“If it had been a snake…it would have bitten me!”
Thats what grandma might say about our search for passive income
A grandmother’s wisdom stays with us for life. She’s lived through tough times that required resilience, sacrifice, and ingenuity; virtues ingrained by necessity and traits that have stayed all her life.
Grandma often sees what we’ve become blind towards, the opportunities we miss, and the snakes right under our noses.
And in today’s very first episode, your hosts Brandon and Amanda chat about a topic Grandma took for granted that the majority of us have become blind towards: With a funny story about how my sister ate rat poison at my grandmothers house. She is doing great now but Her childhood story of eating something so dangerous is in the podcast. Take a listen!
Here Are The Best Bits:
A life-long lesson learned from eating rat poison ([0:50])
- Two of the simplest ways to create passive income ([3:40])
- Rewiring the way you think about retirement ([7:45])
- Passive income that pays more than the savings shoebox under your bed ([9:20])
- How Grandma’s version of passive income would look ([12:00])
- The tax-free characteristic of Grandma’s passive income ([13:40])
Listen and start creating your own passive income Grandma would be proud of!
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If you’d like to see how Grandma’s timeless wealth strategies can work in your life, schedule your free 15-minute coffee chat with us by visiting www.grandmaswealthwisdom.com/call…just like Grandma would want us to do.
A hearty welcome to Grandma’s Wealth Wisdom with your hospitable hosts, Brandon and Amanda Neely. This is the only podcast for strategies to grow your wealth simply and sustainably like grandma used to. Without further ado here are your hosts.
Amanda: Hi, I’m Amanda and welcome to the very first episode of Grandma’s Wealth Wisdom where we help you build wealth grandma would be proud of.
Brandon: And I’m Brandon, the co-host with Amanda and today, I want to kick off the podcast with something that you might have heard your own grandma say, “If it had been a snake, it would have bit you.” So, I have a funny story about this. My grandma used to have this greenhouse thing, you know it was connected to the house but not really connected to the house. It was like an outside/inside kind of thing and we used have all these plants there and she also had lizards that would be running around all over the place. My sister was a tom-girl so she loved being outside. She loved trying to catch those things, just hanging out doing all kinds of crazy stuff. Me on the other hand, I loved to be inside with all the civilized people.
Amanda: You really just liked the air conditioning.
Brandon: And the air conditioning, it was in Texas and it was really hot. So anyway, my sister was out there, she’s playing around and I see her eating this food out there and I’m like, “What is she eating, what is going on there?” Apparently, my grandma noticed right away and she is like, “She is eating something that is really, really, really, really, really bad for her; she is eating rat poison.”
Amanda: Da, da, da....
Brandon: So my sister, we run out there, we’re trying to help her. She thought she was eating oatmeal for some crazy reason, I guess that is what a little kid thinks. I don’t know; don’t eat stuff from outside. I mean my grandmother also didn’t think we were coming to visit so that is why she didn’t have us out there or visiting.
Amanda: She didn’t think you were coming to visit so she didn’t even think about the rat poison being out there.
Brandon: Yeah, so anyway, we ran or rushed to the hospital and got my sister’s stomach pumped and all of this other stuff. Everyone is okay now, thankfully, but grandma saw this snake under my sister’s nose. She basically saw my sister eating something that was horribly wrong for her. Please don’t go out and eat rat poison and test this theory if it’s going to help you or it tastes like oatmeal. Don’t do that. Anyway, she did this and my grandmother saved the day.
Amanda: Yeah, all this to say that grandma often sees what we’ve become blind toward. She sees the snakes right under our noses and she calls BS on those snakes. Grandma also can see the opportunities that we miss and today we’re going to talk about one of those things that grandma took for granted but we’ve become blind toward this form of opportunity that she had. It all comes down to a really popular topic right now, which is passive income. In recent years passive income has become all the rage. Everyone’s trying to build a passive income for themselves in some way, shape or form it feels like. Grandma wouldn’t have really known what passive income is, what those words mean but she had it and she had a really great form with it and we’re going to talk about that as we get into this podcast episode today. But first, let’s look at what people are talking about in terms of passive income nowadays. There are two primary ways that most people think about passive income. The first one is they think about a business that they have ownership of but someone else does the day to day. So, they are still the owner of the business, they get a percentage of the profits every year but they have someone else that manages and runs the day to day of the business. They’ve “McDonaldized” their business so that anyone can do it and they have to have that person there doing and they can collect their check.
Brandon: I’ve heard this as “The Turnkey Model.”
