How Not To Be A Turkey | #11

How Not To Be A Turkey

No. 11 — read time 4 minutes
Welcome to The Soloist, a weekly newsletter where I provide actionable ideas to help you become a healthy, wealthy, sovereign entrepreneur.

Yesterday, I asked my audience what harsh truth about passive income more people need to hear.

The answers were obvious.

Passive income takes time.

Passive income takes patience.

Passive income isn’t really passive.

All fine answers, nothing mind shattering.

My favorite, though, was from my friend Louie Bacaj:

Today, I want to share three examples of friends with high paying 9-5 jobs who are still diversifying their income. They are choosing to remain active operators in order to stay fit.

My goal is to shatter the myth that side hustles are only for junior people or those with low-paying jobs who have to side-hustle out of necessity (nothing wrong with that).

Still, too many of my friends in corporate jobs, especially those who complain about those jobs, don’t take any action whatsoever to diversify their income.

It’s 9-5, 401k, binge Netflix, repeat.

Like the well-fed, perfectly content, turkey in Nassim Taleb’s The Black Swan—totally fragile to an unexpected (to the Turkey at least) event. Thanksgiving.

Friend A

Our first example, Friend A, works in big tech. Good salary but he will never be rich off of it.

But he's been building side projects since he was in high school, and so while he was in grad school built himself a little tool that was useful for students. Other students found out about it and it went mini-viral.

He kept tinkering with it after graduating, even though he landed a good job and was busy with a wife and new kid, until eventually he was approached by overseas buyers interested in acquiring the platform.

Just like that, a side project that he was never truly able to figure out monetization for, generated real liquid returns.

Even better, the acquirers asked him to stick around and consult "just in case". So he got a lump sum cash offer plus recurring revenue to answer questions.

Had he deluded himself that he could ONLY focus on the new 9-5 job he would have let the side project go, stopped working on it, and it would turn into a "could have been".

Friend B

Friend B is a startup founder who has raised a couple of rounds of venture funding. He's past the gruel it out stage. Still, he's not the CEO and so he finds himself as "one of the other founders" with a role that is diminishing in responsibility as the company hires more specialists to run their departments.

With those extra brain cycles he's chosen to start actively investing in real estate. I connected him with a realtor friend of mine and he's now on his 3rd property in less than 24 months.

Many people in startup world would say this is a faux pas. As a founder you should be "all in" on your startup.

But what this founder recognized is that in order for him to stay active and robust, he must diversify.

He just chooses to do it in a different asset class with a different skill set than the one needed for his day job.

Friend C

Friend C works in finance on Wall Street.

Long hours. Endless work on excel spreadsheets, financial models, and getting just the right font size on those pitch decks.

Since part of his work is analyzing companies, he's decided to diversify his income as a business broker for small and medium sized businesses.

Through networking he's joined a private group chat where prospective businesses looking to sell are discussed, and then he finds people from his world (independent buyers or small-ish private equity firms) to acquire those businesses.

This is extra work he takes on himself but it is lucrative and worth the trouble.

More importantly, he is staying fit as an operator by exposing himself to real world applications of his skillset outside of the 9-5.

Is 9-5 Passive Income?

My unpopular opinion is that for many people in the big corporate world, their 9-5 is a form of passive income.

Last week, my wife and I went to a birthday dinner at an amazing Turkish restaurant with some friends in the Boston area. One of the guys, in his mid-40's, a software engineer had recently been let go from his job in big tech. He had a brief 3-week period of stress before landing on a new role.

As we started talking about life and business over Turkish coffee, he admitted that he always wanted to do something entrepreneurial but didn't have the stomach for it.

Even if he wanted to, his lifestyle had gotten too expensive to get off the hamster wheel. And besides, he'd mastered a whole new skillset—how to play the corporate political game.

He explained to me that he had figured out a way to quickly decipher the contents of an email at his job and how to reply in the perfect manner so as not to rock the boat. Just get by.

This is the reality at so many large companies.

Maybe my friend Louie had it right.

The 9-5 has turned many into the opposite of active operators.

The 9-5 has blunted the animal instinct needed to create value and survive in the modern era.

It's a form of passive income in which, as long as you show up, do the theater performance, and press some buttons, the income arrives every other week in your checking account.

Until, like the turkey, it doesn't.

Till next week,

-Tom

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