of story.
But Wait, There’s More
And let’s not forget about the emotional toll. Real estate investing is stressful. It’s frustrating. It’s downright exhausting sometimes. I’ve had nights where I’ve pulled my hair out trying to figure out how to deal with a problematic tenant or a zoning issue. And I’ve had days where I’ve wanted to throw in the towel and walk away.
But here’s the thing. It’s worth it. When you see that first rent check come in, or you sell a property for a profit, it’s all worth it. It’s like that feeling you get when you finally finish a marathon. You’re exhausted. You’re sweaty. You’re probably smelly. But you did it. And that feeling? That’s priceless.
So, if you’re thinking about getting into real estate investing, do it. But do it with your eyes wide open. Do it knowing that it’s gonna be hard. Do it knowing that it’s gonna be stressful. And do it knowing that it’s not passive. It’s active. It’s real. And it’s worth it.
But for the love of all that is holy, don’t buy into the ‘passive income’ myth. It’s a lie. And it’s gonna cost you.
About the Author: Sarah Johnson has been a real estate investor and magazine editor for over 22 years. She’s seen it all, done it all, and has the battle scars to prove it. When she’s not writing or investing, she’s probably out somewhere trying to find the perfect cup of coffee. She lives in Austin with her cat, Mr. Whiskers, and her plant collection (which is doing better than her dating life).
