AI transcript
0:00:03 Active versus passive income.
0:00:05 With our limited time,
0:00:06 what should side hustlers focus on?
0:00:08 What’s up, what’s up, Nick Loper here?
0:00:09 Welcome to The Side Hustler Show
0:00:12 because your nine to five may make you a living,
0:00:14 but your five to nine makes you alive.
0:00:15 And that’s the question on the table.
0:00:17 If you’re already earning active income,
0:00:19 trading time for money at your day job,
0:00:21 doesn’t it make sense to pursue passive income
0:00:23 in your side hustle hours?
0:00:25 Well, maybe, but maybe not.
0:00:26 And what is truly passive?
0:00:28 After all, is there even such a thing?
0:00:30 And what’s the true cost of earning it?
0:00:32 Excited to dive into this topic
0:00:35 and to help me out is Mr. Passive himself.
0:00:36 Mike Hoffman is back on the show.
0:00:37 Mike, welcome back.
0:00:38 – Thanks, Nick.
0:00:39 Fire it up to be here.
0:00:40 – You bet me.
0:00:41 As well, you might remember Mike
0:00:44 from the Vending Machine episode we did earlier this year.
0:00:48 That’s number 599, I wanna say 599 in your archives.
0:00:52 If you missed it, vendingpreneurs.com is his home base.
0:00:54 We’re going three rounds with Mike today.
0:00:57 First up is that active versus passive income debate
0:00:59 to help you decide where it’s really best
0:01:01 to allocate your time, energy, attention.
0:01:04 Next up, we’re doing Donate a Business Idea.
0:01:05 Stick around for that and wrapping it up
0:01:08 with the triple threat, a marketing tactic
0:01:10 that’s working right now for Mike or his students,
0:01:12 a favorite new tool or resource,
0:01:15 and his favorite book for the last 12 months.
0:01:17 So active versus passive income.
0:01:21 Love this topic and I wanna frame it this way.
0:01:24 We know inherently that passive income is important.
0:01:27 I mean, Warren Buffett, the Oracle of Omaha
0:01:28 puts it in no uncertain terms.
0:01:29 He says, look, if you don’t find a way
0:01:31 to make money in your sleep,
0:01:32 you’re gonna work until you die.
0:01:34 And like, well, I don’t necessarily want that.
0:01:36 So let’s go back to the first part.
0:01:38 I gotta figure out a way to make money in my sleep.
0:01:39 So we know it’s important,
0:01:41 but we don’t get a lot of education
0:01:44 on how to actually set this up for ourselves.
0:01:46 And in fact, a lot of our education,
0:01:49 maybe most of our education is geared toward active income.
0:01:50 Go to school, get a good job.
0:01:52 That’s like the end game.
0:01:54 That’s the end goal for a lot of people,
0:01:55 a lot of the educational system.
0:01:57 Get a good job that pays well.
0:02:00 Go find yourself a way to earn active income.
0:02:02 And I think that’s a perfectly normal way to start.
0:02:04 It’s probably where most people start.
0:02:07 And then along the way, invest as much as you can
0:02:10 so that someday, maybe decades later in a lot of cases,
0:02:13 you could begin drawing down those investments,
0:02:14 kind of the traditional path.
0:02:16 But it doesn’t have to be that way.
0:02:17 So Mike, kick us off here.
0:02:19 How do you view this debate
0:02:22 from the perspective of somebody who is working full-time?
0:02:24 They’ve got the goal to make extra money.
0:02:26 That’s why they’re listening to the side hustle show
0:02:27 to start something on the side,
0:02:29 but they’ve got limited hours to work with.
0:02:32 Where does this conversation even start
0:02:33 on active versus passive?
0:02:36 – The first step is, where’s your passion?
0:02:38 And what’s kind of that fire in you?
0:02:40 ‘Cause the reality of the situation
0:02:43 is people’s day job is not their passion.
0:02:46 So whether that’s someone that’s passionate about,
0:02:49 I don’t know, being a mom and like being around their kids
0:02:53 and maybe they find a business idea that excites them
0:02:57 and flares their kind of entrepreneur journey on the side.
0:02:59 And they want to go down a path with that
0:03:00 because they’ve had kids,
0:03:02 but their day job just pays the bills.
0:03:04 So I think for me, it’s just aligning
0:03:05 with where your passions are.
0:03:09 And also understanding that a day job is just that.
0:03:11 It’s the stability you can use
0:03:15 to kind of explore this passion that you have.
0:03:16 – Now I’m going to flip it around.
0:03:18 Like one of your first passive income projects
0:03:19 is a rental property.
0:03:21 Can anybody say, oh, I’m passionate about owning
0:03:24 a rental property or I’m passionate about selling snacks
0:03:25 and drinks in an automated way?
0:03:27 Like I’m passionate about the income that it provides
0:03:28 and the wealth that it could build,
0:03:30 but I don’t know if I’m passionate
0:03:31 about the sausage being made.
0:03:33 – 100% Nick, and I was having this conversation
0:03:35 with one of our vendingpreneurs yesterday
0:03:37 ’cause it’s like, you don’t go to school
0:03:40 to learn about vending or you don’t go to trade school
0:03:43 to learn about the margins of a candy bar
0:03:46 that you resell or anything like that.
0:03:50 But the passion for me is to spend more time with my kids.
0:03:51 Like I was singing about it this morning
0:03:55 where there was a big kind of airlines had a freeze,
0:03:57 IT shut down, what have you.
0:04:00 And think about all these corporate employees
0:04:02 that are on their road for their job
0:04:05 and they’re just scrambling to find a way to get home today
0:04:07 to be with their kids this weekend.
0:04:08 And the reality is a lot of them
0:04:10 aren’t going to be able to get home till tomorrow.
0:04:12 And like, that doesn’t have to be you.
0:04:13 – Okay, that’s fair.
0:04:16 So if you have built up some other means of income
0:04:19 then you don’t have to do the job
0:04:20 that you dislike forever and ever.
0:04:22 – Correct, yeah.
0:04:24 It’s kind of like the Justin Walshmine site where it’s like
0:04:27 you shouldn’t just leave your nine to five
0:04:29 and then all of a sudden your business idea blows up
0:04:31 and in six months you have to go back into it.
0:04:34 You should build this passion and vet it
0:04:36 while you still have that active piece.
0:04:37 – That’s fair.
0:04:41 The challenge is having been a participant
0:04:44 and an observer in the entrepreneurial world
0:04:46 for the past 15, 20 years.
0:04:51 More hours have been spent in vain chasing passive income
0:04:54 than chasing the elusive passive income,
0:04:56 the latest and greatest strategy or tactic
0:04:59 to make money on the internet or whatever it may be,
0:05:01 where it’s like you would have been so much better off
0:05:03 had you just leveled up your skills,
0:05:04 got a better paying job,
0:05:07 or even gone the freelancing or consulting route
0:05:09 and you’ve gotten paid for your time
0:05:12 versus toiling away because sometimes this works out.
0:05:15 And this is like the case of the site isolation blog,
0:05:17 for example, like the first years of the site
0:05:19 like so far below minimum wage,
0:05:21 trying to figure out the internet
0:05:23 and trying to make that into a thing
0:05:25 and will it into existence,
0:05:27 where it’s like in the near term,
0:05:29 would have been so much better off financially,
0:05:31 just going and getting paid by somebody.
0:05:33 Like go solve a problem, go get paid for it.
0:05:34 – Absolutely, you’re spot on.
0:05:36 And that’s like that valley of death.
0:05:38 You talk about it when people are trying
0:05:42 to like build a business or do work with the government.
0:05:44 It takes eight years of red tape to find,
0:05:46 like you look at Palantir right now.
0:05:49 Palantir is like booming from a business,
0:05:50 but they went through this valley of death
0:05:52 just to break into the government.
0:05:53 Same thing with businesses.
0:05:58 Like our vending route right now is flourishing,
0:05:59 but those first five years,
0:06:03 it was like chop wood, carry water, chop wood, carry water.
0:06:07 It was boring and it was scary all at the same time.
0:06:10 – Yeah, the way that I kind of like to frame it
0:06:13 is thinking of your income as a pie chart, right?
0:06:15 And for most people, especially straight out of school,
0:06:18 like I’m trading time for money,
0:06:20 it’s 100% active income.
0:06:22 And then to get to that Warren Buffett finish line
0:06:24 of not working until you die,
0:06:27 eventually it’s going to have to be fully time leveraged
0:06:28 or fully passive income.
0:06:30 And maybe you still want to do some consulting projects
0:06:32 or maybe you want to work part-time or something.
0:06:34 But like trying to build,
0:06:35 first starting with a little sliver,
0:06:38 but then building that passive income piece of the pie
0:06:41 such that you don’t need the active part anymore
0:06:42 or it becomes optional.
0:06:45 – Yeah, I love that pie chart, that’s a great analogy
0:06:48 and you’re just trying to move those percentages
0:06:50 as far over as possible.
0:06:52 – All right, so you like real estate, you like vending,
0:06:55 what other passive or time leveraged models
0:06:58 might be beginner friendly or would be on your radar?
0:07:00 – I think even just taking a step
0:07:03 and really kind of understanding the percentages
0:07:05 of your income and not getting into like,
0:07:08 do you make enough to be able to invest in a rental
0:07:11 or invest in a vending machine or route or whatever?
0:07:14 It’s more like understanding, okay,
0:07:17 how much of your take home pay is spent on rent?
0:07:21 How much of it is going into a index fund
0:07:24 or something that is just at the simplest level?
0:07:27 You talked about earlier when you’re in your 20s,
0:07:31 you can get so far ahead if you just are disciplined enough
0:07:35 to take a percentage of your income no matter what that is
0:07:38 and start building that compounding effect
0:07:42 in whatever asset class you want to start in.
0:07:43 – You have a rule of thumb of like,
0:07:46 well, I’m going to put 10% into
0:07:49 some speculative passive projects
0:07:52 or like I never really thought about it that way.
0:07:56 – For my wife and I, we’ll do 10 to 15%
0:07:58 into more of our conservative,
0:08:01 like out of sight, out of mind index funds every month.
0:08:04 And then yeah, we have another probably 10%
0:08:06 that’s high risk.
0:08:10 Our financial advisor might not think it’s the safest play,
0:08:12 but it’s something I’m bullish about.
0:08:14 I mean, even in the vending space right now,
0:08:17 there’s so many smart machines at now
0:08:19 are adding like digital ad screens to them.
0:08:22 And there’s like these speculative opportunities
0:08:26 for revenue that have never existed in this niche before.
0:08:29 So that’s kind of where I’m going right now.
0:08:31 And then all these like unattended,
0:08:34 the Amazon just walk out technology and stuff
0:08:38 just really trying to kind of think of five years ahead.
0:08:40 And who knows, it might fall on this face.
0:08:41 – Okay, so I’m thinking of first,
0:08:45 so it starts off from a place of financial stability.
0:08:46 Like that’s got to be step one.
0:08:48 Like I got to have enough income to cover my expenses
0:08:51 and then having an understanding of where
0:08:53 that income is allocated.
0:08:55 How are my dollars going to work for me?
0:08:58 And then taking a percentage of that, of the surplus,
0:09:00 hopefully, and saying, okay, in your case,
0:09:02 I’m investing that back into the business
0:09:04 and more speculative projects and saying,
0:09:06 okay, this is like the play money.
0:09:08 Like everything else is,
0:09:09 maybe it’s not super, super comfortable,
0:09:11 but it’s like, I’m not going backwards.
0:09:14 And having a little bit of financial breathing room
0:09:16 as a baseline.
0:09:18 And so maybe this whole passive income discussion
0:09:20 is one of privilege to be even able to tackle that.
0:09:22 Like, no, I’m just trying to make ends meet.
0:09:23 I’m trying to put food on the table.
0:09:25 Like I got to go earn some money today
0:09:28 versus seeing if I can make some investment
0:09:30 or start some project that may pay back
0:09:31 in six to 12 months.
0:09:33 There’s something powerful in what you just said.
0:09:35 And I think it comes back to like your habits, right?
0:09:39 Like if you think of a book, I might recommend later,
0:09:41 but I’m going to spoil it by talking about it now.
0:09:46 Profit first, the whole concept is you pay your profits
0:09:48 before you pay off your expenses.
