The 5 Minute Career Coach

Helping Career Changers Around The World

June 2013

Passive income…why not?


What is your gut reaction to the idea of creating a passive income stream (or streams)?  Do you think it is a great idea or do you hesitate because it seems a bit weird or you don’t think you could do it?

Here are some extracts from Steve Pavlina’s imaginary conversation with a friend about passive income vs a ‘proper job’. Hope it makes you smile – and also gets you to stop and think about what could perhaps be possible after all.

Get a job – because that is what everyone does

Herd of Pashmina sheep and goats in Himalayas. Himachal Pradesh, India

Friend: You know, you should join the world of real people and get a regular job. This passive income stuff you’re doing is just too strange.

Me: It seems to work well enough. What’s wrong with it?

Friend: Well, it’s not what most people do. Most people get jobs.

Me: How does that work?

Friend: Basically you go to work for some other company, usually a corporation. You do the work, and they give you a paycheck.

Me: Ok. Is my paycheck somehow based on the value I contribute?

Friend: More or less.

Me: So will I receive a fair amount relative to my contribution?

Friend: It’s probably around 30%, but it’s not tracked that precisely. They don’t really know how much value you’re contributing relative to everyone else. Salaries invariably involve a lot of guesswork.

Me: Where does the rest of the value I create go?

Friend: It gets distributed in many different ways like income to stockholders, to higher pay for officers and so on. That’s for the higher-ups to decide, so it isn’t really up to you.

What about hours and holidays?


Me: Hmmm… Do I have to work every day?

Friend: Usually just weekdays, but it depends on the job. You may also get a few weeks per year for vacation time.

Me: Only a few weeks? What if I want to travel for a month or two?

Friend: Well, you usually can’t. Maybe if you save up vacation time for a few years, then they would let you, but it’s not good to be gone so long at a stretch.

Me: What if I’m burned out and don’t feel like working?

Friend: There’s free coffee.

Me: Good coffee or bad coffee?

Friend: Depends on the job, but there’s always a Starbucks nearby if they only serve Folgers in the office.

Where do I get to work?

Me: Can I take my laptop to the Starbucks and work there?

Friend: Depends on the job, but usually not. They probably wouldn’t trust you to work if you’re out of the office too much.

Me: So they have to watch me work?

Friend: Basically yes.

Cubicle Nation

Me: Where do I get to work?

Friend: That depends heavily on the type of job. For many office jobs, you’ll work in a cubicle.

Me: What’s a cubicle?

Friend: It’s a subdivision in a larger room, delineated by short fuzzy walls. You should have enough room for a desk and a chair.

Me: My home office is about 200 square feet, and it has its own bathroom and shower. But I can work wherever I want, so I’m not confined to that space.

Friend: Yeah, you won’t get a space that size as a regular employee most likely, unless you work in management or some other high value job that warrants its own office.

How much will I get paid?

Me: What about the pay?

Friend: Well, you’d probably earn a lot less than you do now for doing the same kind of work. Just to give you an idea, the average salary for a blogger is about $17-38K per year.

Me: Wow… that’s a lot less than I earn now passively, even when I’m on vacation. How would I even live on that?

Friend: Other people get by on that much. You’d have to cut back quite a bit, especially since you’ll need more money for commuting.  But you might get a free company t-shirt and coffee mug and maybe a mouse pad if you’re lucky, so it sort of balances out.

What kind of work do I get to do?

Me: Ok. So what kind of work would I do at a regular job?

Friend: That depends on the job, but big picture… it’s usually something that supports the company’s goals.

Me: Who sets these goals?

Friend: At a well run company, the officers figure them out, with input from board members, key investors, and sometimes from employees too.

Me: Ok. So how do I know which goals to work on?

Friend: Usually your boss determines that, so you just do whatever your boss tells you.

Me: I have to have a boss?

Friend: Yup, everyone does. Even the CEO is accountable to the board and the shareholders.

Me: Ok, so what if my boss doesn’t do a very good job of telling me what to do?

Friend: That often happens. You muddle through. Just make sure you look busy when you’re being watched, and you should be ok.

Me: What if the boss and I disagree on how to achieve the company’s goals?

Friend: That’s where you start getting into company politics, which can be messy. Some people do what the boss says anyway, even when they know it won’t work. Other people try to push back or negotiate. Sometimes that works, but sometimes they get marginalized or even let go if the boss doesn’t like it. Usually people compromise somewhere in the middle.

And if I work really hard…?


Me: If I do a good job of helping the company achieve its goals, do I get extra rewards for that?

