More Than A Side Hustle
More Than A Side Hustle
The Passive Income Myth: What No One Tells You
In this episode we explain how to build passive income streams—by using systems, automation, outsourcing, and repeatable funnels so you can earn income outside your 9-5
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Everyone wants passive income, but they skip the most important steps, and today we're talking about how to actually earn income while you sleep, with the right systems.
Speaker 2:Your name is Anthony and I'm Janoka. Welcome back to the More Than a Side Hustle podcast. It is happy to be, we're happy to be here. I should say Catch us when you can.
Speaker 1:Hey mama, we are live on the show. All right, say hi people, Hi people. This is Alani.
Speaker 2:She is our three-year-old daughter and she's going to be a millionaire by 18, right, yeah, okay, love you, love you mama when we finish.
Speaker 1:Okay, we're going to be finishing in a few minutes.
Speaker 2:Bye.
Speaker 1:All right, let's get back to it. So today we're talking about how to build passive income and, more importantly, the things that people don't want you to know, that no one tells you the harsh truths about what is this passive income thing?
Speaker 2:so I want to start by saying, when it comes to passive income, I think you either have money or you have time. When it comes to income in general, you have money or you have time, and many people don't have the money, and then they say they don't have the time either, and I think that in order to get something passive, you got to work or work and then eventually it becomes I don't know if you just start a business passively in general that's twofold you have money or you have time. If you don't have the money, you should have the time, and passive comes with time. If that makes sense, it doesn't just you don't just start it that way automatically.
Speaker 1:Absolutely. Now I want to define what passive income is, because sometimes people think that passive income means you're just chilling on the beach and you're doing nothing.
Speaker 2:Making money while you sleep. That's kind of how it's spoken about on social media.
Speaker 1:Yes, making money while you sleep is different than you sitting on the beach doing absolutely nothing to make money.
Speaker 2:What's the difference? When you sleep, you're not doing anything.
Speaker 1:Well, yes, you're not doing anything, but I don't believe that there's anything. Truly, that's passive Number one. Once you believe that there is no version of passive income like it all requires some sort of activity up front, once you understand that, then you can think about how passive is it. I think that's the difference between what most people believe versus the actual truth of what passive income is.
Speaker 2:Yeah, I think when you say that, how passive is it? It reminds me of, like, the way we run the cleaning business. So we are not doing the cleaning, yep, so that part can be seen as passive. However, you still got to run a business, you still got to market, you still got to do your P&Ls, you still got to make sure everything is going right day to day. So there is a passive component, but there's still a part of it that you have to be involved with.
Speaker 1:And most people say they want passive income, but their actions prove otherwise. And I know this because when I talk to people all the time, one of the first things they, when I asked them like, why do you want to start a business, they always say, oh, I want other streams of income, also want to make passive income. But it's like when you think about the richest people in the world and their version of passive income and you're trying to get to that version of it, you know there's going to be some form of upfront investment. So if you think that you're going to start absolutely you're going to invest nothing and make everything, that's a harsh truth that you have to realize. That is not going to be possible for you.
Speaker 2:Right, at least not a business that you want to kind of grow and scale, right, I think if you're doing it to, I don't know, pay something $100 or less a month, maybe, maybe you can find something like that. But if you really want to scale where you're making thousands of dollars, you will have to put the work in and it will come to a point of some type of passiveness but getting there is a process and talking about it doesn't get you there.
Speaker 1:So we started our cleaning business about seven and a half years ago. Now we can say we built this thing over the course of seven and a half eight years. Most people spend that same time talking about the things that they're going to do I'm going to start this business, or I want to do this, or I want to do that. It's like how long have you been thinking about building this income stream or starting this business or whatever it is? And it's like, well, it's been about four or five years in the making. It's like you haven't taken action, like what's ready to do it. So we're going to dive into some of those things. So let's go ahead and talk about. You know. Obviously, today you know we had the ability where we could make money at sleep doing different verticals, but we'll talk about that. So let's get into how you actually earn money while you sleep with the right systems so that I think that was the one thing I want to point out.