0:09:51 So right away, when you get income coming in,
0:09:53 it goes into your profit bucket.
0:09:54 Well, guess what’s going to happen?
0:09:57 Naturally, you’re going to really watch
0:09:59 what your expenses are because now
0:10:01 that profit first is paid out
0:10:03 and you’re only left with so much.
0:10:06 So the same concept when it comes to our personal finances
0:10:08 and investing in things like passive income,
0:10:12 when you’re a young kid, I will teach you to be rich.
0:10:13 Another book always talks about
0:10:16 immediately the day you get paid,
0:10:20 you need to direct deposit into your stock portfolio,
0:10:22 that money, so then your plate money
0:10:25 and your actual bank account is a lot less
0:10:27 than you spend too much.
0:10:30 And it’s like, “Oh crap, I forgot to invest this month.”
0:10:33 So that whole kind of, just even habits of,
0:10:34 at the end of the day, it all starts
0:10:36 with live below your means, right?
0:10:39 If you’re 20% taken out
0:10:41 before it even hits your bank account,
0:10:44 that’s the beauty of like Ross and these 401ks,
0:10:46 is you’re already pulling that out
0:10:49 before it hits what you think you can spend with.
0:10:51 – Yeah, this is super simple,
0:10:53 but like you never really heard it phrased,
0:10:53 actually before Brin’s mom,
0:10:55 before my mother-in-law kind of explained
0:10:59 that’s how she as a single mom was able to save and invest.
0:11:02 She’s like, “I would get the direct deposit paycheck
0:11:05 for pretty much exactly what I knew my expenses
0:11:05 were gonna be that month.”
0:11:08 And everything else was out of sight, out of mind,
0:11:09 in savings and investments.
0:11:11 It’s like, I just never really, whatever,
0:11:15 the automated 401k deposit out of the paycheck,
0:11:16 that was fine, but then everything else
0:11:17 was just hit the checking account.
0:11:19 I was like, “All right, this is play money.”
0:11:22 It’s still kind of inherently new to live below by means,
0:11:25 but nothing was set up and systemized and automated
0:11:29 the way that it could have been to maybe accelerate that
0:11:31 or just make it more of a habit or make it more automatic.
0:11:33 – Yeah, yeah.
0:11:35 And then it forces you to think about
0:11:37 where your big rocks are.
0:11:39 You got people these days on social media
0:11:41 that are like, “Oh, I’m gonna start doing this or that
0:11:43 or I’m gonna work on my offer
0:11:45 and I need to get my SEO
0:11:48 and all of these other ancillary things figured out.”
0:11:51 And it’s like, let’s just start posting content once a day.
0:11:54 – Yeah, I know Kagan calls it the rule of 100,
0:11:56 like post a hundred pieces of content
0:11:58 or come up with a hundred ideas
0:11:59 and then come back and talk to me
0:12:01 or Jimmy, MrBeast has the same thing.
0:12:03 Like, why don’t you post a hundred videos
0:12:03 and then come talk?
0:12:06 Either you burn out and don’t do the hundred
0:12:08 and I don’t have to talk to you
0:12:10 or you do the hundred and you figured it out along the way
0:12:11 and I still don’t have to talk to you.
0:12:14 So I was like, this is great little bit of advice from him.
0:12:16 The counterpoint that I maybe want to make,
0:12:20 especially on the passive versus active side
0:12:22 is we’ve seen some examples
0:12:24 of where near term cash flow,
0:12:26 obviously chasing active income,
0:12:29 service businesses, consulting, freelancing,
0:12:32 you’re gonna ring the cash register right away.
0:12:33 And we’ve seen some examples
0:12:36 of where that can actually transition
0:12:39 into something more passive or more time leveraged.
0:12:41 A couple of examples, we have Wes Schaefer
0:12:44 who was the sales whisperer, I think was his brand
0:12:46 on the show years ago.
0:12:49 And he was doing these kind of like sales funnel
0:12:51 automation build outs and consults.
0:12:53 Like, hey, we’ll analyze your business.
0:12:56 And along the way, so he’s getting paid to do that upfront,
0:12:59 but along the way becomes a certified reseller
0:13:02 for HubSpot for infusionsoft, now keep.
0:13:06 And oh, by the way, they pay recurring commissions to hit.
0:13:07 It’s like, hey, based on your business,
0:13:10 we found that HubSpot was the best fit for you.
0:13:12 We’ll sign you up, we’ll get it all set up for you.
0:13:16 He was able to turn that one time active income project
0:13:19 into recurring level of passive income for years.
0:13:21 One of my other favorite examples is Matt Boknock.
0:13:23 He was like the motorcycle repair guy.
0:13:25 Hey, don’t take your bike to the dealership.
0:13:26 Don’t pay dealership rates.
0:13:27 Come, you’ll bring it to me.
0:13:29 I know what I’m doing, I’ll fix it in my garage.
0:13:32 Hours for dollars side hustle after sending the kids to bed.
0:13:34 But Matt set up the camera in the court of the garage,
0:13:36 films himself doing the repairs.
0:13:39 Last we spoke, he had 100,000 YouTube subscribers.
0:13:42 He was selling these engine rebuild videos
0:13:43 as a digital products.
0:13:46 And it didn’t take long, I’m sure it felt long,
0:13:48 but it didn’t take long from the outside looking in
0:13:50 where the quote unquote passive side of the business
0:13:53 far outpaced the turning wrenches side of the business.
0:13:56 And it’s interesting that some of these like little,
0:13:59 maybe it’s selling your sawdust type of products,
0:14:01 but when you start by doing the work
0:14:04 and building skills and relationships,
0:14:06 sometimes those passive doors start to open
0:14:09 or those more time leveraged doors start to open.
0:14:11 – Yeah, I was reading an article about this last night
0:14:13 where there’s something to say
0:14:15 about the middle man and everything.
0:14:17 Like if you look at Uber and Airbnb,
0:14:21 what they have in common is they don’t have any cars
0:14:23 and they don’t have any homes.
0:14:26 They’re just the middle man of connecting someone
0:14:30 that’s looking for a home in Washington on their vacation
0:14:31 and someone that has a home.
0:14:33 Just like Uber, you look at,
0:14:34 and like the sales whisper thing,
0:14:39 he’s just that dot that’s connecting this potential person
0:14:43 that needs a CRM to hub spot or to whatever that vehicle is.
0:14:45 And the same thing I keep coming back to
0:14:46 with our vendingpreneurs,
0:14:50 ’cause you’re spot on, like you gotta reduce friction.
0:14:53 For me, like I’m trying to make it as easy as possible
0:14:55 for people to get product.
0:14:56 Like they shouldn’t have to go to Costco
0:14:58 and spend four hours.
0:15:01 If we can just get it delivered to their door once a week
0:15:05 at a bulk price that’s just on autopilot
0:15:07 based on the sales of whatever that,
0:15:09 there’s just so many levers is like just that,
0:15:11 I mean, Amazon, it’s just a middle man.
0:15:15 Anything in life, you’re just trying to be that connector.
0:15:17 And last time I had that aha moment where it’s like,
0:15:20 Uber has no cars and Airbnb has no homes, like what?
0:15:23 – Right, Facebook doesn’t create any of their own content.
0:15:26 Safe thing with TikTok, they’re just content platforms.
0:15:27 There’s something to that.
0:15:30 And this is a common path for side hustlers
0:15:31 to start freelancing on the side.
0:15:33 Yes, it’s still active income.
0:15:35 Maybe they take that full time.
0:15:37 Maybe they start to hire subcontractors
0:15:39 where it’s like, okay, now it’s a little bit more
0:15:41 time leverage is not me laying the bricks
0:15:43 or doing the day-to-day labor anymore,
0:15:46 but I put myself in a management layer.
0:15:48 So different ways to transition from active income
0:15:52 to passive income in the middle man method is similar.
0:15:55 It could be, oh, I started a house cleaning business,
0:15:56 but I didn’t want to do the cleaning.
0:15:58 So I went out and hired people who already knew
0:16:00 how to do the cleaning.
0:16:02 We’ve seen examples of that on the show
0:16:06 from window washing to graphic design and video editing.
0:16:08 You can do it offline, you can do it online,
0:16:11 but the middle man game absolutely is a viable path.
0:16:13 – Yeah, and then even you talk about that home cleaning,
0:16:17 like those product companies will fight for you
0:16:19 to buy their product to use for the cleaning.
0:16:23 You think of like Airbnb’s and all of the restaurants
0:16:26 near you, they want your business and they will pay you
0:16:29 if you promote their restaurants and your check-in folder
0:16:31 when guests come to your Airbnb.
0:16:35 – Okay, okay, interesting.
0:16:35 I never thought about that.
0:16:38 And now I will definitely pay more attention
0:16:39 to those little like welcome binders.
0:16:40 – Yeah!
0:16:43 I love those houses, like was that a paid placement?
0:16:45 Yeah, mention our offer code for 10% off your check.
0:16:47 – Side hustle nation, you get 10% off.
0:16:48 – Yeah, there you go.
0:16:49 – That’s a lot of wings.
0:16:52 – One other consideration here on this active
0:16:57 versus passive debate is related to your home life situation.
0:17:03 So for me, it was grateful to be living below my means
0:17:06 and had my wife who had this steady job.
0:17:08 And so when there were down years in the business,
0:17:11 it was okay, we could still live comfortably on one income.
0:17:15 And that freed up the time and the mental energy
0:17:19 to focus on these more time leveraged business models
0:17:20 where even in the near term,
0:17:23 it wasn’t going to have this great ROI
0:17:26 or it seemed was chasing this passive income.
0:17:30 And sometimes it took months or years to materialize,
0:17:32 but because we’re playing it as a team sport,
0:17:34 it still worked out.
0:17:35 And so maybe that’s a conversation to have
0:17:37 with your spouse or partner to figure out,
0:17:39 well, what role is everybody going to play here?
0:17:41 But that was something that worked out
0:17:42 in our favor in our house.
0:17:43 – Yeah, no, that’s great.
0:17:46 And we had the same similar situation last year.
0:17:49 My wife actually lost her job
0:17:51 and she was five months pregnant.
0:17:54 And also our healthcare was with her job
0:17:56 because I was just an entrepreneur.
0:17:58 So we took care of your healthcare.
0:18:00 And so it was like a scramble moment.
0:18:02 But as long as you’re living below your means
0:18:04 and you have those different income streams
0:18:05 for the rainy days,
0:18:08 like you said, the mind share,
0:18:10 it was just a simple
0:18:12 and could have been a very emotional roller coaster,
0:18:15 but it allowed us to stay neutral in the moment.
0:18:16 – You ever get to the point of like,
0:18:18 this passive income stuff sucks.
0:18:19 It doesn’t work.
0:18:22 How to go figure out how to make extra money,
0:18:23 just selling my skills.
0:18:25 Do you ever have that conversation
0:18:26 or does there come a point
0:18:29 where you have people trying to build websites
0:18:32 or do merch by Amazon or do dropshipping
0:18:35 or whatever the latest thing is,
0:18:37 you never quite hit it right.
0:18:40 And I feel for those people
0:18:43 ’cause all of these models can work and do work,
0:18:46 but sometimes there’s a factor of luck involved.
0:18:48 It sometimes is a factor of timing.
0:18:49 And other times it’s like, I don’t know,
0:18:51 this just isn’t the model for you.
0:18:52 That’s where I struggle with.
0:18:54 I’m in the passive income camp too,
0:18:56 but I definitely see the benefits of just like,
0:18:58 like if you’re trying to make extra money, go make it.
0:18:58 Go get it done.
0:19:00 – Yeah, I see both sides for sure.
0:19:02 I mean, I do do a little bit of consulting
0:19:04 for our special operations community
0:19:06 with human performance.
0:19:07 That’s a lot more active,
0:19:10 but I think the downside with like consulting
0:19:13 or time for money is like with consulting,
0:19:16 what you did for them yesterday doesn’t matter.
0:19:18 It’s what are you gonna do for me today?
0:19:19 – Yeah.
0:19:20 – Like that whole rat race is just,
0:19:22 to me it’s not sustainable.
0:19:23 You’re gonna get burnout,
0:19:27 you’re gonna just play that substitution of time for money.
