Dream Chasers

Unlocking Financial Freedom: Strategies for Building Passive Income

• Eric Heidrich

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Ever wondered what it would be like to earn money while you sleep? Imagine a life where your bank account thrives, regardless of you working or not. This episode unveils the magic of passive income and its potential to unlock true financial freedom. We tackle the difference between active and passive income, shedding light on why the latter deserves your attention. We illustrate the importance of diverse income streams and an epic analogy of a chair with 62 legs (yes, you read that right!)

Moving beyond the theory, we journey into the practical realm of generating passive income. We discuss intriguing methods from renting out your car to teaching online courses, and how they can bump up your income without demanding your active participation. In our conversation, we underscore the importance of faith in the product or service you're selling, and the power of a supportive community.

Get ready to redefine your financial future with passive income!


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Eric:

This is the Dream Chasers Show. Hey guys, what's going on? It's Eric and Kate here with the Dream Chasers and we're so excited to have you here today. Thanks for showing up, and today we've got a fun topic with you to talk about. to you, with you, for you.

Kate:

We're going to do stuff.

Eric:

We're going to do stuff.

Kate:

And I think you're going to be involved.

Eric:

I think you'll be. I hope you're there.

Kate:

So we're talking about some income. It's been a topic that's been real heavy in our household. I call it an RV hold because we don't live in a house.

Eric:

We live in the RV.

Kate:

We live in an RV, so let's talk about passive income. What's passive income? Eric James Heidrich?

Eric:

Well, so I guess my definition of passive income has always been pretty simple. And it's money coming into your account while you sleep. It's money that you're not actively having to work for. It's passive, not active.

Kate:

So it's the tooth fairy.

Eric:

It's a tooth fairy. Yeah, it's imaginary, no, but I mean you check your bank account on your app or whatever, and there's money showing up, right.

Kate:

So there's not just fat stacks that are showing up under your pillow.

Eric:

Or even kids when they put their tooth under the pillow. That's passive income.

Kate:

Yeah, well, that's what I was thinking Like. I just pictured a tooth fairy sneaking into a grown adult's house and sticking like rolled up ones underneath your pillow while you're sleeping.

Eric:

So all right then. What's the difference between passive and active? What is the active side of?

Kate:

income. Well, i mean, you're actively working for it And I feel like, well, like there are some cases where active and passive kind of flow in and out of each other. sometimes Some of our we're going to be talking about the different forms of real estate's our passion. So there have been times when we purchase real estate, we're actively working on it, you know, getting contractors out there and, like Airbnb, we're actively managing the Airbnb. But then there are times when, like the long-term ones, we stick a tenant in there and then it turns into passive. Somebody else is managing it. We just sit there and collect some money off some passive income.

Eric:

So yeah, that's a good point, And I think so. As we go into this podcast, we're going to talk about different types of passive income, But what I noticed about them, both from the research and from our own personal experience, was that it usually starts out as active and then later on down the line it turns into passive. So it's not just magical tooth fairy although I wish it were. That would be awesome.

Kate:

Yeah.

Eric:

Let's dive in real quickly. We want to talk about a few reasons why passive income is so stinking important.

Kate:

Okay.

Eric:

And why you should be focusing on it.

Kate:

Well, who doesn't love waking up and just seeing some fast stacks roll into your account?

Eric:

Yeah, I think another reason that passive income is so important is that it gives you freedom. Like how many times have we met, either met somebody or had our own personal experience where we work all the time right, like 40 hours a week used to be the standard And now it's like if you're not working overtime, you ain't working hard enough, so it's your trading all this time for money And for the most part, as an employee or whether you're on salary or hourly, you pretty much know how much money you're going to get year over year, whereas this passive income is just a little bit extra and a little bit extra and the more streams you add to that, you just start building it up. It's like different streams going into your pond And if you can get five or six streams going into one, it just builds. It's amazing.

Kate:

Eric's the king of analogies. He likes to. He also has this analogy about chairs that if we were, if Eric was actually a carpenter, every chair would have 62 legs. 62?. 62 legs because he talks about how adding each stream of income is like another leg to your chair. So if you ever want to see something freaky, ask Eric to build a chair. It's going to be the most stable chair there is The most stable chair there is.

Eric:

Well, i mean think about that, though. It makes sense Like if you look at your income as like a leg to a chair. If you just working and that's your only income. If you get sick, injured, hit by a car, lay it off, yeah, if you have your leg to your chair to get cut off and that whole chair collapses. But if you have some rental properties, if you have some businesses working for you maybe you wrote a book or something and that's bringing you in money you have more legs to your chair. You can stay in your hospital bed and still make money.

Kate:

So that's 62 leg chairs.

Eric:

Looking pretty darn good, looking super stable right about now. You know what I'm saying, so.