Speaker 2:systems is probably the name of the game for all of this right, things have to be put in place for things to work passively, essentially, and systems is what you need. If it's with AI, if it's with people, if it's with the CRM, whatever that looks like, you do need systems in place, and that's kind of how we're able to do all the things that we do with the systems that we put in place. So here is how to actually earn money passively or while you sleep. So the first one you want to start with that one.
Speaker 1:Yeah. So pick a business model that doesn't require your daily attention or daily involvement or involvement from you as the business owner. 24 seven. So a few versions of this. So number one obviously we have our cleaning business now starting off earlier. In our business we it did require us to be involved. Now we wasn't involved 24 seven because we had the systems, process and procedures in place. But when you start you may have to be more involved, actively up front, but you are not going to be trading your time for money the entire time while you're building this business. So choosing a business model that doesn't require you to trade your time for money, that's one version of what we call passive income.
Speaker 2:Another thing is digital products. So we have Cleaner Business University, which is a digital product, or anything that we've sold in the past. We've sold how to get out of debt before, and so anything like that where you're putting your knowledge into a course, if you will, or um, a masterclass or anything like that can help you once you do is kind of set it and forget it, unless you kind of grow it. But once you do it, once you get your information out there, you can kind of just sell that and that can be a passive thing where people can purchase from you overnight anywhere in the world, and that's another way that a lot of people do in this day and age. I would say, would you say OnlyFans is a digital product.
Speaker 1:Yeah, yeah, digital experience, because they're not going out. It's a digital experience, digital experience, because they're not.
Speaker 2:Why are you thinking about OnlyFans right now? I just thought about it as a digital product. You want to do OnlyVans? No, why, what? Where did that even come from? I just thought about it, as it possibly could be seen as a digital product.
Speaker 1:Well, that's an ultra-fast way to get a passive income.
Speaker 2:There's different ways People are clicking things, but I just thought about it as a digital product just in case.
Speaker 1:Yeah, so two paths that you could take. So number one would be like the nine to five route, where you are taking your money, you're investing it. Everyone is not meant to be an entrepreneur. Sometimes, right, sometimes you might be the person that has a really good job, you make really decent income and your goal is just to invest that money quote unquote passively. But you got to get active upfront.
Speaker 1:So you might take your nine to five money. You might invest in things like the S and P index funds, where it can grow, you know, 10% well, seven to 10% year after year, what doesn't require you to go out and do any work. Then your money starts to compound where that's the version of passive income, where you're like oh, it might start over a few hundred dollars a year and then it might turn, turn into a few thousand and then a hundred,000 a year, and we've seen some things grow as quickly as $100,000 in a month. So those are things that you could start very early on. That is active up front, but long-term investments tend to turn passively down the line.
Speaker 2:So two paths to passive income, Like we started listing and then you jumped to that. I'm like wait a minute.
Speaker 1:We're going to talk about businesses, but that's one version of it. For those who are like, listen, we're going to talk about businesses, but that's one version of it. For those who are like, listen, I want to keep my nine to five. That's totally fine, but it's going to be really hard to replace. It's a slower route, yes, a slower route. It's going to be really hard to replace a $60,000 a year income by investing in S&P index funds for 10, 20, 30 years.
Speaker 2:Another slower way I kind of think of is rental properties. I know that's a big thing, I know that's a big thing, but in the grand scheme, depending on your goals, right, if you're just getting $500, if you have two properties, you're getting $500 each. Maybe that's a thousand dollars. Is that enough for you, right? I know the long-term game of renting is like the equity and things like that, but that can be a slow build, but that can be considered passive as well If you have a property manager in place, things like that. So that's one side of it. And then, like, the fast side is what we were speaking about with the digital products.
Speaker 1:And I want to stay with the rental properties because it takes a lot of compounding to actually replace your income with that.
Speaker 2:If you're doing traditional rental properties a lot of properties.
Speaker 1:So you might be cash flowing, which means that after all expenses, you might have $100, $200 to yourself. But you just invested $60,000 in order to make $100, $200. Now how many times do you have to do that in order for it to compound to the actual returns that you want? That is a really long-term game. Or, unless you're investing aggressively up front, then you could turn it. Or if you want to go to commercial or multifamily things like that, but that's another way to do it, where you see people compounding their investments but again you want to replace a $60,000, $120,000 a year salary. It might take a little bit more time.
