How To Disappear From Your Job For A Year, And Continue To Earn Money

In: Education|Productivity By: Brian Armstrong

25 Jul 2007

I like to think a lot about passive income. That’s the ultimate dream right? To just travel the world, focus on whatever you feel like, and pick up a check each month from your investments or business.

Robert Kiyosaki makes a great point about this in Cash Flow Quadrant (aff), as have many other authors, that just because you’re self-employed it doesn’t mean you are financially free. Many entrepreneurs end up buying themselves a job – sure they don’t have a boss, but they are still putting in 10-12 hours per day. (Typical examples include shop owners, or businesses where you are the primary talent, like consultants, etc).

But, I’m starting to realize that it’s not a clear answer most of the time whether income is passive or not. It typically exists along a spectrum, and I like to find out where it is on the spectrum by asking this question: If you were to disappear to Tahiti, how long would you continue to earn money?

Here are some examples along the spectrum…

A blue collar job – only paid when you clock in, you don’t get paid for even 1 minute you aren’t there.
A white collar job – you could sneak in late or take a long lunch (a few hours), but you also get time off for sick leave, and vacation…so a few weeks in some cases
Mom & Pop shop owner – You’ve got to be there each day to open and to close, so typically no more than a day or two if you can get someone to cover for you.
Mom & Pop shop owner with management (or kids) – once they get management, they make a lot less money, but could potentially disappear for a few weeks to a month. The problem is that if you leave for much longer than that, the business will start to deteriorate. Theft, dirt & grime, laziness of employees, etc start to creep in. Only what’s measured gets done.
Self-employed business owner – this is like my tutoring business…it would continue to earn money for a month or so if I disappeared, but income would steadily decline as I wasn’t bringing in new clients, sending paychecks, etc.
Owning real estate that you manage yourself – Could last six months probably without you doing anything, but it may not be prudent to do so. Tenants would call with repairs, could miss rent, etc. Some upkeep is required.
Owning real estate with a management company – Could disappear for a year or so and the checks would continue to come in. You may need to be called once in a while for massive repairs, lawsuits, or insurance claims (fairly rare events).
Passive investor – As a passive investor (think large appartment buildings, shopping centers, hedgefunds, REITS, stocks, LLC’s, LLP’s, etc) you could literally disappear for several years, having never seen the business, and you wouldn’t need to feel guilty. It’s someone else’s job to manage the project day to day.
Handing all your money to a financial planner – again, several years.

This is part of the reason I’m transitioning more and more into real estate right now (it has other factors like rate of return and tax benefits that I think make it better than stocks or typical financial planner type investments too).

Some of the mentors I’m working with own apartment complexes that they literally haven’t been to in years. They don’t have a key to the place. They wouldn’t even know how to get on the property if they had to. Their phone number isn’t listed on any registry of people to call. And that’s exactly how they want it!

How long could you disappear from you current (or ideal) job, and continue to earn money?

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14 Responses

July 25th, 2007 at 2:16 pm

I’ve done all sorts of business ventures over the years, and none have been as financially and personally rewarding as real estate. I know one investor who planned to purchase a townhouse or condo after the birth of each of his children to eventually finance that child’s college education. I plan to use mine for retirement income. You just can’t beat passive income.

Terra Andersen

July 25th, 2007 at 8:09 pm

Passive income is great. I just recently discovered the joy of passive income. Real Estate and Internet Ventures are two of the best sources for this.

Brian Armstrong

July 26th, 2007 at 12:07 pm

Hi Terra, thats a good point, many people have set up passive income businesses on the internet. This website for example sells books, although if I disappeared for a year it might not do too well. Luckily I like putting down my thoughts, so it’s not really work for me ;)

I think for most people who start web businesses, there ends up being quite a bit of overhead though. John Reese is a good expert to listen to to learn more about that area.

Dave

September 14th, 2007 at 12:21 am

The real question is how to I slip away from my real job? To spend more time growing my part-time business thats doing well, although it is suffering because I can’t put more time into growing it. My small business is a global company and I have customers 24 hours a day.

Dave

Brian Armstrong

September 14th, 2007 at 4:55 pm

Hi Dave,

How close is your small business to matching your “real job” salary? Do you have savings to live off while bringing it up to that level? I think you are on the right track….outsourcing customer support using websites like guru.com might be another good temporary solution. Keep us updated!
Brian

Travis Collatz

January 31st, 2008 at 12:18 am

Wow i really liked this post I am currently taking the Rich dad Real Estate Classes and Loving every minute I have A mentor and am looking for my first deal.

I love this post, Keep up the Great work.

Travis.

Tomaz

February 7th, 2008 at 4:19 pm

I could probably dissapear forever any my websites would continue to earn money all the time.