Friend: Yes, sometimes. You might get a raise, a bonus, or a promotion. Or you might get intangible rewards like praise, appreciation, and recognition. Sometimes, however, you don’t get anything more than your base pay.

Me: What if I come up with a really great idea, but it’s not part of my assigned duties?

Friend: Umm… yeah… don’t do that.

Me: Why not?

Friend: You’ll just be a rabble rouser. The other employees won’t like it if you try to upstage them, and they’ll make your social life at work unpleasant till you back down.

Me: So if I try to work harder or smarter and get promoted faster, the other employees may try to hold me back?

Friend: Probably. Your boss may not like it very much either.

Me: My boss wouldn’t like it? Why not? Isn’t it part of his job to cultivate good talent?

Friend: Perhaps, but he wants to look good too. It’s not good for him if one of his underlings is outshining him.

Me: So what is it like to work with a group where no one is doing their best, and everyone thinks less of themselves and their co-workers because of it?

Friend: Pretty boring actually. But again, you get used to it. The free coffee helps it go down easier.

But a job is more secure, isn’t it?

Me: Ok, so let me get this straight. You’re suggesting that I shut down all my passive income streams, go to work for someone else, get a boss and do what he says even if his decisions are unintelligent, do mediocre work instead of my best, socialize with people who also do mediocre work, work longer hours for less pay, take fewer and shorter vacations and ask permission to take them and pay a great deal more in taxes.

Friend: Pretty much, yes. But you’re overlooking the security aspect.

Me: What’s secure about it?

Friend: Well, you’ll get a steady paycheck.

Me: How steady? Does it ever end?

Friend: Well sure it can end. You could get fired or laid off.

Me: Can I prevent myself from getting fired or laid off?

Friend: Not necessarily. It could happen due to circumstances beyond your control. Or you might just make a mistake. Or someone higher up may not like you.

Me: So how is that secure?

Friend: Well, it’s mostly secure.

Me: So if I get fired or laid off, how much residual income will I continue to get?

Friend: Usually none. You might get a severance package for certain jobs, but that’s only short-term for transitioning. For the most part, once your job ends, you stop getting paid.

Me: But currently I get paid whether I’m working or not. And I can’t be fired or laid off.

Friend: Yeah, that’s weird.

Me: Just feels normal to me.

Friend: Well, I know you’re kind of set in your ways, but jobs are very popular. They obviously work for lots of people.

So people like their jobs, do they?

bored worker

Me: Do most people like their jobs?

Friend: No, at least 80% don’t.

Me: So why do they keep going to work?

Friend: They need the money. And what choice do they have?

Me: They could earn money without a job.

Friend: Yeah, maybe… but who does that?

Me: I do.

Friend: Yeah, but you’re weird.

Me: I appreciate your sharing all of this, but in a world that considers this job thing normal, I think I’ll stick with my current approach, even if you think it’s weird. I enjoy the work I do, I get paid well whether I work or not, I can travel whenever I want, I don’t have a boss, I can’t be fired or laid off, I don’t feel I’m overpaying on taxes, and I can do my best without feeling pressured to be mediocre.

Friend: Sure, that all sounds good, but most people can’t do it.

Me: Why not?

Friend: I don’t think most people are smart enough.

Me: There are lots of not-so-bright people earning passive income. You’d be amazed at how much mental capacity is freed up when you don’t have to deal with a boss or company politics… and when you don’t hold yourself back doing mediocre work instead of your best… and when you aren’t stressed about being potentially fired or laid off.

Friend: True, but those people are weird too.

Me: Perhaps.

Friend: Also, passive income is way too complicated for most people.


Me: If people can handle all the complexities of jobs, I think they’ll find it a breeze to earn passive income. There’s no job hunting, no resume, no application, no boss, no company politics, no need to save up vacation time, no risk of being fired, no commuting, and lower taxes. Yes, there’s a different learning curve in the beginning, but if people can handle working for someone else, I think they can easily handle setting up passive income streams. And once they’ve done it once or twice, it’s pretty straightforward after that.

Friend: Well, I’m still skeptical, so I suggest you give this some further thought. Again, jobs are very popular. I think you should give it a try.

Me: Do you think I’d like it?

Friend: No, but you’ll get used to it. Trust me. It will all be fine. Again, it’s very popular.

Me: Maybe for the free coffee.

Still convinced that a job is the only way?

If you would like to read the whole blog post, go to Steve Pavlina’s blog here

Something to think about

“If it’s important you’ll find a way.
If it’s not you’ll find an excuse.

~Anon~

With best wishes for your career change success

5MCC Back Issues from May 2012

About the author

Amy Thomas

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