Ep 77 | You Don't Want Passive Income. You Want This.
In this episode, Priya challenges the widespread obsession with passive income - specifically real estate - and makes the case that chasing a financial mechanism before understanding the actual goal is one of the most expensive mistakes high earners make. She breaks down the real spectrum of passive income, from index funds and REITs that quietly compound to Airbnbs and rental properties that can feel more like a second job.
Takeaways:
Parking $100K in a savings account for three years while hunting for the right real estate deal means your money never started compounding - that delay is often one of the most expensive financial decisions a high earner makes, and it sounds completely reasonable on the surface.
At $250K in income, your career is probably your highest-returning asset right now - a raise, a promotion, or better negotiated comp compounds too, and it deserves the same energy as a property search.
Passive income strategies make sense after the basics are already working: retirement savings on track, consistent investing in place, and true excess capital available - not before.
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Stash Wealth is a Registered Investment Advisor. Content presented is for informational and educational purposes only and is not intended to make an offer or solicitation for any specific securities product, service, or strategy. Consult with a qualified investment adviser (that's us) before implementing any strategy. Investing involves risk, including the loss of principal. Past performance does not guarantee future results. There…we said it.
Transcription
You Don't Want Passive Income
A lot of people chase passive income because they want freedom. But the irony is for high earners, the thing most likely to create freedom is a thing we often overlook. Consistently investing and letting your money quietly compound in the background. Do not delay building wealth while chasing the thing you think will eventually create it.
Put the horse before the cart. Who the am I to tell you what to do with your money? My name is Priya Malani, currently managing millions of hardworking dollars. Enough foreplay, let's talk money. Welcome to the F Word: Smart Money, No Rules.
Hey guys, welcome to The F Word. It's rare I hear someone say, "I want a diversified portfolio that compounds my money consistently for a few decades until I can live off the income it generates." On the other hand, I hear a lot of people talking about this magical solution to all of life's problems, passive income.
I get it. Earning money while you sleep, never having to work again, true financial freedom. It's a compelling idea, and specifically, people are obsessed with real estate as the vehicle to passive income. Rental property, multifamily, Airbnb. It comes up a lot. The part that stresses me out is that I watch people spend months, sometimes years, searching for the right real estate deal while their money sits on the sidelines in a savings account.
They already know they want their money to work harder for them, but they're waiting to figure out the passive income piece first. If they could just crack that, jackpot. Unfortunately, it's the cart before the horse, and it costs more than almost any financial mistake I can think of. I do not wanna tear down your dreams of passive income today.
I simply wanna put the horse back in front so that you can really think about what you're going after and what the trade-offs are. Let's get into it.
What Passive Income Actually Is
So let's start by talking about what passive income actually is. Let's define it. This is where things get a little murky. Passive income is income that doesn't require your active, ongoing labor to generate.
Money working while you sleep. That's the dream. But not all passive income is equally passive, and honestly, some things being sold as passive income are just very ambitious marketing On one end of the spectrum, actually passive, a diversified portfolio, index funds, REITs, money invested and quietly compounding in the background.
Not super sexy, but very effective. Then there's semi-passive: owning part of a business, digital products, syndications, things that may require work upfront or just some sort of periodic management. And then there's the stuff people love calling passive that respectfully feels a little misleading.
Airbnbs, rental properties, small businesses. Because some passive income compounds quietly, and some passive income texts you at 2:00 AM because the toilet exploded. I'm kidding. Kind of. The point is that passive does not mean effortless.
What Are You Actually Trying to Solve?
So before you go chasing passive income, I wanna pause on a more important question. So what problem are you actually trying to solve? Before you go buying the duplex, what are you actually after? Because when clients tell me why they want passive income, they usually mean one of a few things. Sometimes they just mean I am burnt out. Sometimes they mean I don't wanna have to rely on one paycheck forever.
Sometimes they mean I want options. Sometimes they mean I just don't wanna work for someone else forever. It's worth knowing that those don't all require rental property as the solution. Because if what you really want is optionality, the path might simply be building enough assets that work becomes a choice.
If what you want is burnout relief, maybe the answer is restructuring your career, not buying a duplex. If you want your money working harder for you, good news, investing already solves for that. This question matters a lot because I think a lot of high earners accidentally chase a mechanism before they understand their goal.
Passive income is a mechanism. Freedom is one potential goal.
The Real Estate Reality Check
Okay. Now let me say something important because I am not anti-real estate, and I wanna be clear about that. Plenty of people have built incredible wealth through real estate, and there's an appeal. It feels tangible. You can touch it. There's leverage.