Speaker 2:So those are the two separate ways of the two paths of passive income. We should say so like the slower route where you're investing rental properties for one case like that, which are nine to five.
Speaker 2:And then there's the faster route where you may start a business. You have digital products. You set a goal of $100K in one year, two years. There's no right or wrong way, it's just what you feel comfortable with. Or you can do both of them at the same time right, and that can kind of get you to your goal quicker, if you will.
Speaker 1:Yeah, that allowed us. Our story was we went from $0 to $3 million in seven years with our cleaning business and then we went from zero to $3 million and about four years with our digital businesses. So you see how those winds start to compound a lot faster by creating your own, by creating your own outline and goals. From that Number two document your process once so you could use a system to actually record how your business is run. So this becomes your training, your system, pretty much your SOP library for your people.
Speaker 2:So that whenever you get maybe a VA or you grow, you get an operations manager or something in place, you have these things down Now documenting, especially in this day and age. So many people do it and you should be doing it because you just never know. I think especially people love the story of the buildup. So whenever somebody comes out with a product and then they share the behind the scenes, they share how they thought of the name and then they were in the factory or whatever it looks like, people love to see that.
Speaker 2:They don't like to just see the product, the end product. So making sure that your document is, I think, in the day and age that we live in, you definitely should be, because I think that helps your brand, that helps your business and whatever it is, you're working on.
Speaker 1:That reminds me of a story Somebody was telling me about their cleaning business journey. They did. I think it was like $500,000, whatever the number was and it was like, well, we didn't hear from you for the last three, four, five years. You telling your story today is great, but we want to see the come up, we want to know the pitfalls, we want to know the ups and downs.
Speaker 1:So when you go back to our social media, back in 2017, when we started documenting everything that we were doing at the heart, trimony, above our heads um, in our social media page, we literally documented the day of our wedding up to where we are today. So you can see us before kids, you can see us before we moved down to Texas, you can see us before businesses, everything. So we're documenting the process and then, as we're going through, we're just documenting our lives. So people think about documenting, you know, sometimes like creating content, but they can just be documenting your lives as you're going through.
Speaker 1:But then, when it comes to the business side, once we hired people well before we hired people, we knew that there was going to be someone who needed these documents from us. So it's like what are we doing day to day? What's our call flow, what's our schedules? What can we share with the team so that we can then grow and scale it without us having to be involved every single day? And going back to the cleaning business, we had our first daughter, alani, right before we were going on leave. We essentially documented the entire business using Loom, using Google Docs, using everything we knew that we had in our power in order to share with our operations manager to effectively help us scale our cleaning business while we were out and I think the very next month we did like $60,000 while we were tending to our newborn.
Speaker 2:So number one is picking the business model that doesn't need you daily. Number two is documenting your process. Number three is automating lead follow-up. You're probably like huh, what? So at this point I think if you have a website or anything, you should have a way to kind of automatically respond to somebody. If it's an automatic text, if it's an automatic email, whatever services that you're doing or providing, or even a product that you're providing, you should have a way to automate a response so that if people that contact you at 12 am, you don't need to be responding right away. They can get that automation and you go from there. This just helps.
Speaker 2:I think, just the day and age that we live in, people are shopping at all times, people are doing things at all times and this helps you to keep that client. This helps you to kind of automate your processes. Obviously, you know we live in a world of kind of AI and things like that and if you don't utilize some of it maybe not all, and no people don't like it you kind of get left behind with the business and the way things are going. So the more that you're able to automate things, the more revenue you're possibly able to bring in the more time you get back because you didn't have to physically go and respond, your automation may give the client what they needed just by the text back or the email. So automation would be key, especially in this day and age. I would say, if you're building something passive so that when you're on the beach you don't got to respond right away.
Speaker 1:I remember this one story with. I forgot this lady's name, but she literally booked us at 12 o'clock midnight and I remember the entire journey because she came in and said you got a new lead and then it was like you got a new booking, you got a new customer. So this lead was able to find us on the platform, reach out to our cleaning business and then eventually close themselves. So if they're calling your business at midnight, who are they going to talk to? More often than not, no one, unless you're using a VA or AI. But more often than not, if you aren't you know you're trying to bootstrap it you could send them directly to your booking website.