0:19:30 And it’s just, you might do it ’cause it’s your passion
0:19:33 and you believe in the mission of whatever you’re
0:19:36 an expert in, but it’s a tough business model.
0:19:37 – Well, if the hourly rate is strong enough,
0:19:40 it might be compelled to keep going.
0:19:43 We had a guy who was doing like college admissions essay
0:19:45 consulting like a super, super niche business.
0:19:48 It was like 220 something bucks an hour.
0:19:51 Like, I’m okay with this at a certain price.
0:19:53 You can kind of just play the traditional route of like,
0:19:55 yeah, I’m gonna live below my means
0:19:57 and invest the difference versus like,
0:19:59 okay, if I’m just kind of squeaking by
0:20:03 or my current skill set wouldn’t afford a $200 hourly rate,
0:20:06 okay, now I’ve gotta figure out how to build an income stream
0:20:08 that maybe is unrelated to that or has some more leverage.
0:20:09 – Yeah, exactly.
0:20:11 I could see that side for sure.
0:20:12 – All right.
0:20:13 So is there a sweet spot?
0:20:16 So let’s say I’m eight hours a day is at my day job,
0:20:18 eight hours a day, hopefully sleeping.
0:20:19 And I’ve got eight hours left.
0:20:22 Like, is there a sweet spot of like rule of thumb?
0:20:26 What time should people allocate to a passive income pursuits?
0:20:27 – As far as like buckets,
0:20:28 I mean, I think it’s like anything.
0:20:31 You just, you gotta be balanced
0:20:33 or there is gonna lead to some burnout.
0:20:35 You gotta be balanced on all the things
0:20:39 if you’re not doing much and you’re sleeping too much
0:20:42 and you’re just on social media every night.
0:20:44 Like you’re just gonna get in a rut and feel stuck
0:20:47 and spiral and watch news all day.
0:20:50 And then the other side of it is if you’re constantly working
0:20:52 and you’re just gonna feel like
0:20:54 you’re never gonna get ahead.
0:20:56 So I think there’s always gonna be that balance.
0:20:59 And I also think for me, just like with training,
0:21:01 it’s periodization.
0:21:03 And I’m a huge believer in micro dosing
0:21:06 and doing a little bit every single day
0:21:07 versus like, oh, we’re gonna work five days
0:21:09 and have two days off, but Sunday,
0:21:11 you’re stressed out thinking, you know,
0:21:12 the Sunday is scary as you’re thinking
0:21:13 about the week ahead.
0:21:17 So like, why not spend an hour on Saturday and Sunday?
0:21:19 If you can, before your kids wake up,
0:21:22 just do a little bit every day.
0:21:23 And same thing with Friday.
0:21:25 Like you shouldn’t have to work past noon
0:21:27 if just because it’s Friday
0:21:30 and you’re supposed to work till five is ass backwards.
0:21:32 – Yeah, this is maybe the key to it.
0:21:34 Being proactive about it,
0:21:37 no matter what your starting position is
0:21:38 and being consistent with it.
0:21:40 There’s nobody else is gonna do it for you.
0:21:42 And if you don’t put in the effort consistently
0:21:46 like that passive income is never gonna come down the road.
0:21:49 So even if it’s just a half an hour a day, an hour a day,
0:21:52 like if you can carve out a little bit of time
0:21:53 for these pursuits,
0:21:56 your effort starts to compound and accelerate
0:21:58 and you start to learn more and build your skills.
0:22:00 But then you start hopefully with that little sliver
0:22:01 on the pie chart.
0:22:04 And hopefully it starts to expand and expand
0:22:06 as you move forward with it.
0:22:09 And that’s kind of how I thought about
0:22:10 even when I was working full time.
0:22:13 Like, okay, so I’m gonna spend my evening and weekends
0:22:15 like trying to build up the passive income
0:22:17 so I could scale back the active income.
0:22:19 We’ve heard from other podcast guests too
0:22:21 where they, I went from working five days a week
0:22:23 to four days a week to three days a week.
0:22:26 Like as it started to grow and grow,
0:22:27 that was a byproduct of that,
0:22:30 being proactive about it and being consistent with it.
0:22:33 So that’s our active versus passive income debate.
0:22:35 I love this topic.
0:22:36 We’ll geek out about it all day with anybody.
0:22:38 So that’s round one.
0:22:41 Round two is donate a business idea.
0:22:44 We’ll be right back with that after a word from our sponsors.
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0:23:54 All right, we’re back with Mike, Mr. Passive,
0:23:58 and we’ve got Donate a Business Idea for Round Two.
0:24:00 This is something that you’d start
0:24:01 if you just had more bandwidth.
0:24:04 This is something that you think listeners could run with.
0:24:06 This is something that auto-exists in the world.
0:24:07 It’s pretty open-ended,
0:24:09 but I’ll tee it up for you with that.
0:24:12 – What’s where everything’s going with AI?
0:24:13 I think there’s something there
0:24:16 with almost like an AI assistant
0:24:21 that organizes things for you in a more tailored way.
0:24:25 And what I mean by that is you think of the AI for Siri,
0:24:30 where it’s like, okay, a vendingpreneur yesterday asked me,
0:24:33 hey, do you have an example statement of work
0:24:36 for a property contract?
0:24:37 On your phone, you could just be like,
0:24:40 hey, chat GPT, create a statement of work.
0:24:43 I’m a vending provider, send to Thomas,
0:24:45 and off it, and it’s out.
0:24:50 Or the whole idea of a grocery’s folder,
0:24:52 and you think of something you need to get
0:24:55 on your grocery run that’s three days away,
0:24:57 and you just want to add it to the list.
0:25:00 Or AI assistant, find the cheapest flights
0:25:04 for this upcoming trip, or what have you.
0:25:06 I just think there’s something there
0:25:09 between the intent of Siri combined
0:25:11 with a chat GPT or a Gemini
0:25:16 that will really streamline efficiency into buckets
0:25:18 that will help you get things done
0:25:20 the way that you could get them done.
0:25:25 – Okay, so thinking of an assistant chatbot type of product,
0:25:27 maybe niched down in the travel niche,
0:25:29 or the meal planning niche.
0:25:31 Like we add this to the grocery list,
0:25:33 or even better, add it to the grocery list
0:25:37 that on Saturday is going to trigger the Instacart order,
0:25:40 or something where it’s like, becomes more automated.
0:25:41 Am I hearing that right?
0:25:46 – Yeah, and also just kind of taking the Siri concept
0:25:47 to the next level.
0:25:49 Like, hey, reach out to Nick
0:25:52 and schedule this podcast episode on Friday
0:25:55 with what works with my Google calendar.
0:25:58 – Okay, there’s gotta be a way,
0:26:00 and probably there’s some like no code entrepreneurs
0:26:02 or even smarter people who will be like,
0:26:03 you do that already exists,
0:26:05 or I could build that in half a day.
0:26:06 And so maybe–
0:26:07 – 100%.
0:26:08 – Yeah, maybe there’s something to that.
0:26:11 One that always has been challenging for us
0:26:12 is the travel side.
0:26:14 And it’s like, I mean, you gotta churn through
0:26:17 a lot of different data on flights and times
0:26:19 and rates and routes to do that.
0:26:21 But one of the challenges for us,
0:26:23 like trying to plan annual friends giving is like,
0:26:25 well, do we go there?
0:26:26 Did they come here?
0:26:27 Do we meet somewhere in the middle?
0:26:28 What’s the best option?
0:26:29 Well, do they fly out of Detroit?
0:26:30 Do they fly out of Toronto?
0:26:32 Like, do we fly out of Vancouver?
0:26:33 Like, it’s not a Canadian holiday.
0:26:36 It’s like half off if you just drive for a couple of hours.
0:26:39 So it’s these weird, different variations
0:26:41 that are really tedious.
0:26:43 But it’s like, oh, I mean, maybe there’s a computer element
0:26:46 that can take some of that time-searching burden
0:26:46 off our plates.
0:26:49 – Oh, and take that a step further with like kids.
0:26:52 Like think about going into summer camps
0:26:54 and how you always wanna book a summer camp,
0:26:56 but you’re always too late and it’s already filled up.
0:26:59 And it’s like, now we’re already mapping out
0:27:03 camps for the fall or fishing whatever
0:27:05 on Saturday mornings or soccer on Sunday.
0:27:10 Like that whole layer of I live in Portland, Oregon,
0:27:14 find me all kids’ camps this fall
0:27:16 that are on Saturday mornings
0:27:19 that are still open for registration.
0:27:20 – Right, that are still open.
0:27:21 That’s the key.
0:27:22 – Yeah.
0:27:23 – That was literally a business.
0:27:25 We did like a business idea giveaway show
0:27:26 probably a year ago.
0:27:28 And that was literally one that came up.
0:27:31 It’s like the kid camp summer database.
0:27:32 Maybe they have affiliate programs.
0:27:33 Maybe they don’t.
0:27:35 But like either way, it would be super valuable
0:27:36 for parents to be like,
0:27:38 well, when does registration open for this?
0:27:39 How much does it cost?
0:27:40 Like what are the times?
0:27:43 So many of them are like nine to 1230 or something.
0:27:46 Well, I was really hoping for a little bit more coverage
0:27:47 than that, but maybe you could filter by that.
0:27:49 Like, yeah, there’s definitely something
0:27:52 if you were a data scraper or data aggregator type of person.
0:27:54 – Well, and then take a step further,
0:27:55 you look at the events on Google.
0:27:59 So you can go to what are the fourth to July events
0:28:00 in Seattle?
0:28:02 Well, then you tie that in with Gemini,
0:28:04 their AI kind of bot.
0:28:08 And it’s like, okay, what are their camps in Seattle
0:28:13 for kids under four that are open for the fall?
0:28:16 And then if the camp’s 50 bucks,
0:28:18 I would gladly pay an extra 10 bucks
0:28:21 just because I didn’t have to spend an hour on Google
0:28:25 seeing all these camp timelines are already full.
0:28:26 – Yeah, yeah, just book it for me.
0:28:29 That’s like the next stage of what do they call
0:28:31 a generative AI or something.
0:28:33 Like not just giving you answers,
0:28:35 but actually doing the thing, doing the task.
0:28:39 So it’s a brave new world out there.
0:28:41 I’m playing around with some more AI stuff every week.
0:28:45 It’s fascinating what it can do.
0:28:45 Well, very good.
0:28:48 We’ll put that down as the donate a business idea,
0:28:51 some sort of niche AI assistant,
0:28:53 maybe built with some no-code tools.
0:28:54 Bubble is a great one.
0:28:56 People are building their own GPTs.
0:28:59 One thing that has kind of been on the wish list
0:29:00 or to-do list.
0:29:04 You could feed in a decade plus of podcast transcripts
0:29:08 of blog content and create the side isolation GPT
0:29:10 just for Q and A or customer support.
0:29:11 Like how would you answer this question?
0:29:12 Like, well, it’s probably been answered
0:29:14 at some point in the archives.
0:29:17 And so there may be maybe that coming down the future.
0:29:20 It’s not at the top of the to-do list, but it’s on there.
0:29:22 – Yeah, I mean, think about how many people you’ve interviewed
0:29:24 and you’ve basically been asking questions
0:29:27 to figure out the ideal customer profile.
0:29:30 Like the questions you asked about,
0:29:32 “Okay, you want to start with vending
0:29:34 “and how much capital do you need?”
0:29:37 Like if I went into your website and I was like,
0:29:39 “Okay, I’m a 22 year old.
0:29:41 “I don’t have much capital
0:29:43 “or I want something that’s tax depreciable
0:29:45 “because my W2 is too high.”
0:29:48 And it’ll be like, “Okay, scooter rentals,
0:29:50 “vending machines and car washes
0:29:53 “are the top three that fit your persona.”
0:29:55 And then go reach out to these people.
0:29:58 Like there’s so much leverage in that content.
0:30:01 I mean, however many episodes you’ve had.
0:30:01 – Yeah.
0:30:04 – You’re basically a passive income.
0:30:05 I don’t want to say middleman, but record.
0:30:06 – Library, yeah.
0:30:07 – Yeah.
0:30:09 – Dude, that’s really cool.
0:30:10 Like some sort of personalized.
0:30:12 We attempt to do this a little bit
0:30:13 with like the quiz that’s on the homepage.