Kate:

Another thing, like the passive income. It gives you the ability to live and work anywhere, and over the last two, three years since COVID, like we've really been blessed with the opportunity to realize that we don't need to be at work in order to work. Now, granted, there are some situations where that doesn't work out, but if you're currently in a situation like your job, where you are working remotely more and you get maybe work part-time at work, part-time at home, how stinkin' cool is that? And the more passive income you get, the more you get to step away from the job too, which is pretty neat.

Eric:

Yeah, and spend time with your kids. If you've got kids or going on vacations, get hobbies. And it's funny because I noticed especially in my own life as I was younger, i had a whole bunch of hobbies.

Kate:

Yeah, you did.

Eric:

And it's things I did scuba diving, motorcycle, whatever all of this stuff. But then you start working more and more and more at your job And then you lose those hobbies. The motorcycle sits there with collecting dust and whatever else, like the sewing machine collects dust because we don't have time to do it, yeah, and then if you start building passive income, you get to go back to those things. But I realize now I have less hobbies, like as we build the passive income stream, i have more time, which is great. And now I'm like shoot, i need to find something to fill my time with, i gotta get some highs, yeah.

Eric:

So it's a blessing and a curse, but it's still a good thing.

Kate:

Yeah, and I think that it provides people the ability to kind of choose what they want for their future and how they want to live retirement. And yeah, if we're relying on social security to whenever we get to retire 65, 67, whatever it is you're on a fixed income If that's your only leg to your chair, but if you have some passive income that's paying you until you die, you got more play money.

Eric:

Yeah, exactly, and even with that social security, i feel like it's not a whole lot of money. Like most people that are on it, they're still paycheck to paycheck. They're not living super lavishly, going on vacations and stuff like that. For the most part, it's just enough to get by. Who wants that? Just to get by, you know.

Kate:

And we really don't know what the future holds to, but we do know what we've been seeing lately is inflation. So, yeah, if that's, if that has been your plan, there's nothing wrong with it. But maybe just open. Be open to the idea that pass an additional passive income is actually a pretty good idea, because we don't know when, the next time that eggs are going to triple in price or you're just forced to cut out eggs, i contemplated cutting out eggs from our diet there for a while, because I'm like who could afford $12 eggs?

Eric:

It was just stupid. Yeah, and gas too. Milk, Milk went through the roof.

Kate:

Yeah it did.

Eric:

But just pretty bananas, So let's move on. All right, so we have just beat this with a dead horse. You need to get passive income. Clearly that's what we're shooting for. So how do we do it? Kate and I are gonna break down a few different ways that both we do it, and also ways that we don't do. But we know about, We've read about it And we wanna do it.

Kate:

There's a couple things on that list that I wanna. Ooh, that looks like fun.

Eric:

Yeah, so let's dive in Number one that we're I wanna talk to you guys about. This is something that we both do, And that's real estate rental investments. Yeah, Fun stuff, And I think it's kind of a big scary subject if you've never done it, But it's important to know because real estate has this triple whammy. It's like it goes up in value over time. For the most part It does have cycles, but it goes up in value. There's tax benefits to it And you get month after month paycheck from your renters.

Kate:

Yeah, we love real estate, and we're not just saying that because we've got a real estate business to do it. Oftentimes, i convince a lot of my sellers not to sell their properties, and then they turn them into rental properties, which, you know, that screws me over because they don't get a commission right then and there, but it turns would be investors into actual investors, and that's a game changer, and that's what I love about the game of real estate, though, is that anybody could get into it, and it could change their life drastically, and that's pretty exciting, yeah, yeah.

Eric:

Totally.

Kate:

All right. So we've had a couple of friends do this And I think it's a really neat idea Rent out your car.

Eric:

Oh yeah, there's a thing called Turro Is the only one I know about. It's like the app, but renting out your car.

Kate:

So it's like an Airbnb, but for your car, and how neat is that? Like I'm sure there's drawbacks to it, but like Enterprise, they made a solid, they an entire business about renting out cars.

Eric:

Yeah.

Kate:

So people like you and me are just tapping into that space. We're not doing it because we have one car and we can't.

Eric:

Can't pull several vehicles behind the RV.

Kate:

Yeah, we'll be flint, just one Right, and we'd be flint, stoned out of everywhere if we didn't have that. But yeah, i thought that's a really, really cool idea.

Eric:

We've got a buddy that does it And I've talked to some other people that have done it. The benefits are obviously someone pays for your car Anywhere to the tune of 40 to $100 a day, depending on what kind of car it is and the condition, But they'll even come to your house to pick it up. You usually have that two options You want to bring it to that person or they want to just come to your house. They can get an Uber pick up your car and then go drive it around. I've heard some things where it comes back with dings and dents, but that's pretty standard And I know like Turro, I think, even has insurance for your car.

