I
once got an interesting comment from a dentist, saying,
“One of my passive income streams includes rental properties. I rented this house to a person while I was driving to Mexico for vacation.”
All right, so let me get this straight: You've got a passive income stream called a rental property, and you're driving to Mexico, and you're renting out a house. That doesn't sound too passive to me.
Then he said, “The tenant’s first two checks bounced, and he ended up living in my house for two months without paying any money.”
How’s that “passive” income stream going for you?
He continues, “Following the eviction, I began reading tons of laws about the situation…”
So here's a dentist who should be focused on his practice, and on becoming a more efficient and technical dentist and doing higher dollars per hour…and yet he's trying to do legal and admin work.
The whole problem is: What is actually passive about what he’s doing?
I love the fact that dentists and professional practice owners look at alternative investments because it's definitely—in my opinion and also my forty years of experience—the way to build wealth, but you've got to do it the right way.
When most people look at real estate investing they usually only see the outside layer – but there’s a lot more once you start peeling back the onion. The outside layer is what you see on TV or what this dentist has been trying to do. In reality, the “I'll go buy some rental properties, I'll fix them up and manage them, and I'll create this passive income” philosophy is anything but passive.
Managing tenants, contractors, and properties is a business. It can be done, but you as a professional practitioner should probably not be doing that. How much is your time worth? How much do you value your time?
That's the problem – people get all mixed up about their time value. If this dentist really looked at his return on investment and return on time, I'll bet both are negligible at best. He could do so much better if he understood how to invest the right way, doing it through other people.
So again, what's really passive about rental property? It's not passive unless you know how to structure it the right way with the right people, who have skin in the game with you. Not a typical management company either, which has problems as well.
If you want to learn more about how to build alternative income streams, without spending your whole life dealing with people and contractors, then take a look at Freedom Founders
- it's what we do, and we do it very well.
To your freedom!
P.S. Whenever you’re ready, here are some other ways I can help fast track you to your Freedom goal (you’re closer than you think) :
1. Schedule a Call with Me:
If you’d like to replace your active practice income with passive investment income within 2-3 years, and you have at least $1M in available capital (can include residential/practice equity or practice sale), then click the link to jump on a quick call with my team. If it looks like there is a mutual fit, you’ll have the opportunity to schedule a call with me directly. www.freedomfounders.com/schedule
2. Get Your Free Retirement Scorecard:
Benchmark your retirement and wealth-building against hundreds of other practice professionals, and get personalized feedback on your biggest opportunities and leverage points. Go to www.FreedomFounders.com/Scorecard to take the 3 minute assessment and get your scorecard.
3. Ready to Step Away?
“How Much is Enough?” This simple question keeps hard-working professionals at the hamster wheel of active income far longer than they need to be. Watch this free training, and discover a proven model for determining how much you really need before hanging up the handpiece! www.freedomfounders.com/training
4. Apply To Visit The Mastermind:
If you’d like to join dozens of dentists, docs, and practice professionals on the fast track to Freedom (3-5 years or less), visit www.freedomfounders.com/step-1 to apply for a guest seat.