0:30:15 Like, “Hey, answer a few questions.”
0:30:17 And we’ll try and point you in the right direction.
0:30:20 But if it had a little more context,
0:30:22 yeah, maybe there’s something like that
0:30:24 that would be interesting, a little more conversational.
0:30:25 Like here are some business models
0:30:27 that ought to be worth a look here.
0:30:28 So very cool.
0:30:29 That is round two.
0:30:31 Round three is the triple threat.
0:30:33 We’re going to start off with number one here,
0:30:36 a marketing tactic that is working right now
0:30:38 for you or your students.
0:30:40 – A marketing tactic that always works
0:30:42 is anything that’s going to create urgency.
0:30:46 So we’re working on a big lead for a REIT
0:30:48 for our vendingpreneurs.
0:30:49 And I just throughout this,
0:30:52 hey, I’m going to be out in your neck of the woods
0:30:56 on this date and the executive assistant for the CEO.
0:30:59 I was like, hey, yeah, he’s got 20 minutes at this time.
0:31:00 And I just literally said,
0:31:01 I’m going to be out in your neck of the woods
0:31:04 and I don’t make it out your way very often.
0:31:06 And so it just created this urgency
0:31:07 for them to take a meeting.
0:31:10 So I think anything marketing-wise,
0:31:11 that’s going to create urgency.
0:31:13 Like Nick, I know you do a great job
0:31:16 with the whole kind of urgency of listening to your podcast
0:31:18 and just that whole side of it.
0:31:20 So for me, it’s always trying
0:31:22 to create people to take action.
0:31:23 – And then you go book that flight
0:31:25 or were you really going to be out there?
0:31:26 – No, that’s exactly what I did.
0:31:27 Then I went and booked that flight.
0:31:29 I mean, that’s how we broke into the government
0:31:31 was we would reach out to these general officers
0:31:32 at the Pentagon and say like,
0:31:35 hey, I’m going to be out in your neck of the woods
0:31:37 this week or this week.
0:31:38 When can you take a meeting,
0:31:40 send it to a four-star general,
0:31:43 he’d respond and be like Wednesday the 25th at five.
0:31:44 And it’s like, okay,
0:31:46 we better book a flight for that week
0:31:47 ’cause we just locked in a meeting.
0:31:49 And now we have that anchor meeting.
0:31:50 That’s really interesting.
0:31:53 We’ve kind of seen the same thing like in years ago,
0:31:56 hosting side hustle nation meetups.
0:31:59 If there’s no outside force, we could do it anytime, right?
0:32:00 There’s no urgency.
0:32:01 Another friend is coming into town.
0:32:02 Oh, perfect.
0:32:03 Let’s hold the beat up while you’re here.
0:32:04 We’ll hang out.
0:32:05 We’ll invite the other members of the community.
0:32:07 And so there’s something to that.
0:32:09 And then to reverse that and say,
0:32:11 I’m going to be, I’m going to be at town.
0:32:13 I guess only works if you’re willing to jump on that plane
0:32:14 and make it happen.
0:32:16 – Yeah, just the whole whatever that,
0:32:17 it doesn’t even have to be a travel thing.
0:32:19 It could be like a, you know, a vending lead.
0:32:20 I’m trying to close over here.
0:32:22 And it’s just like, hey,
0:32:25 I’m coming to meet with someone next to you
0:32:27 or you around before my meeting.
0:32:29 Whatever that urgency is.
0:32:31 – Yeah, I’m using this with online course sales,
0:32:33 like some sort of bonus that goes away,
0:32:35 some sort of limited time discount.
0:32:37 Used to do it in house painting.
0:32:39 Like, hey, I’ve got an opening in the schedule in two weeks.
0:32:41 I’d love for that spot to be yours.
0:32:43 10% off if you sign on the dotted line.
0:32:46 Some reason for people to take action
0:32:47 where they otherwise wouldn’t.
0:32:49 You’re like, well, nothing bad is going to happen
0:32:51 if I punt this off another week or another two weeks.
0:32:52 So some sort of urgency.
0:32:53 I like that one.
0:32:56 That is the marketing tactic that’s working right now,
0:32:59 creating some sort of urgency for whatever thing it is
0:33:00 that you’re selling.
0:33:05 Number two here is to recommend a new or new to you tool
0:33:06 that you’re living right now.
0:33:11 – What I’ve been using probably recently is more just kind of,
0:33:12 there’s multiple tools out there,
0:33:15 but just like tracking your financial worth,
0:33:17 whether that’s like, I think in power,
0:33:18 there’s a couple of tools out there,
0:33:22 but nowadays just being able to track your net worth
0:33:24 that aligns with your bank accounts for spending,
0:33:28 it aligns with you and your worth of paying down your mortgage,
0:33:30 like all those kinds of things that when we talk about
0:33:32 earlier, living below your means,
0:33:35 you actually can see why with something showing you
0:33:36 a light at the end of the tunnel.
0:33:37 – Yeah, very good.
0:33:40 It’s really similar to somebody else mentioned Monarch,
0:33:41 couple months on the show,
0:33:42 like really similar tool,
0:33:45 like kind of a personal finance dashboard.
0:33:47 You can bring in all your income,
0:33:48 all your expenses, all your assets,
0:33:49 all your different accounts,
0:33:52 like all kind of in this one customizable dashboard.
0:33:55 They were actually a sponsor on the show earlier this year.
0:33:56 And this is really cool.
0:33:59 Like I can log in, see the stuff that’s important to me
0:34:02 and been the beneficiary of the last nine,
0:34:04 12 months of like pretty serious bull market.
0:34:07 So like every time you log in, the number seems to go up.
0:34:08 You’re like, well, that’s, that’s rewarding.
0:34:11 I probably can’t get used to that going on in perpetuity,
0:34:12 but it is a cool tool.
0:34:15 And just to kind of get that snapshot view
0:34:18 of inflows, outflows,
0:34:20 and then the net worth picture is what I’m hearing.
0:34:21 – Absolutely, yeah, that’s been cool.
0:34:22 How about you?
0:34:23 – I knew to me too.
0:34:24 The one I’m playing around with right now
0:34:26 is 11 Labs for voiceover
0:34:31 and trying to create a clone of my own voice
0:34:33 to produce more YouTube videos,
0:34:37 to ultimately compliment the huge archive
0:34:39 of written content on the site,
0:34:40 where it’s like, oh, I would love to have a video
0:34:41 to compliment this,
0:34:46 but I’m 100% the bottleneck in scripting and recording.
0:34:49 And that’s not worth bothering the editor over
0:34:51 for a 10 minute little clip.
0:34:52 And so he was like, okay,
0:34:56 can we streamline this process with a voiceover artist
0:34:58 that never screws up, that never screws up the sentence,
0:35:00 that never has to do a retake,
0:35:03 but I haven’t got any results from that yet.
0:35:05 The couple that I’ve tested previously
0:35:07 didn’t sound quite right
0:35:09 where they would mispronounce words
0:35:13 or they would say things with all weird cadence
0:35:14 or without any cadence.
0:35:15 It sounds like super robotic.
0:35:18 So these samples on 11 Labs are really promising.
0:35:19 So we’ll see what happens there.
0:35:20 – I love it.
0:35:21 I won’t even know if it’s you
0:35:24 or if it’s an actual, yeah, this will be interesting.
0:35:25 – That’s the end goal.
0:35:28 Like to make something that sounds legit,
0:35:30 like that sounds like somebody could have spoken it.
0:35:31 – Yeah, I’m trying to make it passive.
0:35:32 I love it.
0:35:34 – Yeah, how do we, how do we be more passive?
0:35:36 I will say the YouTube style,
0:35:37 I can make like 500 bucks a month,
0:35:39 like from my YouTube channel.
0:35:41 It is like the most favorite income that I get
0:35:44 ’cause it feels like totally free money from the internet.
0:35:46 Sometimes from videos we made years ago
0:35:47 that still rack up views,
0:35:50 it’s still get, you know, planting little money seeds
0:35:52 is kind of how I consider it.
0:35:54 And whether it’s a blog post,
0:35:55 whether it’s a YouTube video,
0:35:58 whether it’s a podcast from six, seven years ago,
0:35:59 it’s like a little digital asset
0:36:01 going out into the world to do your bidding.
0:36:03 And if you’re kind of in this,
0:36:04 well, yeah, sure, I’m living comfortably.
0:36:06 I’m game to chase some of this passive income
0:36:07 that we’ve been talking about.
0:36:09 Go plant some of those money seeds.
0:36:10 Maybe it’s a self-published book.
0:36:13 Maybe it’s a printable file that you’re trying to sell on Etsy.
0:36:15 Maybe it’s a print on demand t-shirt design.
0:36:17 Like there’s lots of different ways
0:36:18 and lots of different platforms
0:36:21 to start to mess around and play with that stuff.
0:36:23 But that’s kind of how I’m looking at YouTube
0:36:26 and trying to build up that presence over there.
0:36:29 But that’s the second part of the triple threat, the tool.
0:36:31 So Mike mentioned Empower.
0:36:35 Monarch is the one-time sponsor of the podcast
0:36:37 that is kind of in a similar space.
0:36:39 So we’ll link that up as well.
0:36:42 And your favorite book from the last 12 months.
0:36:43 – I think I got to go with the book
0:36:47 that really ties into the active versus passive income theme.
0:36:50 And that’s “Buy Back Your Time” by Dan Martell.
0:36:52 I think that’s a really good book
0:36:55 that when vendingpreneurs sign up for our community,
0:36:57 vending’s not passive right out of the gates.
0:37:01 But when you start to actually quantify
0:37:03 high-leveraged tasks in your life
0:37:05 and do self-reflection on,
0:37:07 should I be stocking a vending machine
0:37:09 or should I be going to close the owner
0:37:11 of 20 more properties that really–
0:37:13 – Yeah, to get the next locations lined up, yeah.
0:37:15 – Exactly, those locations
0:37:17 are worth a couple thousand bucks a month.
0:37:20 So those machines, you can hire someone for 20 bucks an hour.
0:37:21 So it just forces you to really go
0:37:23 through a self-evaluation reflection
0:37:27 on getting the time that’s most meaningful for you.
0:37:29 And it’s such an easy read
0:37:30 and it’s definitely a book I recommend.
0:37:33 – Yeah, a couple thousand bucks a month per location
0:37:36 plus the equity, the multiple that that would be worth
0:37:39 to go and sell the route, like hugely more leveraged
0:37:42 than going and piling more Snickers bars
0:37:43 into the back of the machine.
0:37:44 – 100%.
0:37:47 – All right, “Buy Back Your Time” by Dan Martell.
0:37:50 We’ll link that one up, have not read that one myself,
0:37:52 but I’m looking forward to checking it out
0:37:55 and kind of lean into this elimination automation
0:37:56 delegation framework of like,
0:37:58 do I really need to be doing that?
0:38:00 So again, buy back your time.
0:38:05 Mike is Mr. Passive_on_X, you can learn more about him
0:38:09 and the vendingpreneur program at vendingpreneurs.com
0:38:12 where side hustle show listeners graciously get 10% off.
0:38:13 Thank you, Mike, for that.
0:38:15 If you missed our earlier episode
0:38:17 on how to start a vending machine route of your own,
0:38:19 make sure to check that out.
0:38:23 Number 599 of the side hustle show in your podcast app.
0:38:25 Big thanks to Mike for stopping by again,
0:38:28 sharing his insight, big thanks to our sponsors
0:38:30 for helping make this content free for everyone.
0:38:34 You can hit up sidehustlenation.com/deals
0:38:37 for all the latest offers from our sponsors in one place.
0:38:39 Thank you for supporting the advertisers
0:38:40 that support the show.
0:38:41 That is it for me.
0:38:43 Thank you so much for tuning in.
0:38:45 If you find an value in the show,
0:38:47 the greatest compliment is to share it with a friend.
0:38:49 So fire off that text message,
0:38:51 let them know about this conversation.
0:38:53 And until next time, let’s go out there
0:38:54 and make something happen
0:38:56 and I’ll catch you in the next edition
0:38:57 of the side hustle show.
0:38:58 Hustle on.
0:00:05 With our limited time,
0:00:06 what should side hustlers focus on?
0:00:08 What’s up, what’s up, Nick Loper here?