You put down $75,000 or $100,000, and suddenly you own an asset worth way more. Someone else helps pay the mortgage. I get it, but here's the part that I think gets romanticized. A lot of people think, "Once I get the property, I'm free," when in reality, for the first several years, it can often feel more like a second job than passive income.
Just from personal experience, tenants leave, things break, property taxes go up, insurance goes up. You still have to make decisions, and even if you hire a property manager, you still manage the property manager. That doesn't make real estate investing bad, it just makes it less passive than advertised, especially early on.
Real quick, if you've ever seen your paycheck hit your checking account and thought, "Where the hell does it all go?" You're not alone. If you're in your 30s making six figures, it's time to get your financial sh*t together. Go to stashwealth.com and book a call. All right, back to the episode.
The Opportunity Cost No One Talks About
Next up, one of my favorite topics, opportunity cost. No one talks about this. This really matters to me because I see it cost high earners a fortune. Let's say you decide you wanna buy a rental property. Amazing. So you start saving. You park $100,000 in a high yield savings account for a future down payment, and then you wait, and wait, and wait because rates changed, or the market gets weird, or you haven't found the perfect deal, or you're waiting for prices to cool off.
Three years go by. Meanwhile, your money never started compounding. That's the opportunity cost. While you're trying to engineer passive income, you delayed the exact thing that creates wealth in the first place. And for high earners especially, there's another thing to consider. Your career is probably the highest returning asset right now for you.
A raise, a promotion, building expertise, negotiating better compensation, those things compound, too. Sometimes the best investment a 34-year-old making a quarter mil isn't buying a duplex. It's continuing to build the machine already producing income.
When Passive Income Actually Makes Sense
Okay, let's talk about when passive income actually does make sense. I don't want this to sound like a never buy real estate seminar. That's not the takeaway. Passive income strategies often make a ton of sense, but only after the basics are already working. What do I mean? You're already investing consistently, your retirement savings are on track, you've built a solid financial foundation, and now you have excess capital.
Or maybe you just really enjoy real estate. That matters, too. Some people love the process. They like the renovations, the operations. They like building something. That's great. Just don't confuse a second business as a landlord or a real estate investor as passive income. And more importantly, do not delay building wealth while waiting for the perfect passive income opportunity to hit you in the face
The thing I want you to remember is this. A lot of people chase passive income because they want freedom. But the irony is for high earners, the thing most likely to create freedom is a thing we often overlook, consistently investing and letting your money quietly compound in the background. Do not delay building wealth while chasing the thing you think will eventually create it.
Put the horse before the cart.
Best Bite
Okay, before I let you go, I always end the show with a segment called Best Bite. I'm a big foodie, and I love sharing something that I've had recently that I think you'd love. It could just be me, but I kinda think that Thai food has replaced Chinese food, especially here in New York for, like, the number one takeout option.
I find a lot of people ordering it on weeknights, and it makes sense. It's super comforting, and there's usually leftovers to take in to work for lunch the next day. My recommendation comes from a place close to Union Square called Thai Villa. I've been eating there for probably about 10 years. But I recently had their mango salad with grilled prawns for the first time.
I already thought this was one of the most underrated Thai restaurants in the city, and now I'm sure of it. I got the mango salad as an app, followed by the red curry with chicken, which is also outstanding. But the fresh mango salad with the herbs and the peanuts and the sliced chilies was definitely my best bite.
So if you're anywhere near Union Square in New York, check out Thai Villa and the mango salad with grilled prawns.
All right, if this episode made you think differently about real estate or financial freedom or what your real goal is, please send it to your friend who's obsessed with passive income. And if you haven't already liked, followed, subscribed, please do so, so you don't miss future episodes.
Remember, you're a high earner, and that means high potential for building wealth and creating the freedom that you're after. All right. That's it for today. See you next time.
Thanks for listening to The F Word with Priya Malani. If you like what you heard, hit subscribe wherever you're listening, and leave us a review while you're at it. We're approval junkies. Don't forget, you can find a ton of great resources, content, courses, and other freebies at stashwealth.com. Now, for the capital S, stuff our lawyers want us to say.
Stash Wealth is a registered investment advisor. Content presented is for informational and educational purposes only, and is not intended to make an offer or solicitation for any specific security, product, service, or strategy. Consult with a qualified investment advisor, that's us, before implementing any strategy.
Investing involves risk, including the loss of principal. Past performance does not guarantee future results. There, we said it. Did I F that up?
THE STUFF OUR LAWYERS WANT US TO SAY: Stash Wealth is a Registered Investment Advisor. Content presented is for informational and educational purposes only and is not intended to make an offer or solicitation for any specific securities product, service, or strategy. Consult with a qualified investment adviser (that's us) before implementing any strategy. Investing involves risk, including the loss of principal. Past performance does not guarantee future results. There…we said it.