Speaker 1:So we have a system that sends a missed call automation text back from like a system that we created called TidyTrack, and if you want to learn more about that you go to tidytrackio. It is a CRM for cleaning business owners by cleaning business owners, and one of those, one of those automations are missed call text back. So even if you don't win that client now, they're going through a sequence of three, four or five emails and it might be a three, four or five text messages with the goal of essentially booking that client and getting them back on a schedule. So, no matter what business you have need to be using automating lead follow-ups as you're going through day to day, and this is like we said, a way to book clients without having to lift a finger, back to that passive feeling, that automation.
Speaker 2:But once again, you got to kind of set that up to get there and then it will become passive in that I don't need to speak to you. And that's why we have, you know, like you said, a website for our cleaning business, so that people don't always need to speak to us in order to get what they want. Essentially, we live in a world where people want it immediately If I don't have to say anything to anybody and I can find it in one place and get what I want, then that's what people want.
Speaker 2:The fourth thing outsourcing fulfillment. So, whether it's a VA outsourcing for our situation, outsourcing a cleaner to go do the job as we're the middleman, uber's outsourcing it to people that drive and have cars, things like that outsourcing your fulfillment. You do not have to do every single part of your business.
Speaker 1:And you shouldn't.
Speaker 2:Now, initially, once I got to go back to that, the beginning stages you are doing all of it so that you can teach somebody eventually and that you know the business, just in case something breaks and just in case somebody can't come in, whatever that looks like. But to run a business you don't want to be the one doing it all the time, because then there's never a break. It kind of reminds me how people say you know, nine to five is 40 hours, entrepreneurship is 80, 85 hours, because then there's never a break. That's not why you started the business for you to be in it 24 or seven, so you want to be able to outsource your fulfillment as much as possible. Like I said, not everything, but as much as possible.
Speaker 1:Like I said, not everything but as much as possible would be something. So, if you think about, like Janoka said, Uber outsources their fulfillment, Airbnb outsources their fulfillment. Amazon you see the Amazon trucks pulling up they outsource their fulfillment to third-party carriers.
Speaker 2:Yeah, sometimes people just drive in a regular car. It don't be an Amazon truck Sometimes it's not an design truck.
Speaker 1:So when people come to us and say, well, how do you run a cleaning business without cleaning? We're outsourcing the fulfillment. It doesn't mean that we're not running the business on the backend. But if you think you're the, if you think as the owner and not the operator, you're going to know from day one that I'm not going to be the one going out and cleaning every single home because I'm not going to be able to scale that business. So, no matter what you're doing, if you realize that you have to do every single piece of the business is going to be ultimately extremely difficult to scale.
Speaker 1:What happens if you call out yeah, get sick. What happens if you get sick? Worst case, what happens if you vacation is a good one? What happens if you get hurt and you physically can't do the work or labor? You can't show up to your office that day. Who's going to do the work? We think about your nine-to-five job when you call out your. When you call out your job as the ceo, come in and sit seat. No, the answer is no. I thought it was rhetorical. Well, but they know, we know that, they know that, but we still get the question all the time it's like how do you do this? So I want you guys to think about outsourcing the fulfillment and then, even if you aren't at a place where you can't outsource the actual labor, maybe you outsource some of the tasks to a virtual assistant. You can or onlinejobsph or upworkcom to find a VA from the Philippines for like $5 an hour and now you can outsource some of those admin tasks. And that's one of the first things that I recommend people doing is outsourcing those admin tasks so that you could get more time back to actually work on the business instead of in the business.
Speaker 1:And then, number five, a repeatable sales funnel. So what does that mean? So, if you think about a funnel is someone that is coming to learn more about your services and there is through a website, mostly through a website maybe, maybe not a. Well, you can do postcard funnels. There's tons of ways to do it, but, as I talk about digital age, most of the time they'll be coming through the website and your goal is to take them from a cold prospect meaning they are just learning about your business to an actual client or customer.