0:00:09 Welcome to The Side Hustler Show
0:00:12 because your nine to five may make you a living,
0:00:14 but your five to nine makes you alive.
0:00:15 And that’s the question on the table.
0:00:17 If you’re already earning active income,
0:00:19 trading time for money at your day job,
0:00:21 doesn’t it make sense to pursue passive income
0:00:23 in your side hustle hours?
0:00:25 Well, maybe, but maybe not.
0:00:26 And what is truly passive?
0:00:28 After all, is there even such a thing?
0:00:30 And what’s the true cost of earning it?
0:00:32 Excited to dive into this topic
0:00:35 and to help me out is Mr. Passive himself.
0:00:36 Mike Hoffman is back on the show.
0:00:37 Mike, welcome back.
0:00:38 – Thanks, Nick.
0:00:39 Fire it up to be here.
0:00:40 – You bet me.
0:00:41 As well, you might remember Mike
0:00:44 from the Vending Machine episode we did earlier this year.
0:00:48 That’s number 599, I wanna say 599 in your archives.
0:00:52 If you missed it, vendingpreneurs.com is his home base.
0:00:54 We’re going three rounds with Mike today.
0:00:57 First up is that active versus passive income debate
0:00:59 to help you decide where it’s really best
0:01:01 to allocate your time, energy, attention.
0:01:04 Next up, we’re doing Donate a Business Idea.
0:01:05 Stick around for that and wrapping it up
0:01:08 with the triple threat, a marketing tactic
0:01:10 that’s working right now for Mike or his students,
0:01:12 a favorite new tool or resource,
0:01:15 and his favorite book for the last 12 months.
0:01:17 So active versus passive income.
0:01:21 Love this topic and I wanna frame it this way.
0:01:24 We know inherently that passive income is important.
0:01:27 I mean, Warren Buffett, the Oracle of Omaha
0:01:28 puts it in no uncertain terms.
0:01:29 He says, look, if you don’t find a way
0:01:31 to make money in your sleep,
0:01:32 you’re gonna work until you die.
0:01:34 And like, well, I don’t necessarily want that.
0:01:36 So let’s go back to the first part.
0:01:38 I gotta figure out a way to make money in my sleep.
0:01:39 So we know it’s important,
0:01:41 but we don’t get a lot of education
0:01:44 on how to actually set this up for ourselves.
0:01:46 And in fact, a lot of our education,
0:01:49 maybe most of our education is geared toward active income.
0:01:50 Go to school, get a good job.
0:01:52 That’s like the end game.
0:01:54 That’s the end goal for a lot of people,
0:01:55 a lot of the educational system.
0:01:57 Get a good job that pays well.
0:02:00 Go find yourself a way to earn active income.
0:02:02 And I think that’s a perfectly normal way to start.
0:02:04 It’s probably where most people start.
0:02:07 And then along the way, invest as much as you can
0:02:10 so that someday, maybe decades later in a lot of cases,
0:02:13 you could begin drawing down those investments,
0:02:14 kind of the traditional path.
0:02:16 But it doesn’t have to be that way.
0:02:17 So Mike, kick us off here.
0:02:19 How do you view this debate
0:02:22 from the perspective of somebody who is working full-time?
0:02:24 They’ve got the goal to make extra money.
0:02:26 That’s why they’re listening to the side hustle show
0:02:27 to start something on the side,
0:02:29 but they’ve got limited hours to work with.
0:02:32 Where does this conversation even start
0:02:33 on active versus passive?
0:02:36 – The first step is, where’s your passion?
0:02:38 And what’s kind of that fire in you?
0:02:40 ‘Cause the reality of the situation
0:02:43 is people’s day job is not their passion.
0:02:46 So whether that’s someone that’s passionate about,
0:02:49 I don’t know, being a mom and like being around their kids
0:02:53 and maybe they find a business idea that excites them
0:02:57 and flares their kind of entrepreneur journey on the side.
0:02:59 And they want to go down a path with that
0:03:00 because they’ve had kids,
0:03:02 but their day job just pays the bills.
0:03:04 So I think for me, it’s just aligning
0:03:05 with where your passions are.
0:03:09 And also understanding that a day job is just that.
0:03:11 It’s the stability you can use
0:03:15 to kind of explore this passion that you have.
0:03:16 – Now I’m going to flip it around.
0:03:18 Like one of your first passive income projects
0:03:19 is a rental property.
0:03:21 Can anybody say, oh, I’m passionate about owning
0:03:24 a rental property or I’m passionate about selling snacks
0:03:25 and drinks in an automated way?
0:03:27 Like I’m passionate about the income that it provides
0:03:28 and the wealth that it could build,
0:03:30 but I don’t know if I’m passionate
0:03:31 about the sausage being made.
0:03:33 – 100% Nick, and I was having this conversation
0:03:35 with one of our vendingpreneurs yesterday
0:03:37 ’cause it’s like, you don’t go to school
0:03:40 to learn about vending or you don’t go to trade school
0:03:43 to learn about the margins of a candy bar
0:03:46 that you resell or anything like that.
0:03:50 But the passion for me is to spend more time with my kids.
0:03:51 Like I was singing about it this morning
0:03:55 where there was a big kind of airlines had a freeze,
0:03:57 IT shut down, what have you.
0:04:00 And think about all these corporate employees
0:04:02 that are on their road for their job
0:04:05 and they’re just scrambling to find a way to get home today
0:04:07 to be with their kids this weekend.
0:04:08 And the reality is a lot of them
0:04:10 aren’t going to be able to get home till tomorrow.
0:04:12 And like, that doesn’t have to be you.
0:04:13 – Okay, that’s fair.
0:04:16 So if you have built up some other means of income
0:04:19 then you don’t have to do the job
0:04:20 that you dislike forever and ever.
0:04:22 – Correct, yeah.
0:04:24 It’s kind of like the Justin Walshmine site where it’s like
0:04:27 you shouldn’t just leave your nine to five
0:04:29 and then all of a sudden your business idea blows up
0:04:31 and in six months you have to go back into it.
0:04:34 You should build this passion and vet it
0:04:36 while you still have that active piece.
0:04:37 – That’s fair.
0:04:41 The challenge is having been a participant
0:04:44 and an observer in the entrepreneurial world
0:04:46 for the past 15, 20 years.
0:04:51 More hours have been spent in vain chasing passive income
0:04:54 than chasing the elusive passive income,
0:04:56 the latest and greatest strategy or tactic
0:04:59 to make money on the internet or whatever it may be,
0:05:01 where it’s like you would have been so much better off
0:05:03 had you just leveled up your skills,
0:05:04 got a better paying job,
0:05:07 or even gone the freelancing or consulting route
0:05:09 and you’ve gotten paid for your time
0:05:12 versus toiling away because sometimes this works out.
0:05:15 And this is like the case of the site isolation blog,
0:05:17 for example, like the first years of the site
0:05:19 like so far below minimum wage,
0:05:21 trying to figure out the internet
0:05:23 and trying to make that into a thing
0:05:25 and will it into existence,
0:05:27 where it’s like in the near term,
0:05:29 would have been so much better off financially,
0:05:31 just going and getting paid by somebody.
0:05:33 Like go solve a problem, go get paid for it.
0:05:34 – Absolutely, you’re spot on.
0:05:36 And that’s like that valley of death.
0:05:38 You talk about it when people are trying
0:05:42 to like build a business or do work with the government.
0:05:44 It takes eight years of red tape to find,
0:05:46 like you look at Palantir right now.
0:05:49 Palantir is like booming from a business,
0:05:50 but they went through this valley of death
0:05:52 just to break into the government.
0:05:53 Same thing with businesses.
0:05:58 Like our vending route right now is flourishing,
0:05:59 but those first five years,
0:06:03 it was like chop wood, carry water, chop wood, carry water.
0:06:07 It was boring and it was scary all at the same time.
0:06:10 – Yeah, the way that I kind of like to frame it
0:06:13 is thinking of your income as a pie chart, right?
0:06:15 And for most people, especially straight out of school,
0:06:18 like I’m trading time for money,
0:06:20 it’s 100% active income.
0:06:22 And then to get to that Warren Buffett finish line
0:06:24 of not working until you die,
0:06:27 eventually it’s going to have to be fully time leveraged
0:06:28 or fully passive income.
0:06:30 And maybe you still want to do some consulting projects
0:06:32 or maybe you want to work part-time or something.
0:06:34 But like trying to build,
0:06:35 first starting with a little sliver,
0:06:38 but then building that passive income piece of the pie
0:06:41 such that you don’t need the active part anymore
0:06:42 or it becomes optional.
0:06:45 – Yeah, I love that pie chart, that’s a great analogy
0:06:48 and you’re just trying to move those percentages
0:06:50 as far over as possible.
0:06:52 – All right, so you like real estate, you like vending,
0:06:55 what other passive or time leveraged models
0:06:58 might be beginner friendly or would be on your radar?
0:07:00 – I think even just taking a step
0:07:03 and really kind of understanding the percentages
0:07:05 of your income and not getting into like,
0:07:08 do you make enough to be able to invest in a rental
0:07:11 or invest in a vending machine or route or whatever?
0:07:14 It’s more like understanding, okay,
0:07:17 how much of your take home pay is spent on rent?
0:07:21 How much of it is going into a index fund
0:07:24 or something that is just at the simplest level?
0:07:27 You talked about earlier when you’re in your 20s,
0:07:31 you can get so far ahead if you just are disciplined enough
0:07:35 to take a percentage of your income no matter what that is
0:07:38 and start building that compounding effect
0:07:42 in whatever asset class you want to start in.
0:07:43 – You have a rule of thumb of like,
0:07:46 well, I’m going to put 10% into
0:07:49 some speculative passive projects
0:07:52 or like I never really thought about it that way.
0:07:56 – For my wife and I, we’ll do 10 to 15%
0:07:58 into more of our conservative,
0:08:01 like out of sight, out of mind index funds every month.
0:08:04 And then yeah, we have another probably 10%
0:08:06 that’s high risk.
0:08:10 Our financial advisor might not think it’s the safest play,
0:08:12 but it’s something I’m bullish about.
0:08:14 I mean, even in the vending space right now,
0:08:17 there’s so many smart machines at now
0:08:19 are adding like digital ad screens to them.
0:08:22 And there’s like these speculative opportunities
0:08:26 for revenue that have never existed in this niche before.
0:08:29 So that’s kind of where I’m going right now.
0:08:31 And then all these like unattended,
0:08:34 the Amazon just walk out technology and stuff
0:08:38 just really trying to kind of think of five years ahead.
0:08:40 And who knows, it might fall on this face.
0:08:41 – Okay, so I’m thinking of first,
0:08:45 so it starts off from a place of financial stability.
0:08:46 Like that’s got to be step one.
0:08:48 Like I got to have enough income to cover my expenses
0:08:51 and then having an understanding of where
0:08:53 that income is allocated.
0:08:55 How are my dollars going to work for me?
0:08:58 And then taking a percentage of that, of the surplus,
0:09:00 hopefully, and saying, okay, in your case,
0:09:02 I’m investing that back into the business
0:09:04 and more speculative projects and saying,
0:09:06 okay, this is like the play money.
0:09:08 Like everything else is,
0:09:09 maybe it’s not super, super comfortable,
0:09:11 but it’s like, I’m not going backwards.
0:09:14 And having a little bit of financial breathing room
0:09:16 as a baseline.
0:09:18 And so maybe this whole passive income discussion
0:09:20 is one of privilege to be even able to tackle that.
0:09:22 Like, no, I’m just trying to make ends meet.
0:09:23 I’m trying to put food on the table.
0:09:25 Like I got to go earn some money today
0:09:28 versus seeing if I can make some investment
0:09:30 or start some project that may pay back
0:09:31 in six to 12 months.
0:09:33 There’s something powerful in what you just said.
0:09:35 And I think it comes back to like your habits, right?
0:09:39 Like if you think of a book, I might recommend later,
0:09:41 but I’m going to spoil it by talking about it now.
0:09:46 Profit first, the whole concept is you pay your profits
0:09:48 before you pay off your expenses.
0:09:51 So right away, when you get income coming in,
0:09:53 it goes into your profit bucket.
0:09:54 Well, guess what’s going to happen?
