How to Generate Passive Income so that You Can Achieve Financial Freedom. If you are here right now reading this blog post, then it should be safe to surmise that you have woken up from the woes of your physician job and are in the midst of pursuing the desire to manifest your ideal life. While the job definitely has its highs, being a physician sure has its lows. It is an industry-known fact that every physician has experienced being burnt out at least once in their career. Dr. Frank John Ninivaggi, MD, a physician at Yale New Haven Hospital and author of Learned Mindfulness: Physician Engagement and MD Wellness, shares, “The percentage of physicians feeling burnt out remains fairly consistent [through the years]. The leading cause is administrative burden, as driven by the workplace and organizational culture.”
This is a sad reality experienced by physicians across all specialties and age groups. Medscape’s National Physician Burnout Report 2020 reveals that 49% of physicians in all generations would accept less money in exchange for more free time. A large chunk of physician respondents in the Millennial (36%) and Generation X (34%) division would willingly give up $10,001-$20,000 of their annual pay just so they’d have 20% fewer work hours. Moreover, physicians from the Boomer generation are willing to give up even more, up to $20,001-$50,000 of their annual salary, to work less hours. A powerful revelation is exposed by said report: doctors are clearly yearning for more time outside of their physician profession.
In the business of financial freedom, time is the currency of wealth. The earlier you build your wealth, the younger (and longer) you get to enjoy your abundance. That being said, there is no time to waste. Much of this physician struggle is rooted upon the belief that there is no other solid financial path other than your 9-5 job – that couldn’t be any less wrong. More and more physicians are turning to other creative means on how to generate passive income and grow their wealth, and it’s time you should too.
By determining ways on how to generate passive income, you rid yourself of higher probabilities of physician burnout. This is because you are detaching yourself from your clinic shifts, not letting your financial security be dependent on your salary alone. Moreover, when you’re not bent over backwards using your job as a physician to make ends meet, it’s much easier to reconnect with your sense of duty and passion towards the profession. Many doctors can attest to this: there truly is a strong correlation between happier doctors and healthier patients.
Financial freedom can definitely be achieved by having multiple streams of income. Experts say it’s important to have at least 7 streams of income, and we discuss all of them in this separate blog. These 7 streams of income are, most often, a mix of passive and active income. As physicians, the goal of many of us is to be able to treat medicine as a hobby and to do more of what we love outside of our jobs. It’s important to have a clear grasp of your investment options in order to see how your active and passive income streams can complement each other.
Before you are able to do that, you must be able to differentiate among your 7 streams of income which ones are active and which ones are passive. Naturally, active income is when money is earned in exchange for a skill or product. These are income streams which require much time, effort, and attention from your end. Some examples include your 9-5 job as a physician, businesses which you may have, or anything that entails wages, salaries, commission, or tips.
Active income is a crucial facet of building long-term wealth because it affords you the provisions to invest in passive income streams. Without bounteous investment capital, you may not be able to sustain, or even begin, your passive income streams. Active income allows you to earn quickly and consistently, given that the turnover from service to earnings happens in a shorter period of time. Once you have built your investment capital fund, the next step on how to generate passive income is to channel your hard-earned salary into income-generating assets.
This is where mastering how to generate passive income comes in. From interest earnings to rental income, passive income streams are those which do not require much effort from your end – or at least that’s what everyone says. Here’s a major myth-buster we’d like to impart: passive income streams still require preliminary work from your end but the jackpot lies in the fact that these streams can generate income for years. Passive income streams require patience and discipline, as they usually take years to fully take off. Although once they do, you’re pretty much set for life.
Once you determine the 7 streams of income which work best for you, you arrive at a sweet financial spot where you are able to enjoy your well-deserved wealth. Ever heard of not putting all your eggs in one basket? This is a benefit of having 7 streams of income. For physicians like Dr. Pranay Parikh, an important facet on how to generate passive income is that it merits you the security to afford your ideal life, without having to double down on your clinic shifts or to worry about unforeseen circumstances and expenses. In an interview with PhysicianEstate, he shares, “I diversified my life and it made me a better doctor because I was able to draw from my skills elsewhere into medicine. Similarly, I wanted to diversify my income streams as well. As we are seeing now, medicine isn’t as financially secure as we thought. I thought as a patient who would I want to be treated by? The doctor that is financially secure and is practicing medicine on his terms or one that is burdened by a ton of debt and working extra hours/days due to necessity?”
For the purpose of this blog, we will zoom in on specific passive income streams which you can explore so that you get to diversify your options outside of your physician job.
If it has come as a surprise to you how much upfront work passive income streams entail, trust us when we say that it all pays off. Any / all passive income streams require you do some amount of active hard work upfront. More than anything, what makes passive income so attractive to physicians is the promise of financial freedom in the long run. Remember that learning how to generate passive income takes patience and discipline in order to reap all of its financial benefits down the road. As long as you are willing to put in the effort to find the right mix of income streams that work best for you, you could literally make money while you sleep, and, well, we’ve slept a lot better at night knowing that. We know you will, too.
Here at PhysicianEstate, we welcome all physician entrepreneurs to learn about commercial real estate investments, rental property investments, and wealth generation. We encourage all physicians to eventually become real estate physician investors. We know a great deal about Who – What – Why – How.
Stay in touch with us by signing up for our newsletter. The newsletter will keep you up to speed on the current real estate investments we are looking at, provide physicians with investment opportunities, and much more.
Don't forget to share this post! Sharing is caring.
Authored by Harsha Moole, M.D., MBBS
Hey there! I hope you enjoyed reading this blog. PhysicianEstate is my brain child and passion project. I run this platform to empower entrepreneurially motivated physicians to make financially educated investment decisions and discuss asset protection strategies. Lots of important but free content here and here! If you have any questions or if you are interested in partnering with me, let’s connect! hmoole@physicianestate.com
No Comments
Comment as guest
Share