Speaker 1:So that funnel might be different pieces of that journey. So one of the pieces of the funnel might be awareness. They never even knew about you. So now you're seeing an ad or something and now we're talking about systems right. So it doesn't mean you're going down and doing cold calling or you're doing face-to-face door knocking and things like that because those aren't systems right. That doesn't mean somebody has to manually go out and do it. Maybe somebody digital, a digital funnel even for your cleaning business, for our cleaning business. Awareness, just learning more about you, what I could do for you, how I could service you. A podcast can be part of a podcast. It's part of fun. If you have a local service business, you could do a local podcast.
Speaker 2:Usually when I, when I think about websites, we're going shopping, when they say so that they can text you a code Yep, so now you're part of their funnel, you're part of the ecosystem, so now they'll text you and then they'll probably be emailing you once you actually do the order and so that's kind of in a smaller scale of funnel, if you will.
Speaker 2:Or when you're checking out, they also show you things that usually match with this product that you're buying, or people usually buy with. That's part of a funnel, essentially, if you think about it in that way when you're shopping, that's what I think about. So having that allows people to see like, oh, I didn't think about that, oh, that looks cute together, so maybe I will get it. It's just giving people more options that they maybe knew about or didn't know about or didn't know about but wasn't considering getting it until you presented it Right. And sometimes, oh, if you spend one hundred dollars, then we'll give you this money off. That's all part of like a funnel for most um for these stores and big brands, if you will and these are repeatable funnels.
Speaker 1:If you think about ikea when you go in ikea, that's one big ass funnel. God, you have to walk through every single, everything. Every single hour is a funnel and think about it right before you check out. What do you normally see in general, like different stores?
Speaker 2:oh, the dinkity thing that you don't want your kids running through, all the little things that you don't want your kids to see the candies, the bars, the little toys baby has it.
Speaker 1:These are called. These are upsells sephora has. Yeah, all of them have. These are upsells in your funnel. These are repeatable processes. Now the low ticket.
Speaker 2:Those are the smaller, like the travel size, exactly cheaper price. I say this because it racks up.
Speaker 1:So these are repeatable sales processes. So when you check out for our cleaning business, it might say do you want to add a move-in, move-out? Do you want to add a deep clean? Do you want to add your fridge? Do you want to add your oven? Oh, we could also do it. No, we could do windows. Didn't know that we could do carpet. These are all that we have in our cleaning business, that you guys should have in your businesses. That will allow you to create that passive income right.
Speaker 2:Oh, that's funny because these companies really be kind of going, so those are just to repeat it back and then we're going to get into some, some barriers that we kind of see. So the way to actually earn money while you sleep passively, I'll use this way picking a business model that doesn't need you daily. We spoke about that's number one. Number two documenting your process. Number three automating lead follow-up. Number four outsourcing fulfillment. And number five, creating a reputable sales funnel. Now, we spoke mostly kind of in a digital way, but we tried to give examples for you to see it in our cleaning business in ways that it may fit for your specific business or your model as well.
Speaker 2:But we also wanted to speak about kind of the barriers around, why people kind of get stuck with creating things, because either we've been through it or we've heard it from our students time and time again.
Speaker 1:We was on.
Speaker 2:IG Live last week and somebody was like, yeah, I'm just stuck, I'm just scared and I have no reason to be scared, but I just am so, just kind of the barriers around that, so the things that are actually stopping you, right, you sometimes say I don't have the right idea, I don't have the money, that's a big one, I don't have the skills, maybe I don't have the time, and I think I go back to like you have to start somewhere, right?
Speaker 2:So if you don't have the money, right, it's not going to just fall into your lap, I mean, unless you take out a loan or credit card or something, but generally it's not going to just fall into your lap. So is there things that you can do to then build up to that? And it doesn't mean that you have to start this grand business either, right, cause I believe that if you're starting a business, you should have some type of money to help you grow. But is there other things that you can do to kind of get started? Right, if you're thinking like, well, I don't have the money, maybe what you're, what you need to do, only requires $400. Right, maybe it's not as much as you think. Maybe $400 can get you a step closer to wherever you need to be to then start.