0:09:57 Naturally, you’re going to really watch
0:09:59 what your expenses are because now
0:10:01 that profit first is paid out
0:10:03 and you’re only left with so much.
0:10:06 So the same concept when it comes to our personal finances
0:10:08 and investing in things like passive income,
0:10:12 when you’re a young kid, I will teach you to be rich.
0:10:13 Another book always talks about
0:10:16 immediately the day you get paid,
0:10:20 you need to direct deposit into your stock portfolio,
0:10:22 that money, so then your plate money
0:10:25 and your actual bank account is a lot less
0:10:27 than you spend too much.
0:10:30 And it’s like, “Oh crap, I forgot to invest this month.”
0:10:33 So that whole kind of, just even habits of,
0:10:34 at the end of the day, it all starts
0:10:36 with live below your means, right?
0:10:39 If you’re 20% taken out
0:10:41 before it even hits your bank account,
0:10:44 that’s the beauty of like Ross and these 401ks,
0:10:46 is you’re already pulling that out
0:10:49 before it hits what you think you can spend with.
0:10:51 – Yeah, this is super simple,
0:10:53 but like you never really heard it phrased,
0:10:53 actually before Brin’s mom,
0:10:55 before my mother-in-law kind of explained
0:10:59 that’s how she as a single mom was able to save and invest.
0:11:02 She’s like, “I would get the direct deposit paycheck
0:11:05 for pretty much exactly what I knew my expenses
0:11:05 were gonna be that month.”
0:11:08 And everything else was out of sight, out of mind,
0:11:09 in savings and investments.
0:11:11 It’s like, I just never really, whatever,
0:11:15 the automated 401k deposit out of the paycheck,
0:11:16 that was fine, but then everything else
0:11:17 was just hit the checking account.
0:11:19 I was like, “All right, this is play money.”
0:11:22 It’s still kind of inherently new to live below by means,
0:11:25 but nothing was set up and systemized and automated
0:11:29 the way that it could have been to maybe accelerate that
0:11:31 or just make it more of a habit or make it more automatic.
0:11:33 – Yeah, yeah.
0:11:35 And then it forces you to think about
0:11:37 where your big rocks are.
0:11:39 You got people these days on social media
0:11:41 that are like, “Oh, I’m gonna start doing this or that
0:11:43 or I’m gonna work on my offer
0:11:45 and I need to get my SEO
0:11:48 and all of these other ancillary things figured out.”
0:11:51 And it’s like, let’s just start posting content once a day.
0:11:54 – Yeah, I know Kagan calls it the rule of 100,
0:11:56 like post a hundred pieces of content
0:11:58 or come up with a hundred ideas
0:11:59 and then come back and talk to me
0:12:01 or Jimmy, MrBeast has the same thing.
0:12:03 Like, why don’t you post a hundred videos
0:12:03 and then come talk?
0:12:06 Either you burn out and don’t do the hundred
0:12:08 and I don’t have to talk to you
0:12:10 or you do the hundred and you figured it out along the way
0:12:11 and I still don’t have to talk to you.
0:12:14 So I was like, this is great little bit of advice from him.
0:12:16 The counterpoint that I maybe want to make,
0:12:20 especially on the passive versus active side
0:12:22 is we’ve seen some examples
0:12:24 of where near term cash flow,
0:12:26 obviously chasing active income,
0:12:29 service businesses, consulting, freelancing,
0:12:32 you’re gonna ring the cash register right away.
0:12:33 And we’ve seen some examples
0:12:36 of where that can actually transition
0:12:39 into something more passive or more time leveraged.
0:12:41 A couple of examples, we have Wes Schaefer
0:12:44 who was the sales whisperer, I think was his brand
0:12:46 on the show years ago.
0:12:49 And he was doing these kind of like sales funnel
0:12:51 automation build outs and consults.
0:12:53 Like, hey, we’ll analyze your business.
0:12:56 And along the way, so he’s getting paid to do that upfront,
0:12:59 but along the way becomes a certified reseller
0:13:02 for HubSpot for infusionsoft, now keep.
0:13:06 And oh, by the way, they pay recurring commissions to hit.
0:13:07 It’s like, hey, based on your business,
0:13:10 we found that HubSpot was the best fit for you.
0:13:12 We’ll sign you up, we’ll get it all set up for you.
0:13:16 He was able to turn that one time active income project
0:13:19 into recurring level of passive income for years.
0:13:21 One of my other favorite examples is Matt Boknock.
0:13:23 He was like the motorcycle repair guy.
0:13:25 Hey, don’t take your bike to the dealership.
0:13:26 Don’t pay dealership rates.
0:13:27 Come, you’ll bring it to me.
0:13:29 I know what I’m doing, I’ll fix it in my garage.
0:13:32 Hours for dollars side hustle after sending the kids to bed.
0:13:34 But Matt set up the camera in the court of the garage,
0:13:36 films himself doing the repairs.
0:13:39 Last we spoke, he had 100,000 YouTube subscribers.
0:13:42 He was selling these engine rebuild videos
0:13:43 as a digital products.
0:13:46 And it didn’t take long, I’m sure it felt long,
0:13:48 but it didn’t take long from the outside looking in
0:13:50 where the quote unquote passive side of the business
0:13:53 far outpaced the turning wrenches side of the business.
0:13:56 And it’s interesting that some of these like little,
0:13:59 maybe it’s selling your sawdust type of products,
0:14:01 but when you start by doing the work
0:14:04 and building skills and relationships,
0:14:06 sometimes those passive doors start to open
0:14:09 or those more time leveraged doors start to open.
0:14:11 – Yeah, I was reading an article about this last night
0:14:13 where there’s something to say
0:14:15 about the middle man and everything.
0:14:17 Like if you look at Uber and Airbnb,
0:14:21 what they have in common is they don’t have any cars
0:14:23 and they don’t have any homes.
0:14:26 They’re just the middle man of connecting someone
0:14:30 that’s looking for a home in Washington on their vacation
0:14:31 and someone that has a home.
0:14:33 Just like Uber, you look at,
0:14:34 and like the sales whisper thing,
0:14:39 he’s just that dot that’s connecting this potential person
0:14:43 that needs a CRM to hub spot or to whatever that vehicle is.
0:14:45 And the same thing I keep coming back to
0:14:46 with our vendingpreneurs,
0:14:50 ’cause you’re spot on, like you gotta reduce friction.
0:14:53 For me, like I’m trying to make it as easy as possible
0:14:55 for people to get product.
0:14:56 Like they shouldn’t have to go to Costco
0:14:58 and spend four hours.
0:15:01 If we can just get it delivered to their door once a week
0:15:05 at a bulk price that’s just on autopilot
0:15:07 based on the sales of whatever that,
0:15:09 there’s just so many levers is like just that,
0:15:11 I mean, Amazon, it’s just a middle man.
0:15:15 Anything in life, you’re just trying to be that connector.
0:15:17 And last time I had that aha moment where it’s like,
0:15:20 Uber has no cars and Airbnb has no homes, like what?
0:15:23 – Right, Facebook doesn’t create any of their own content.
0:15:26 Safe thing with TikTok, they’re just content platforms.
0:15:27 There’s something to that.
0:15:30 And this is a common path for side hustlers
0:15:31 to start freelancing on the side.
0:15:33 Yes, it’s still active income.
0:15:35 Maybe they take that full time.
0:15:37 Maybe they start to hire subcontractors
0:15:39 where it’s like, okay, now it’s a little bit more
0:15:41 time leverage is not me laying the bricks
0:15:43 or doing the day-to-day labor anymore,
0:15:46 but I put myself in a management layer.
0:15:48 So different ways to transition from active income
0:15:52 to passive income in the middle man method is similar.
0:15:55 It could be, oh, I started a house cleaning business,
0:15:56 but I didn’t want to do the cleaning.
0:15:58 So I went out and hired people who already knew
0:16:00 how to do the cleaning.
0:16:02 We’ve seen examples of that on the show
0:16:06 from window washing to graphic design and video editing.
0:16:08 You can do it offline, you can do it online,
0:16:11 but the middle man game absolutely is a viable path.
0:16:13 – Yeah, and then even you talk about that home cleaning,
0:16:17 like those product companies will fight for you
0:16:19 to buy their product to use for the cleaning.
0:16:23 You think of like Airbnb’s and all of the restaurants
0:16:26 near you, they want your business and they will pay you
0:16:29 if you promote their restaurants and your check-in folder
0:16:31 when guests come to your Airbnb.
0:16:35 – Okay, okay, interesting.
0:16:35 I never thought about that.
0:16:38 And now I will definitely pay more attention
0:16:39 to those little like welcome binders.
0:16:40 – Yeah!
0:16:43 I love those houses, like was that a paid placement?
0:16:45 Yeah, mention our offer code for 10% off your check.
0:16:47 – Side hustle nation, you get 10% off.
0:16:48 – Yeah, there you go.
0:16:49 – That’s a lot of wings.
0:16:52 – One other consideration here on this active
0:16:57 versus passive debate is related to your home life situation.
0:17:03 So for me, it was grateful to be living below my means
0:17:06 and had my wife who had this steady job.
0:17:08 And so when there were down years in the business,
0:17:11 it was okay, we could still live comfortably on one income.
0:17:15 And that freed up the time and the mental energy
0:17:19 to focus on these more time leveraged business models
0:17:20 where even in the near term,
0:17:23 it wasn’t going to have this great ROI
0:17:26 or it seemed was chasing this passive income.
0:17:30 And sometimes it took months or years to materialize,
0:17:32 but because we’re playing it as a team sport,
0:17:34 it still worked out.
0:17:35 And so maybe that’s a conversation to have
0:17:37 with your spouse or partner to figure out,
0:17:39 well, what role is everybody going to play here?
0:17:41 But that was something that worked out
0:17:42 in our favor in our house.
0:17:43 – Yeah, no, that’s great.
0:17:46 And we had the same similar situation last year.
0:17:49 My wife actually lost her job
0:17:51 and she was five months pregnant.
0:17:54 And also our healthcare was with her job
0:17:56 because I was just an entrepreneur.
0:17:58 So we took care of your healthcare.
0:18:00 And so it was like a scramble moment.
0:18:02 But as long as you’re living below your means
0:18:04 and you have those different income streams
0:18:05 for the rainy days,
0:18:08 like you said, the mind share,
0:18:10 it was just a simple
0:18:12 and could have been a very emotional roller coaster,
0:18:15 but it allowed us to stay neutral in the moment.
0:18:16 – You ever get to the point of like,
0:18:18 this passive income stuff sucks.
0:18:19 It doesn’t work.
0:18:22 How to go figure out how to make extra money,
0:18:23 just selling my skills.
0:18:25 Do you ever have that conversation
0:18:26 or does there come a point
0:18:29 where you have people trying to build websites
0:18:32 or do merch by Amazon or do dropshipping
0:18:35 or whatever the latest thing is,
0:18:37 you never quite hit it right.
0:18:40 And I feel for those people
0:18:43 ’cause all of these models can work and do work,
0:18:46 but sometimes there’s a factor of luck involved.
0:18:48 It sometimes is a factor of timing.
0:18:49 And other times it’s like, I don’t know,
0:18:51 this just isn’t the model for you.
0:18:52 That’s where I struggle with.
0:18:54 I’m in the passive income camp too,
0:18:56 but I definitely see the benefits of just like,
0:18:58 like if you’re trying to make extra money, go make it.
0:18:58 Go get it done.
0:19:00 – Yeah, I see both sides for sure.
0:19:02 I mean, I do do a little bit of consulting
0:19:04 for our special operations community
0:19:06 with human performance.
0:19:07 That’s a lot more active,
0:19:10 but I think the downside with like consulting
0:19:13 or time for money is like with consulting,
0:19:16 what you did for them yesterday doesn’t matter.
0:19:18 It’s what are you gonna do for me today?
0:19:19 – Yeah.
0:19:20 – Like that whole rat race is just,
0:19:22 to me it’s not sustainable.
0:19:23 You’re gonna get burnout,
0:19:27 you’re gonna just play that substitution of time for money.
0:19:30 And it’s just, you might do it ’cause it’s your passion
0:19:33 and you believe in the mission of whatever you’re
0:19:36 an expert in, but it’s a tough business model.
0:19:37 – Well, if the hourly rate is strong enough,
0:19:40 it might be compelled to keep going.