The age of domain is a big factor in search engine rankings. So doing nothing doesn’t hurt a static (it’s aging!) website but it does hurt a blog.

And if your site ranks well, it will slowly gain natural links to it.

So my personal belief is that an online business is far more passive and reliable than a real estate one or anything like that.

It’s a perfect business. We are so lucky to be born in the age of the Internet…

Of course, only if we take advantage of that.

Joe Carpenter

July 26th, 2008 at 1:13 am

EVALUATING A HOME BASED BUSINESS

What are you looking for?

It often amazes me how people make decisions when it comes to evaluating a real home based business. After years of coaching and mentoring people I’ve heard it all when it comes to people looking at a business.

It really comes down to the fact that there are two types of people. Those that focus on opportunities and those who only see the obstacles. Successful people focus on the opportunities a home based business can bring, unsuccessful people only see the obstacles.

Let me give you a couple of examples. First, no matter what the home based business is, a person who has an intent to make a profit and works the business to some extent, will benefit from the tax advantages alone that owning a business offers. This is one of the great tax strategies an individual can employ to legally reduce their tax liability. I successful person understands this and keeps more of their hard earned money. An unsuccessful person only focuses on how much it will “cost” to get the business started. Let me ask you a question. If you could put $500 to starting a home based business and save between $3-$5k per year in taxes, would that be a wise move for you? Again, what are you focusing on?

Another obstacle that most unsuccessful people focus on is the initial start-up fee itself. This one really amazes me. First of all, most home based businesses can be started for under $1,000. If you only see the $500 start-up or whatever the start up is and aren’t focused on the money you can earn, that says one of two things. Either you have no confidence in your ability to produce results or you really should be looking for a job, not a business. Here’s the bottom line. Most people spend more money on the TV’s or even their vacuum cleaner than it costs to start a home based business and neither of those earn you money. So what’s the real issue? Is it the money to get started or your fear of failure? Just something to think about.

Here’s what I suggest to those that are looking for a successful home based business. Stop over analyzing everything so much. It’s pretty simple stuff. You have an opportunity to make money and save money on your taxes. If you are willing to put some work into it and you are coachable you will make some money. If you don’t, you won’t. We act like we are purchasing a million dollar home and it’s far less than that. Do your research to make sure the opportunity is real, then get started. Stop with the analysis by paralysis that probably has you in the situation financially that you are in. Find a company and an opportunity that you can believe in and go for it!

Remember, no one has ever won from the sidelines. If you were so great at spotting opportunities, you would have invested in Microsoft, Google, ebay, Dell, shorting the mortgage industry, etc. Find someone who has the results you are looking for and duplicate what they have done. Good luck to you!!

Tim

May 19th, 2010 at 2:00 pm

Real estate? Investments?
It’s quite funny to read it these days.

Brian Armstrong

May 23rd, 2010 at 6:19 am

All depends on the areas Tim. Investment properties in Texas are still cash flowing!

Bradley Eynon

June 23rd, 2010 at 1:37 pm

@Joe Carpenter – Absolutely my man, 100% agree with your comments on peoples views and attitudes on starting a home based business. I too am in the coaching arena and without doubt can confirm that it takes the right type of person to succeed with an online business. The internet has made it incredibly easy for everyday people to start up a business which is fantastic.. the problem is that so many people think that they ca make money without doing anything.

As for the post on passive income, @Tomaz made a great point about static websites not being effected and the fact that blogs will require updating regularly.

My primary business is as automated as it possibly can be but it’s successful due to the realtionship building and interaction I have with my team, so I wouldnt want to leave it more than a month without any intervention.

I agree that real estate is where its at. My goal is to invest as much as possible over the next 5 years.

Raymond

June 28th, 2010 at 11:52 am

Hi, don’t know if you can answere this question or not.
I’ve read all of Roberst richdad series and a couple of more books that he release (more of the same really)

And theres ONE question that I never got the answere to. I’ve tried to contact robert via his facebooksite, but no respons…

I guess the rules in america must be different than rules here in norway when it comes to loan and stuff.

Like Robert, says he just loans and invest in real estate and the tenant pays for the loan rent, right?

In norway, to get a loan we have to have documented income, like if I get a houseloan for about 155 000$ i can maybe rent that out for 900-1000$ a month. With todays rent I gotta pay around 700-950$ a month to the bank.

Thats Ok, I will get a positive cashflow right off the paper (but If I count in everyting else, like insurance, montly fees and so on I may not).

Heres the REAL question. What do i do next? It will take me 30 years for this apartment to get payed down. And In norway we cant take up several loand because the loan in the example above have safety in my job payment and in the apartment. If I want another loan for anotther apartment I have to have my first apartment totally payd down, or at least payed down and have some cash by the side…

How is this possible??

Breaking Free

How To Disappear From Your Job For A Year, And Continue To Earn Money

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