Passive Income: Only for Real Estate Tycoons? | Erik Averill, Brandon Averill, Justin Dyer | AWM Insights #74 - a podcast by AWM Capital

You see it all over the news and social media: wealthy people talking about how they generate monthly income without ever having to work. Purchase a home or rental property, then open your mailbox every month and collect a check. Rinse and repeat.

Do you really need to become a real estate tycoon to build wealth? Is it really that easy? Of course not. 

In this episode, Erik, Justin, and Brandon highlight how to view passive income, and its role in building wealth. They discuss viewing it as a means to an end - the end being financial freedom. At the end of the day, wealth is what you take home after taxes/expenses, so it's important to have passive income conform to your priorities, and not the other way around.

EPISODE HIGHLIGHTS

• (0:38) The news you should know: Good July jobs report, but it's more important to look at the trend; 
• (1:37) Rihanna is now a Billionaire. How celebrities and are taking agency over their earnings;
• (3:21) Pepsi gets rid of Tropicana, and rebalances their portfolio of drinks. They objectively evaluate their drink lineup, which provides a good model for how people should evaluate their investment lineup.
• (4:46) Being financially free is the end goal. Being able to live life on your terms is what's important. Passive income shouldn’t be an end in itself.
• (6:52) Passive income v. Capital Appreciation. Judging a winner depends on net of cost return.
• (9:41) There's no bank teller in your home or rental property that can deposit cash on demand.
• (10:35) What you pay for an investment matters. Costs erode returns.
• (12:18) Risk and return are related. Does my return justify the risk?
• (14:29) Generational wealth is never built on a one-size-fits-all approach. Your priorities should inform your passive income allocation, not the other way around.
• (16:11) Rockefeller family case study. How they have built wealth through seven generations. Hint: It wasn't because they put all their money in rental properties.

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