0:19:43 We had a guy who was doing like college admissions essay
0:19:45 consulting like a super, super niche business.
0:19:48 It was like 220 something bucks an hour.
0:19:51 Like, I’m okay with this at a certain price.
0:19:53 You can kind of just play the traditional route of like,
0:19:55 yeah, I’m gonna live below my means
0:19:57 and invest the difference versus like,
0:19:59 okay, if I’m just kind of squeaking by
0:20:03 or my current skill set wouldn’t afford a $200 hourly rate,
0:20:06 okay, now I’ve gotta figure out how to build an income stream
0:20:08 that maybe is unrelated to that or has some more leverage.
0:20:09 – Yeah, exactly.
0:20:11 I could see that side for sure.
0:20:12 – All right.
0:20:13 So is there a sweet spot?
0:20:16 So let’s say I’m eight hours a day is at my day job,
0:20:18 eight hours a day, hopefully sleeping.
0:20:19 And I’ve got eight hours left.
0:20:22 Like, is there a sweet spot of like rule of thumb?
0:20:26 What time should people allocate to a passive income pursuits?
0:20:27 – As far as like buckets,
0:20:28 I mean, I think it’s like anything.
0:20:31 You just, you gotta be balanced
0:20:33 or there is gonna lead to some burnout.
0:20:35 You gotta be balanced on all the things
0:20:39 if you’re not doing much and you’re sleeping too much
0:20:42 and you’re just on social media every night.
0:20:44 Like you’re just gonna get in a rut and feel stuck
0:20:47 and spiral and watch news all day.
0:20:50 And then the other side of it is if you’re constantly working
0:20:52 and you’re just gonna feel like
0:20:54 you’re never gonna get ahead.
0:20:56 So I think there’s always gonna be that balance.
0:20:59 And I also think for me, just like with training,
0:21:01 it’s periodization.
0:21:03 And I’m a huge believer in micro dosing
0:21:06 and doing a little bit every single day
0:21:07 versus like, oh, we’re gonna work five days
0:21:09 and have two days off, but Sunday,
0:21:11 you’re stressed out thinking, you know,
0:21:12 the Sunday is scary as you’re thinking
0:21:13 about the week ahead.
0:21:17 So like, why not spend an hour on Saturday and Sunday?
0:21:19 If you can, before your kids wake up,
0:21:22 just do a little bit every day.
0:21:23 And same thing with Friday.
0:21:25 Like you shouldn’t have to work past noon
0:21:27 if just because it’s Friday
0:21:30 and you’re supposed to work till five is ass backwards.
0:21:32 – Yeah, this is maybe the key to it.
0:21:34 Being proactive about it,
0:21:37 no matter what your starting position is
0:21:38 and being consistent with it.
0:21:40 There’s nobody else is gonna do it for you.
0:21:42 And if you don’t put in the effort consistently
0:21:46 like that passive income is never gonna come down the road.
0:21:49 So even if it’s just a half an hour a day, an hour a day,
0:21:52 like if you can carve out a little bit of time
0:21:53 for these pursuits,
0:21:56 your effort starts to compound and accelerate
0:21:58 and you start to learn more and build your skills.
0:22:00 But then you start hopefully with that little sliver
0:22:01 on the pie chart.
0:22:04 And hopefully it starts to expand and expand
0:22:06 as you move forward with it.
0:22:09 And that’s kind of how I thought about
0:22:10 even when I was working full time.
0:22:13 Like, okay, so I’m gonna spend my evening and weekends
0:22:15 like trying to build up the passive income
0:22:17 so I could scale back the active income.
0:22:19 We’ve heard from other podcast guests too
0:22:21 where they, I went from working five days a week
0:22:23 to four days a week to three days a week.
0:22:26 Like as it started to grow and grow,
0:22:27 that was a byproduct of that,
0:22:30 being proactive about it and being consistent with it.
0:22:33 So that’s our active versus passive income debate.
0:22:35 I love this topic.
0:22:36 We’ll geek out about it all day with anybody.
0:22:38 So that’s round one.
0:22:41 Round two is donate a business idea.
0:22:44 We’ll be right back with that after a word from our sponsors.
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0:23:54 All right, we’re back with Mike, Mr. Passive,
0:23:58 and we’ve got Donate a Business Idea for Round Two.
0:24:00 This is something that you’d start
0:24:01 if you just had more bandwidth.
0:24:04 This is something that you think listeners could run with.
0:24:06 This is something that auto-exists in the world.
0:24:07 It’s pretty open-ended,
0:24:09 but I’ll tee it up for you with that.
0:24:12 – What’s where everything’s going with AI?
0:24:13 I think there’s something there
0:24:16 with almost like an AI assistant
0:24:21 that organizes things for you in a more tailored way.
0:24:25 And what I mean by that is you think of the AI for Siri,
0:24:30 where it’s like, okay, a vendingpreneur yesterday asked me,
0:24:33 hey, do you have an example statement of work
0:24:36 for a property contract?
0:24:37 On your phone, you could just be like,
0:24:40 hey, chat GPT, create a statement of work.
0:24:43 I’m a vending provider, send to Thomas,
0:24:45 and off it, and it’s out.
0:24:50 Or the whole idea of a grocery’s folder,
0:24:52 and you think of something you need to get
0:24:55 on your grocery run that’s three days away,
0:24:57 and you just want to add it to the list.
0:25:00 Or AI assistant, find the cheapest flights
0:25:04 for this upcoming trip, or what have you.
0:25:06 I just think there’s something there
0:25:09 between the intent of Siri combined
0:25:11 with a chat GPT or a Gemini
0:25:16 that will really streamline efficiency into buckets
0:25:18 that will help you get things done
0:25:20 the way that you could get them done.
0:25:25 – Okay, so thinking of an assistant chatbot type of product,
0:25:27 maybe niched down in the travel niche,
0:25:29 or the meal planning niche.
0:25:31 Like we add this to the grocery list,
0:25:33 or even better, add it to the grocery list
0:25:37 that on Saturday is going to trigger the Instacart order,
0:25:40 or something where it’s like, becomes more automated.
0:25:41 Am I hearing that right?
0:25:46 – Yeah, and also just kind of taking the Siri concept
0:25:47 to the next level.
0:25:49 Like, hey, reach out to Nick
0:25:52 and schedule this podcast episode on Friday
0:25:55 with what works with my Google calendar.
0:25:58 – Okay, there’s gotta be a way,
0:26:00 and probably there’s some like no code entrepreneurs
0:26:02 or even smarter people who will be like,
0:26:03 you do that already exists,
0:26:05 or I could build that in half a day.
0:26:06 And so maybe–
0:26:07 – 100%.
0:26:08 – Yeah, maybe there’s something to that.
0:26:11 One that always has been challenging for us
0:26:12 is the travel side.
0:26:14 And it’s like, I mean, you gotta churn through
0:26:17 a lot of different data on flights and times
0:26:19 and rates and routes to do that.
0:26:21 But one of the challenges for us,
0:26:23 like trying to plan annual friends giving is like,
0:26:25 well, do we go there?
0:26:26 Did they come here?
0:26:27 Do we meet somewhere in the middle?
0:26:28 What’s the best option?
0:26:29 Well, do they fly out of Detroit?
0:26:30 Do they fly out of Toronto?
0:26:32 Like, do we fly out of Vancouver?
0:26:33 Like, it’s not a Canadian holiday.
0:26:36 It’s like half off if you just drive for a couple of hours.
0:26:39 So it’s these weird, different variations
0:26:41 that are really tedious.
0:26:43 But it’s like, oh, I mean, maybe there’s a computer element
0:26:46 that can take some of that time-searching burden
0:26:46 off our plates.
0:26:49 – Oh, and take that a step further with like kids.
0:26:52 Like think about going into summer camps
0:26:54 and how you always wanna book a summer camp,
0:26:56 but you’re always too late and it’s already filled up.
0:26:59 And it’s like, now we’re already mapping out
0:27:03 camps for the fall or fishing whatever
0:27:05 on Saturday mornings or soccer on Sunday.
0:27:10 Like that whole layer of I live in Portland, Oregon,
0:27:14 find me all kids’ camps this fall
0:27:16 that are on Saturday mornings
0:27:19 that are still open for registration.
0:27:20 – Right, that are still open.
0:27:21 That’s the key.
0:27:22 – Yeah.
0:27:23 – That was literally a business.
0:27:25 We did like a business idea giveaway show
0:27:26 probably a year ago.
0:27:28 And that was literally one that came up.
0:27:31 It’s like the kid camp summer database.
0:27:32 Maybe they have affiliate programs.
0:27:33 Maybe they don’t.
0:27:35 But like either way, it would be super valuable
0:27:36 for parents to be like,
0:27:38 well, when does registration open for this?
0:27:39 How much does it cost?
0:27:40 Like what are the times?
0:27:43 So many of them are like nine to 1230 or something.
0:27:46 Well, I was really hoping for a little bit more coverage
0:27:47 than that, but maybe you could filter by that.
0:27:49 Like, yeah, there’s definitely something
0:27:52 if you were a data scraper or data aggregator type of person.
0:27:54 – Well, and then take a step further,
0:27:55 you look at the events on Google.
0:27:59 So you can go to what are the fourth to July events
0:28:00 in Seattle?
0:28:02 Well, then you tie that in with Gemini,
0:28:04 their AI kind of bot.
0:28:08 And it’s like, okay, what are their camps in Seattle
0:28:13 for kids under four that are open for the fall?
0:28:16 And then if the camp’s 50 bucks,
0:28:18 I would gladly pay an extra 10 bucks
0:28:21 just because I didn’t have to spend an hour on Google
0:28:25 seeing all these camp timelines are already full.
0:28:26 – Yeah, yeah, just book it for me.
0:28:29 That’s like the next stage of what do they call
0:28:31 a generative AI or something.
0:28:33 Like not just giving you answers,
0:28:35 but actually doing the thing, doing the task.
0:28:39 So it’s a brave new world out there.
0:28:41 I’m playing around with some more AI stuff every week.
0:28:45 It’s fascinating what it can do.
0:28:45 Well, very good.
0:28:48 We’ll put that down as the donate a business idea,
0:28:51 some sort of niche AI assistant,
0:28:53 maybe built with some no-code tools.
0:28:54 Bubble is a great one.
0:28:56 People are building their own GPTs.
0:28:59 One thing that has kind of been on the wish list
0:29:00 or to-do list.
0:29:04 You could feed in a decade plus of podcast transcripts
0:29:08 of blog content and create the side isolation GPT
0:29:10 just for Q and A or customer support.
0:29:11 Like how would you answer this question?
0:29:12 Like, well, it’s probably been answered
0:29:14 at some point in the archives.
0:29:17 And so there may be maybe that coming down the future.
0:29:20 It’s not at the top of the to-do list, but it’s on there.
0:29:22 – Yeah, I mean, think about how many people you’ve interviewed
0:29:24 and you’ve basically been asking questions
0:29:27 to figure out the ideal customer profile.
0:29:30 Like the questions you asked about,
0:29:32 “Okay, you want to start with vending
0:29:34 “and how much capital do you need?”
0:29:37 Like if I went into your website and I was like,
0:29:39 “Okay, I’m a 22 year old.
0:29:41 “I don’t have much capital
0:29:43 “or I want something that’s tax depreciable
0:29:45 “because my W2 is too high.”
0:29:48 And it’ll be like, “Okay, scooter rentals,
0:29:50 “vending machines and car washes
0:29:53 “are the top three that fit your persona.”
0:29:55 And then go reach out to these people.
0:29:58 Like there’s so much leverage in that content.
0:30:01 I mean, however many episodes you’ve had.
0:30:01 – Yeah.
0:30:04 – You’re basically a passive income.
0:30:05 I don’t want to say middleman, but record.
0:30:06 – Library, yeah.
0:30:07 – Yeah.
0:30:09 – Dude, that’s really cool.
0:30:10 Like some sort of personalized.
0:30:12 We attempt to do this a little bit
0:30:13 with like the quiz that’s on the homepage.
0:30:15 Like, “Hey, answer a few questions.”
0:30:17 And we’ll try and point you in the right direction.
0:30:20 But if it had a little more context,
0:30:22 yeah, maybe there’s something like that
0:30:24 that would be interesting, a little more conversational.