Kate:

Yeah, so, yeah. So I thought that was really cool Yeah.

Eric:

So rent out your car. Another way to get some passive income is to either start or buy a business, and now that is not for the faint of heart. We can tell you firsthand experience. Business is a big one, but there are a lot of benefits to it, and I think one of the best ones is you have ownership in it. You wake up excited because it's your business. But starting the business and running it is definitely active, but it can pay you dividends and passive form down the road when you have employees working for you, when you have people carrying the load or spreading the load out.

Kate:

Yeah, i really like those MLMs, some multi-level marketing ones. I think that they're in a spirit like those at home businesses A lot of people, like the common ones, like Sensey they think of, or there's a bunch of health ones that are out there. I mean, there's just a ton of them out there And it's really cool because they provide a lot of structure and they empower you to start your own business and do it on your own time. And then, of course, how it works with the multi-level marketing is that you get people underneath you to also do that.

Kate:

I think that it's important to only invest in something that you truly do believe in. So if that lines up with your values and what you enjoy doing and you can stand behind the product and you use the product ideally, that should sell itself And it gets you in the door to running your own business, which is pretty neat.

Eric:

Yeah, that is especially if you like, believe it. If you believe in the product, i feel like you can sell it much, much, much easier because you use it yourself. Most of the time, people can see right through when you're like a fraud, when you're just trying to make a quick buck And yeah, but it's still active when you're actively working on it.

Kate:

But once you start building your downline with your multi-level marketing basically having people underneath you running their own business with how the company works that's when you switch from active to passive, and I'm sure that you will still have to be active with getting more people underneath you and really getting up there. But I think that that is such a cool opportunity where we can all work together and empower each other and buy products from one another so we don't have to go to big brand stores and continue making Walmart rich.

Eric:

Yeah, exactly, and whatever price they choose, yes, whether they want this on their shelves or if they want. No people at the checkouts They get to dictate everything And then we just sit there frustrated with certain things. But or we can buy from our friends, buy from ourselves. It's pretty cool. We don't actually do the MLM, but I know people that do And it's a real thing. Some are scams, for sure, but some are legitimate.

Kate:

Well, Keller Williams was kind of an MLM. They had this thing called Profit Share, Profit Tree and where you would bring on someone Like, if you influence someone to join Keller Williams, which they're an incredible company to do it like, we have to contribute all of our success to KW. They empowered us to be the people that we are today and build the business that we have through our Hydric Real Estate Team.

Eric:

Yeah, absolutely.

Kate:

I think it's just incredible that there are so many, that that core concept of the multi-level marketing is really just finding other like-minded people and empower each other with the similar purpose. So another one that I saw that I really like is teaching an online course. And well, you can look at this and say, well, that's totally active. Well, what happens if you record a seminar and now it's just one hour of you talking about something that you're passionate about and that you know? now you've used technology to leverage that into a passive form So you can, if someone wants to, handgun safety, for example. This is probably a terrible example, because I know nothing about handgun safety But say, if I'm very knowledgeable about handgun safety and instead of teaching the course over and over and over again, i take several days to construct a course, record it and then now sell that seminar to people who are interested in handgun safety.

Eric:

Yeah, perfect example is our dance classes that we have. That we haven't used. We have actually purchased an online course in dance and how that one worked and we're not in any way paid to endorse this. It's called a show her off, but how that one worked is they sold it in chunks, like the first season, whatever had like five episodes where you learn how to dance And then, if you want to unlock the next one, you buy the next season And all they had to do is record it one time and then they sell it over and over and over again.

Kate:

How neat is that? Pretty cool Yeah.

Eric:

So, just off the top of my head, i have a friend in one of my speech classes and she works on little sculptures of clay And a lot of her times her speeches are about that. Like here's how I mold them, here's the products I use, here's, i stick it in the oven for this much time and then I paint it and like, imagine, and they turn out cool, yeah, and I make drawers and houses, whatever out of clay. Imagine if she went and made videos and you could sell that. I mean that's a great idea. So anybody listening. If you have any skill or passion, you could totally turn that into an online course.

Kate:

You really could, you really could And seriously, we can leverage technology and the internet so much that it's just bananas. The things that were amount like the things that we're able to do versus what we were not able to do 20 years ago.

Eric:

Yeah, Yeah, And we'll just touch on another one here, Probably one of the last. There's a few more we'll throw in there, but this is the last one. We're going to really like pull apart is writing and selling a book. So of course, like we said up front, that is active up front. You've got to take the time to write it. You've got to take a time to get to do the publishing whether you do it yourself and you edit yourself and all that market it yourself. But if you are able to actually provide something quality, good service that people will enjoy reading and it actually helps somebody, that thing over time we'll sell. Throw it on Amazon or you find a way to sell yourself.

