SELF HELP 30
How To Make $10,000 a Month in Passive Income, Revisited
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This newsletter is my process of writing a self-help book, tentatively titled How To Make Money: Financial Advice For Poets.
There are so many new subscribers to this newsletter. Where did you all come from? What the F is going on? I think most subscribers haven't read earlier posts so I'm going to pull out a few of my earlier points to make here, and think about them a little more.
The original inspiration for this substack came from a thread on a real estate discussion board. Someone posted the question, what was the quickest way to make $10,000 a month in passive income? The answers, as you would expect, were shockingly wrong. And there were so many of them!
The real answer is that the quickest way to make $10,000 a month in passive income is to have $1,200,000.
But even that is glib because $1,500,000 is more like it. So much depends on your risk tolerance, and, more importantly, your definition of passive income.
Actually, the answer to what is the quickest way to make $10,000 a month in passive income is to have a generous definition of passive income, which is deceptively similar to the quickest way to find love, which is to have a generous definition of love. People want to be loved for their authentic self, for someone they believe is inside of them. But actually there is no bad reason to love a person, even if you just love them for their car, or their physical appearance. At any rate if you worry too much about why someone loves you you might end up pushing your true love away, if there is such a thing.
Back to the point. $10,000 a month is $120,000 a year. It's reasonable to imagine making $120,000 with an $800,000 investment. A 15% return is doable with pretty basic real estate investments. You don't need some top secret knowledge to achieve that but it might be harder depending on the market you live in (New York, San Francisco). But if you're lucky enough to be close to Birmingham, or Indianapolis, you should have no problem. Real estate is not passive enough for many people. Especially in the beginning. But the federal government counts real estate income as investment income, and it makes sense to let the federal government decide what is passive income and what isn’t.
Which is like how we talked about being Jewish in my family. If Hitler would have killed you for being Jewish, then you’re Jewish. Don’t listen to people who say you aren’t Jewish because your mother wasn’t Jewish. After all, you can’t be half British and half nothing. And also, why is it the people saying you’re not really Jewish are never Jewish themselves?
At any rate, the question people didn't know they were asking on the discussion board was what is the quickest way to achieve a value of $1,000,000 (or $1,200,000)? They thought they were asking a cashflow question, but actually they were asking a net worth question.
It's also a different question than what is the best way to achieve serious wealth. Because if you want to achieve really serious wealth you need to start your own business, and that business needs to be successful. Lots of businesses fail. And if you're good at failing there's a strong chance you'll eventually succeed.
On the other hand, if you're good at working for other people, and you invest actively, you can get to a million dollars. It helps if you purchase your first home as early as possible. And it helps if you are a good employee. And it helps if you work extra jobs on the side and buy toilet paper in bulk from Costco and keep your extra income working for you by investing in the S&P 500, or purchasing income property when possible.
But actually, reading more into that particular thread, I realized the question being asked was not how do I make $10,000 a month in passive income? It also wasn’t how do I make a million dollars as quickly as possible? The question being asked was how do I get paid for doing work that is engaging and meaningful?
That's what people were talking about. They wanted to know how to have enough money so they could do the thing they loved full time. People want to be deeply engaged in whatever it is they spend the most time on. And they want to be compensated and appreciated for it.
So really the quickest way to make $10,000 a month in passive income is to love your job.
xox
p.s. Thank you for reading. It’s very helpful when you like posts or leave comments. Emotionally I mean. And maybe even better when you share on social media, which makes me feel great.
I haven’t figured out how to make money on this substack, and probably never will. But if you purchase a full year subscription and send me your address I’ll send you a physical postcard. That’s an idea I just had. You have to send me your address though.
Hi Stephen. The trouble is, if a poet is making $10k a month, maybe they won't want to write poetry any more! By the way, I knew a guy who was a cook, and he was an excellent poet and storyteller. I guess my point is, there are many ways to make a living and still do your art.
One of the bests!