0:30:25 Like here are some business models
0:30:27 that ought to be worth a look here.
0:30:28 So very cool.
0:30:29 That is round two.
0:30:31 Round three is the triple threat.
0:30:33 We’re going to start off with number one here,
0:30:36 a marketing tactic that is working right now
0:30:38 for you or your students.
0:30:40 – A marketing tactic that always works
0:30:42 is anything that’s going to create urgency.
0:30:46 So we’re working on a big lead for a REIT
0:30:48 for our vendingpreneurs.
0:30:49 And I just throughout this,
0:30:52 hey, I’m going to be out in your neck of the woods
0:30:56 on this date and the executive assistant for the CEO.
0:30:59 I was like, hey, yeah, he’s got 20 minutes at this time.
0:31:00 And I just literally said,
0:31:01 I’m going to be out in your neck of the woods
0:31:04 and I don’t make it out your way very often.
0:31:06 And so it just created this urgency
0:31:07 for them to take a meeting.
0:31:10 So I think anything marketing-wise,
0:31:11 that’s going to create urgency.
0:31:13 Like Nick, I know you do a great job
0:31:16 with the whole kind of urgency of listening to your podcast
0:31:18 and just that whole side of it.
0:31:20 So for me, it’s always trying
0:31:22 to create people to take action.
0:31:23 – And then you go book that flight
0:31:25 or were you really going to be out there?
0:31:26 – No, that’s exactly what I did.
0:31:27 Then I went and booked that flight.
0:31:29 I mean, that’s how we broke into the government
0:31:31 was we would reach out to these general officers
0:31:32 at the Pentagon and say like,
0:31:35 hey, I’m going to be out in your neck of the woods
0:31:37 this week or this week.
0:31:38 When can you take a meeting,
0:31:40 send it to a four-star general,
0:31:43 he’d respond and be like Wednesday the 25th at five.
0:31:44 And it’s like, okay,
0:31:46 we better book a flight for that week
0:31:47 ’cause we just locked in a meeting.
0:31:49 And now we have that anchor meeting.
0:31:50 That’s really interesting.
0:31:53 We’ve kind of seen the same thing like in years ago,
0:31:56 hosting side hustle nation meetups.
0:31:59 If there’s no outside force, we could do it anytime, right?
0:32:00 There’s no urgency.
0:32:01 Another friend is coming into town.
0:32:02 Oh, perfect.
0:32:03 Let’s hold the beat up while you’re here.
0:32:04 We’ll hang out.
0:32:05 We’ll invite the other members of the community.
0:32:07 And so there’s something to that.
0:32:09 And then to reverse that and say,
0:32:11 I’m going to be, I’m going to be at town.
0:32:13 I guess only works if you’re willing to jump on that plane
0:32:14 and make it happen.
0:32:16 – Yeah, just the whole whatever that,
0:32:17 it doesn’t even have to be a travel thing.
0:32:19 It could be like a, you know, a vending lead.
0:32:20 I’m trying to close over here.
0:32:22 And it’s just like, hey,
0:32:25 I’m coming to meet with someone next to you
0:32:27 or you around before my meeting.
0:32:29 Whatever that urgency is.
0:32:31 – Yeah, I’m using this with online course sales,
0:32:33 like some sort of bonus that goes away,
0:32:35 some sort of limited time discount.
0:32:37 Used to do it in house painting.
0:32:39 Like, hey, I’ve got an opening in the schedule in two weeks.
0:32:41 I’d love for that spot to be yours.
0:32:43 10% off if you sign on the dotted line.
0:32:46 Some reason for people to take action
0:32:47 where they otherwise wouldn’t.
0:32:49 You’re like, well, nothing bad is going to happen
0:32:51 if I punt this off another week or another two weeks.
0:32:52 So some sort of urgency.
0:32:53 I like that one.
0:32:56 That is the marketing tactic that’s working right now,
0:32:59 creating some sort of urgency for whatever thing it is
0:33:00 that you’re selling.
0:33:05 Number two here is to recommend a new or new to you tool
0:33:06 that you’re living right now.
0:33:11 – What I’ve been using probably recently is more just kind of,
0:33:12 there’s multiple tools out there,
0:33:15 but just like tracking your financial worth,
0:33:17 whether that’s like, I think in power,
0:33:18 there’s a couple of tools out there,
0:33:22 but nowadays just being able to track your net worth
0:33:24 that aligns with your bank accounts for spending,
0:33:28 it aligns with you and your worth of paying down your mortgage,
0:33:30 like all those kinds of things that when we talk about
0:33:32 earlier, living below your means,
0:33:35 you actually can see why with something showing you
0:33:36 a light at the end of the tunnel.
0:33:37 – Yeah, very good.
0:33:40 It’s really similar to somebody else mentioned Monarch,
0:33:41 couple months on the show,
0:33:42 like really similar tool,
0:33:45 like kind of a personal finance dashboard.
0:33:47 You can bring in all your income,
0:33:48 all your expenses, all your assets,
0:33:49 all your different accounts,
0:33:52 like all kind of in this one customizable dashboard.
0:33:55 They were actually a sponsor on the show earlier this year.
0:33:56 And this is really cool.
0:33:59 Like I can log in, see the stuff that’s important to me
0:34:02 and been the beneficiary of the last nine,
0:34:04 12 months of like pretty serious bull market.
0:34:07 So like every time you log in, the number seems to go up.
0:34:08 You’re like, well, that’s, that’s rewarding.
0:34:11 I probably can’t get used to that going on in perpetuity,
0:34:12 but it is a cool tool.
0:34:15 And just to kind of get that snapshot view
0:34:18 of inflows, outflows,
0:34:20 and then the net worth picture is what I’m hearing.
0:34:21 – Absolutely, yeah, that’s been cool.
0:34:22 How about you?
0:34:23 – I knew to me too.
0:34:24 The one I’m playing around with right now
0:34:26 is 11 Labs for voiceover
0:34:31 and trying to create a clone of my own voice
0:34:33 to produce more YouTube videos,
0:34:37 to ultimately compliment the huge archive
0:34:39 of written content on the site,
0:34:40 where it’s like, oh, I would love to have a video
0:34:41 to compliment this,
0:34:46 but I’m 100% the bottleneck in scripting and recording.
0:34:49 And that’s not worth bothering the editor over
0:34:51 for a 10 minute little clip.
0:34:52 And so he was like, okay,
0:34:56 can we streamline this process with a voiceover artist
0:34:58 that never screws up, that never screws up the sentence,
0:35:00 that never has to do a retake,
0:35:03 but I haven’t got any results from that yet.
0:35:05 The couple that I’ve tested previously
0:35:07 didn’t sound quite right
0:35:09 where they would mispronounce words
0:35:13 or they would say things with all weird cadence
0:35:14 or without any cadence.
0:35:15 It sounds like super robotic.
0:35:18 So these samples on 11 Labs are really promising.
0:35:19 So we’ll see what happens there.
0:35:20 – I love it.
0:35:21 I won’t even know if it’s you
0:35:24 or if it’s an actual, yeah, this will be interesting.
0:35:25 – That’s the end goal.
0:35:28 Like to make something that sounds legit,
0:35:30 like that sounds like somebody could have spoken it.
0:35:31 – Yeah, I’m trying to make it passive.
0:35:32 I love it.
0:35:34 – Yeah, how do we, how do we be more passive?
0:35:36 I will say the YouTube style,
0:35:37 I can make like 500 bucks a month,
0:35:39 like from my YouTube channel.
0:35:41 It is like the most favorite income that I get
0:35:44 ’cause it feels like totally free money from the internet.
0:35:46 Sometimes from videos we made years ago
0:35:47 that still rack up views,
0:35:50 it’s still get, you know, planting little money seeds
0:35:52 is kind of how I consider it.
0:35:54 And whether it’s a blog post,
0:35:55 whether it’s a YouTube video,
0:35:58 whether it’s a podcast from six, seven years ago,
0:35:59 it’s like a little digital asset
0:36:01 going out into the world to do your bidding.
0:36:03 And if you’re kind of in this,
0:36:04 well, yeah, sure, I’m living comfortably.
0:36:06 I’m game to chase some of this passive income
0:36:07 that we’ve been talking about.
0:36:09 Go plant some of those money seeds.
0:36:10 Maybe it’s a self-published book.
0:36:13 Maybe it’s a printable file that you’re trying to sell on Etsy.
0:36:15 Maybe it’s a print on demand t-shirt design.
0:36:17 Like there’s lots of different ways
0:36:18 and lots of different platforms
0:36:21 to start to mess around and play with that stuff.
0:36:23 But that’s kind of how I’m looking at YouTube
0:36:26 and trying to build up that presence over there.
0:36:29 But that’s the second part of the triple threat, the tool.
0:36:31 So Mike mentioned Empower.
0:36:35 Monarch is the one-time sponsor of the podcast
0:36:37 that is kind of in a similar space.
0:36:39 So we’ll link that up as well.
0:36:42 And your favorite book from the last 12 months.
0:36:43 – I think I got to go with the book
0:36:47 that really ties into the active versus passive income theme.
0:36:50 And that’s “Buy Back Your Time” by Dan Martell.
0:36:52 I think that’s a really good book
0:36:55 that when vendingpreneurs sign up for our community,
0:36:57 vending’s not passive right out of the gates.
0:37:01 But when you start to actually quantify
0:37:03 high-leveraged tasks in your life
0:37:05 and do self-reflection on,
0:37:07 should I be stocking a vending machine
0:37:09 or should I be going to close the owner
0:37:11 of 20 more properties that really–
0:37:13 – Yeah, to get the next locations lined up, yeah.
0:37:15 – Exactly, those locations
0:37:17 are worth a couple thousand bucks a month.
0:37:20 So those machines, you can hire someone for 20 bucks an hour.
0:37:21 So it just forces you to really go
0:37:23 through a self-evaluation reflection
0:37:27 on getting the time that’s most meaningful for you.
0:37:29 And it’s such an easy read
0:37:30 and it’s definitely a book I recommend.
0:37:33 – Yeah, a couple thousand bucks a month per location
0:37:36 plus the equity, the multiple that that would be worth
0:37:39 to go and sell the route, like hugely more leveraged
0:37:42 than going and piling more Snickers bars
0:37:43 into the back of the machine.
0:37:44 – 100%.
0:37:47 – All right, “Buy Back Your Time” by Dan Martell.
0:37:50 We’ll link that one up, have not read that one myself,
0:37:52 but I’m looking forward to checking it out
0:37:55 and kind of lean into this elimination automation
0:37:56 delegation framework of like,
0:37:58 do I really need to be doing that?
0:38:00 So again, buy back your time.
0:38:05 Mike is Mr. Passive_on_X, you can learn more about him
0:38:09 and the vendingpreneur program at vendingpreneurs.com
0:38:12 where side hustle show listeners graciously get 10% off.
0:38:13 Thank you, Mike, for that.
0:38:15 If you missed our earlier episode
0:38:17 on how to start a vending machine route of your own,
0:38:19 make sure to check that out.
0:38:23 Number 599 of the side hustle show in your podcast app.
0:38:25 Big thanks to Mike for stopping by again,
0:38:28 sharing his insight, big thanks to our sponsors
0:38:30 for helping make this content free for everyone.
0:38:34 You can hit up sidehustlenation.com/deals
0:38:37 for all the latest offers from our sponsors in one place.
0:38:39 Thank you for supporting the advertisers
0:38:40 that support the show.
0:38:41 That is it for me.
0:38:43 Thank you so much for tuning in.
0:38:45 If you find an value in the show,
0:38:47 the greatest compliment is to share it with a friend.
0:38:49 So fire off that text message,
0:38:51 let them know about this conversation.
0:38:53 And until next time, let’s go out there
0:38:54 and make something happen
0:38:56 and I’ll catch you in the next edition
0:38:57 of the side hustle show.
0:38:58 Hustle on.
Many side hustlers dream of passive income — that magical money machine that keeps churning even while you sleep.
But is it a realistic goal for everyone?
And with limited time, what should side hustlers focus on? To help break this down, we’re going three rounds with Mr. Passive himself, Mike Hoffmann.
(Check out Mike Hoffmann’s Vendingpreneur training program and get 10% off!)
Full Show Notes: Active vs. Passive Income
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