Speaker 1:We started our cleaning business with $1,500 and less than that, less than $1,500.
Speaker 1:And we grew it to a almost a $3 million business. So if you think about the grand scheme is like oh, $1,500 is a lot of money to start a business. Well, if you look back seven, eight years and you made almost $3 million. What's $1,500 a lot? Looking back, it was more about the risk and I think that's really what it comes down to. I was reading this quote and they was like the risk to reward ratio is about 10%. So whatever you want to make, 10% of that needs to be a risk. So think about it like this If you want to make $100, your rate of risk is going to be $10. You want to make $1,000, your rate of risk is going to be $100. That's 10%.
Speaker 2:That's kind of low.
Speaker 1:If you want to make $10,000, your rate of risk is going to be about a thousand. You want to make a hundred thousand, you got to be willing to risk at least 10,000. And if you want to make a million, you've got to be willing to risk at least a hundred thousand dollars. And then billionaires think about them. Elon Musk is shipping off rockets. Each rocket is a couple hundred million dollars to do, and if it blows up, that's the risk. This is why these, this is why billionaires and millionaires are able to get to their goals a lot faster, because their risk to reward ratio, they understand it and they're willing to risk something in order to get to that reward.
Speaker 2:And those are some of the external barriers, right? So, like I said, I don't have the right idea, I don't have enough money, I don't have the skills, but then there are internal barriers, which is kind of us at war with ourselves, Fear of failure, perfectionism, imposter syndrome. I think we all have that at some point in our lives, but does it keep us in one place or where do we go from there when those things happen? I would say make the difference. You know perfectionism, you need to know everything first. But then the question becomes why, like you know the information now.
Speaker 2:Now what and I think with business specifically, or you starting something that's passive or side hustle, however you want to describe it you have to go through it to really understand. It's one of those things. It's really one of those things you don't know until you go through it. I don't think everything in life is that way, but specifically when it comes to failures and things happening in a business, you have to go through those feeling, that gut, that customer cursing you, whatever that is. You have to go through it because, even as much as anybody can describe it to you, until you go through it you don't really understand or know how you will handle it Right. So you know you're never going to be ready if you will, or it's never going to be perfect.
Speaker 2:But that is the beauty of a business. That is what most people like, because no one is perfect. So right, people want to see the good. Bad and indifferent People understand that you're going to get a bad review, because that is life. You cannot please everyone. How you respond to that is different. So kind of you know that internal barrier that sticks with us. That's something that I think we have to sometimes talk through, maybe talk with people that have done it before to kind of help you get past that.
Speaker 1:Your breakthrough is going to be the day I stopped planning and the day I started doing so. As we wrap guys, I want you to think about these things. So, number one, stop lying to yourself. If you want passive income, you got to do something active up front. Remember this is the harsh truth that most people do not tell you about passive income.
Speaker 2:It's going to require some level of activity up front before it becomes passive and you can spend the next two, five, seven years kind of talking about it, or you can spend those years building it right, it makes such a difference.
Speaker 2:We have people come back in our DM saying like, oh, I was interested three years ago and it's like three years ago you could have made 500,000 by now, 100,000 by now, and you're holding yourself back. So go ahead, get started to do the thing that you want to do, whatever that may be. And then the question becomes for yourself like what are you going to do in the next 24 hours? So we kind of are open and honest with ourselves when things we say something and we're like okay, so what's the next step? And so that's the question for you Like what is the next step after listening to this? What will you do, knowing what it takes to kind of have passive income? What are you going to do with this information? Is it just like you know, appreciate you guys telling me, or is it you actually doing something different in your life?
Speaker 1:Let's go, and if you're serious about starting, here's some ways we can help. Number one below this video or somewhere you guys are watching this listen to us.
Speaker 1:You could join us at cleanabusinessmasterclasscom slash ebook. You can learn everything about how we started a seven figure clean a business. You could also join any of our free masterclasses where we go over in great detail on how we were able to earn a seven figure income actively, upfront, but then passively down the line. And then also you could just subscribe or like more episodes like this so we can help you out.
Speaker 2:You can watch any of the episodes that you'll see around this video to help you get to that next step. Thank you for tuning in. See you next time, peace.