Work a Day Job? These Stories Prove That Passive Income Is NOT Optional

Investing in real estate with a full-time job is hard but relying on external income is harder…

People are motivated by deadlines and the thought of impending pleasure or pain. Otherwise, the default choice is not to do anything. This is dangerous when it comes to building passive income and even more so for persons with advanced education.

There’s a misconception that the harder you work and more educated you are, the more job security you will have. This is false.

I have a PhD in chemical engineering. When I finished undergrad it was the most highly paid major of all and jobs were plentiful even in the 2008 recession. I decided to pursue a graduate degree to further my skills and become even more specialized. Career choices aside, the most critical decision I made was to begin investing in real estate as soon as possible. My plan was to continue growing my passive income until it met or exceeded my engineering salary.

Having income outside of corporate employment gives you an entirely different perspective and a safety net that no one can take away from you.

I recently came across a Twitter thread discussing horrible layoff stories. The insensitive ways people were let go of jobs was heartbreaking. Mostly because the employee seemed to have forgotten that employment is at-will for both parties.

There’s nothing wrong with working for someone else, but it’s important to keep these things in mind if you do:

You’re only as good as your last review

I remember being a freshly minted corporate scientist. I had befriended a senior scientist. He took me under his wing and showed me how to navigate the corporate environment. He showed me how to communicate technical ideas well and also some of the unwritten rules.

I was grateful to have a mentor I could trust.

After my first holiday break, I sent him a quick note welcoming the new year. The email bounced. My mentor had been laid off over the Christmas holiday and told not to return in the new year.

This was a big lesson only a few months out of school. This person had received technical awards, was a stand-out colleague and dream mentor. But that did not help keep stay employed. I learned that no matter how good you previously performed, there is a residual benefit for employees.

More education makes you even more vulnerable to corporate whims

Technical professionals are lauded as being at the top of the corporate food chain. Working for a Silicon Valley darlings is many people’s dream. High salary, beautiful location and working at the cutting edge of innovation.

It does sound attractive. But here’s the rub. The company is a darling, not their employees. Getting used to inflated salaries supported by loose government spending can lead to lifestyle inflation. It also makes those jobs highly vulnerable to outsourcing to lower-cost labour.

Highly educated workers are not immune to corporate agendas.

Let me be clear: I am not anti-business. Far from it. But I do recognize the need to create your own, independent source of income. Technical professionals need to insulate their income even more than blue-collar workers. The more specialized your expertise, the less autonomy the employee may have in finding another position or entering into another industry.

You Only Need $10,00 Per Month

Highly-paid employees earn around $100,000-$200,000 per year. With state and federal taxes, they only take home about 60% of that income.

If you can build a small business that grosses $10k per month, the more favourable tax base would support a similar lifestyle. When you can support yourself, you don’t need external employment.

Remember, employment is not a marriage. It is an at-will relationship that either party can end at any time. Putting in extra effort and long hours does not make an employee indispensable. In fact, if you are irreplaceable, you are a liability to yourself and the organization.

Don’t wait to build a passive income. Build passive income, and wait.