Amanda: Okay. The second one that most people think about with passive income is real estate where you buy a property, you get some tenants in there, and the rent just comes in every month, very little effort on your part. You just have to take the check to the bank, as they say in the real estate biz. At least that’s what I’ve heard them say. Then there are some other less well-known passive income strategies like affiliate commissions where you take someone else’s product and you sell it or their service and you get an ongoing commission as the customer keeps using it. You get a percentage of the sales because you found that customer. Another form is royalties and licensing. You allow someone else to use your idea. This great idea that you came up with, you give someone else permission to make money with it in exchange for them paying you a royalty or a licensing fee on a regular basis as they’re making money on your idea. With all of these forms of passive income though, whether it’s having your own business, real estate, affiliate commissions, royalties and licensing, I often wonder how passive are these forms of income really? With having your own business you hire the manager, you train them, they get going but what if they quit? What if something happens? What if you need to train someone new? There is a lot that can go on there. What if you have brick and mortar, what if you lose your location? You’ve got to start all over again. There is still a lot of hands on even if you have passed on the day-to-day management to someone else.
Brandon: Being a former brick and mortar business owner, I can definitely relate to that one.
Amanda: Yeah, and then with real estate, this is big one, you still have to repair roofs, you have to take care of tenant issues when they come up and if your tenants move out, you have to find new occupants and maybe months go by where you’re not collecting that rent check on that property. Then affiliate commissions, you still have to find the people that are going to buy the product and probably do some customer service with them over time as they are using that product or service. Royalties and licensing, you have to make sure whoever you’ve given that permission to, to use their idea and make money from it, is doing a good job. They’re maintaining the good quality and stuff like that. You have to be on the watch out for people who are going to do knock offs and try to copy it and infringe on your patent or intellectual property or whatever it is.
Brandon: All that copywriting stuff that we do on Facebook and social media maybe that? I don't know?
Amanda: I don't know but really the point is with the forms of passive income we think about nowadays how passive are those forms of income really? Are they really passive?
Brandon: Yeah, which leads us to some questions, grandma might ask us. She might ask us about this idea of passive income. She might ask if you knew you would have diminished capacity to earn wages for 20 to 30 years of your life, wouldn’t you want to set up some passive income for those years?
Amanda: Absolutely, if I knew I couldn’t earn money, you know like go to work, have a job or that I would only be able to work part time or something like that I’d want to have some passive income set up so that I don’t have to reduce my lifestyle during those 20 to 30 years of my life.
Brandon: No one wants to reduce their lifestyle, that’s for sure.
Brandon: And she would also ask on top of that question isn’t diminished capacity to earn wages just another way to think about that big word “retirement.”
Amanda: That’s fascinating, the way to think about retirement is that you might not be able to earn wages at that point, either your health is failing or you’re physically unable or mentally unable to work, you know, memory loss, dementia, all kinds of things that happen to us when we’re older and we could live 20-30 years with that and so we need some money even though those kind of things do happen to us.
Brandon: I think that happen to your mom, right? I mean she has had a stroke and she has everything about her but she had some diminishing capacity because of a stroke that she didn’t think was going to happen. No one plans for a stroke.
Amanda: And she’s going to be probably living 30 plus years of her life after that.
Brandon: Yeah, she’s still really young.
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Brandon: So even if all your facilities stay working, your memory; I know my memory is great, right Amanda?
Amanda: No it’s not.
Brandon: I mean I think – no it’s really not that great.
Brandon: Your ability to climb stairs, I do think I’m a good stair climber. I do it all the time at the gym, right?
Brandon: And I have a lot of sharp wits.
Amanda: He thinks he’s funny.
Brandon: Do you think there’s a pretty good chance that you’ll want to or be forced to work less or maybe not at all?
Amanda: Right, so even if we age beautifully and we still have good mental and physical capacity to work, there could be circumstance where we’re not able to work. There could be layoffs at the company that we work at and we might not be able to find a new position because no one’s hiring an 80 year old or something, or 120 year old. Also, there’s the possibility that someone we love gets sick and we want to not work so that we can care for them and spend time with them. There are lots of reasons that people go into retirement, not just because they want to. In fact, I read a statistic that shared that of all the people that are retired 50% were forced into retirement.
Brandon: That’s a big number, 50%.
Amanda: Huge number, half of the people that are retired were forced to be retired. That they didn’t choose it for themselves and so if you’re going to be forced into that situation, some passive income setup would probably be a pretty good idea to get going.
Brandon: That’s why thinking about passive income is so important and why I’m really glad that people are thinking about that idea in our businesses and in our future – we’re thinking about those kinds of things. So given that for 20 to 30 years of your life you might be forced to or be unable to earn wages, you pretty much have to set up some sort of passive income. So do you want the passive income, you’re required to disappear if and when the stock market collapses?
Amanda: Absolutely, I wouldn’t want to lose my passive income because of choices that were made on Wall Street by people I don’t even know.
Brandon: And another question to ask is would you rather the passive income be secure but grow more than a savings account is currently doing?