Kate:

Spoiler alert that's actually been on Eric's dream sheet for quite some time. You told me, like two years ago, that you wanted to write a book.

Eric:

I know I do. How's that?

Kate:

book coming along, Eric.

Eric:

It's so weird because, i'll just be honest, i feel like I have a lot to teach, that I could maybe help, but I also don't know if anyone would buy it. It's that weird like faith and fear, like I'm like, oh, i have faith that I do have something to write, but I'm fearful it's going to fall flat on its face. I'm fearful it's not going to sell.

Kate:

And it very well could.

Eric:

Yeah, very well could.

Kate:

It very well could.

Eric:

I think, yeah, you know, you don't know until you try. So I think that's a big one. I feel like a lot of people have things that they can teach through a book and they want to. You know, i've heard a lot of people say they want to write a book, but it's like, where do you even start? So? but I know it's obviously possible. We read a lot of books and I know that the guys that wrote them if especially if it's a good book and comes a New York time bestseller, you become mega millionaires. You know, it might seem like it's overnight, but it probably takes some time to really get it down.

Kate:

Yeah.

Eric:

But writing a book could be a huge one.

Kate:

And I'm sure they were scared. They thought that it was impossible. Here I am just giving my husband a pep talk.

Eric:

Now Write the freaking book Eric All right, when we hang up, i'm going to write the title to the first chapter. That'll at least be a start, right?

Kate:

Yeah.

Eric:

All right.

Kate:

All right. So we those are just a couple of the ones that we really like to deep dive into, but we don't have. We got like a whole list here, like 20 some of them, and we don't have time to discuss them today. But if you're thinking like, hmm, this passive income, this is pretty cool.

Eric:

But I don't want to write a book and I don't have real estate and I, whatever, you know, whatever, like you said earlier, if whatever the excuse is, which, if you don't have those things, work on it.

Kate:

Excuses are results. You can have both right.

Eric:

Hey, yeah, exactly. So anyway, we've got a list here, We're going to go through some of these things and so just start writing them down. One of these, hopefully, can strike a chord with you.

Kate:

Yeah, if you like one of them, stick with it.

Eric:

Yeah, and go back through this, hit pause. Go back and you'll be able to hear some of these, because we're just going to basically list them out for you, some ideas that you can use to make some passive income.

Kate:

Yep.

Eric:

All right, number one. So all right, we're just going to go down the list here. Teach online courses We talked about that. Sell photos online. Become an Instagram influencer. Buy a rental property We talked about that. Invest in the stock market and you can earn dividends through certain stocks.

Kate:

Rent out a spare room or, like a spare garage, rent out your car. Lend money to peers. Maybe be a little bit cautious on that one.

Eric:

Yeah, unless you know what you're doing.

Kate:

Yeah, and then start a YouTube channel or start a podcast.

Eric:

Sell different designs online. Invest in businesses. Rent out some unused space, either in your house or even a rental that you're in. Earn royalties through inventions. I would love to invent something, but dang it. I don't know if I'm smart enough.

Kate:

No, that's not true, you've come up with a handful of inventions over the last several years.

Eric:

You just got to commit.

Kate:

Yeah, but no, it seems like every time that you do do it, you come up with the invention. You're like babe, this is going to be the next thing. Well, we look online. Somebody asked me.

Eric:

Dang it. Curse all these smart people that are inventing stuff.

Kate:

All right, write and sell a book, eric. Get on it. Invest in vending machines. That one's kind of a fun one. Sell a photography online.

Eric:

You could do some peer-to-peer lending, which is I don't know a whole lot about that, but research before you lend money to anybody. Yeah, create an app. Rent out a parking space. This would probably be for people in large cities that own some small amount of real estate or parking out in front of their area. Invest in CDs or high-yield savings account and rent out your house on a short-term Airbnb or VRBO. Cool, cool.

Kate:

I hope that some of these, i hope that at least one of these, inspires somebody out there to really get into the passive game because it's fun.

Eric:

Oh, it totally is. You get addicted to it, you get hooked on it.

Kate:

Yeah, once you really find your talent too, then it just seems easy after that.

Eric:

Yeah, you start getting focused, money-conscious and focused on it.

Kate:

All right. That concludes our episode on passive income. Why you should do it? why it's important, and finding something that you're really passionate about and continue to get paid during it, because that's a beautiful thing, isn't it? The adult magic tooth fairy.

Eric:

All right, we'll just leave it at that. All right, find your adult magic tooth fairy.

Kate:

Find your adult magic tooth fairy. Hope you guys enjoyed listening. We'd love to have you stay tuned for the next one and Hydrix out.

Eric:

Dream Chasers out.

Kate:

Dream Chasers out, but the Hydrix do the dream. We're chasing the dreams and we're the Hydrix. Hydrix out, we're out.