Amanda: Yeah, I wouldn’t want to put my money into a savings account either that’s only going to get 1 or 1-½ % return growth, that’s not much better than just throwing it in a shoe box and putting it under my bed. You know?
Brandon: Yeah. No one is going to – hopefully not – just put it under their bed.
Brandon: Maybe that would be some safe place but not so safe. These are the kinds of questions grandma would ask you and she would want you to ask yourself.
Amanda: Absolutely, because grandma knew that grandpa and she wouldn’t be able to or maybe they probably wouldn’t want to earn wages forever. Who really wants to be working when they’re 95? She might even lose grandpa while she still has many years left in her own life.
Brandon: Yeah that happened with my grandma, for sure.
Amanda: Mm-hmm. That’s why they set up passive income for themselves. So, we wanted to share some of the characteristics of what grandma’s passive income looks like. Her passive income requires no luck, skill, or guess work. Everyone can do it, not just clever internet marketers or real estate gurus. I mean, grandma didn’t even have the internet and she was able to set up her stream of passive income.
Brandon: So how did she survive without the internet? I’m still questioning that thing.
Amanda: Maybe we’ll get into that in future episodes. Also, there’s no guess work. She knows where her passive income is and where it’s going to be at any point in time. She’s not guessing on those things. Also, with grandma’s passive income it can last as long as she does. It’s not going to disappear if the stock or real estate markets tumble or as technology changes. In fact, grandma’s passive income grows and compounds year after year. That’s pretty impressive that she can count on that. Also, grandma’s passive income gives grandma 100% control over her money. She can decide how much she wants and when she wants it and only her. She can decide that for herself. The big thing here is that the Internal Revenue Service currently has no control over her passive income.
Brandon: So obviously, we’re not talking about Social Security here since grandma would be left to the government’s control and stipulations about receiving that benefit.
Amanda: Correct. So not only that she gets the control but with this final thing, this really big whammy you’ll be able to tell this is definitely not Social Security. Here’s the last characteristic of grandma’s passive income, it’s most often tax free.
Brandon: What? No.
Amanda: Right, that sounds too good to be true. And that’s exactly what we’re going to be talking about here on Grandma’s Wealth Wisdom podcast. We’re going to be talking about this form of passive income and all the different things that it can mean for you throughout your life and we’re going to be talking about some things that sound too good to be true because, frankly, we’ve forgotten about them in 2018 when this episode is coming out. But back in grandma’s day, they were popular and common, the kinds of things we’re going to be talking about.
Brandon: We went a little crazy in the past generation.
Amanda: Well, I don't know if crazy is the word to use.
Brandon: Well, maybe. I won’t use that word, crazy.
Amanda: Yeah. We’ve forgotten the things that grandma would remind us about from back in her day. So that’s what we’re going to be sharing. We’d also love to hear from you. We’d love to talk and hear what kinds of strategies you’re using, hear what you think about some of the strategies that we’re talking about that grandma would use and would share that you should consider. We don’t want this to just be a one-sided conversation; we want to hear from you too. So, we invite you right now to go GrandmasWealthWisdom.com/call to schedule a 15-minute phone call with us just to share a little bit, your own money story, talk through some of these strategies, tell us what kind of things you’d like to hear about on the podcast, all those kinds of things. So again, that’s GrandmasWealthWisdom.com/call to book that 15-minute call with us. We’d love to have a nice chat, maybe drink some coffee and eat some cookies while we’re talking if at all possible just like grandma would want us to do.
Brandon: So, to wrap it up today, here are the main points to remember. We started today talking about how grandma can see the snakes right under our noses or the rat poison we’re eating, a little plug towards my sister who did that, but heed grandma’s advice to avoid get bit or poisoned as you get older. You’re making an income now and hopefully a pretty good one but you might not always be able to. In fact, again, statistics say you’re likely to be forced into retirement. So grandma would advise setting up a passive income system you can rely because you never know when the next 1929 or 2008 crisis is going to hit. Worst case scenario, there’s a collapse right before or during your retirement and you can’t wait for it to recover. Best case scenario, your money is safe, available, and growing no matter what’s happening on Wall Street and the Internal Revenue Service can’t get their hands on it either. So remember, schedule a call with us to find out more and if grandma’s strategies would work for you.
Amanda: Be sure to join us for the next episode. Hit that subscribe button so that you’ll never miss an episode but next time we’ll look at two main strategies commonly used for making major purchases like cars and homes. Grandma’s strategy allows you to make that major purchase but not lose out on money that you could’ve made if you used the money differently or give additional money away beyond the cost of the item that you’re buying. A lot of us when we make a major purchase, we pay way too much and we’ll share exactly how you’re doing that and how to avoid it in the next episode.
Brandon: Until next time, keep building your wealth simply and sustainably for your own future and the future of our grandchildren’s generation.