Why Entrepreneurs Making $1M+ Still Have No Passive Income

Russ Morgan (0:00)

Last month, this business paid our family over $50,000.

This one did not. And I think this is the biggest financial mistake entrepreneurs are making today. They spend their entire lives building their operating companies, and they never build their investment business, which is the one that actually gives them freedom. Today, I'm gonna show you exactly how we build our investment business, what it took, what it cost to get started, what it felt like the day it finally covered the lifestyle expenses.

SPEAKER_2 (0:36)

Welcome to The Wealth Without Wall Street Podcast, your guide to understanding how to get out of the Wall Street rat race and start your own mailbox money lifestyle.

Now, don't let these handsome southern draws fool you. These financial minds are teaching our country to enhance savings, increase cash flow and create passive income, all without the help of Wall Street. Are you ready to break through? Now, here are your hosts, Russ Morgan and Joey Muret.

Russ Morgan (1:07)

Before I go any further, let me tell you a little bit about why you should listen to us. My name is Russ Morgan. I co-founded Wealth Without Wall Street with my business partner, Joey Muret. We've been in the financial education space for over 20 years. And every single month, publicly, on this podcast on YouTube, we report our passive income numbers to our audience. It's not a projected, it's not a model, it's an actual number that we can point to and show you exactly what is working for us. And the number I'm going to show you is over $50,000 is what we brought in last month alone. And this $50,000 did not come from this channel. It didn't come from speaking fees, nor did it come from my operating company. It actually came from a system that we've been building over the last 15 years. A system I'm going to draw out for you on the board today, step-by-step with real numbers. Here's the problem most entrepreneurs will never say out loud.

They're making more money than they ever have, and yet they're no closer to Financial Freedom.

Joey Muret (2:06)

Why is that?

Because they've only built one business, their operating business. This one, it's the one that you've grounded in, it's the one that you live off of, but yet it's the one that's now become a trap.

Russ Morgan (2:20)

Because when your lifestyle depends entirely on your operating business, you can never stop. You can't take a month off, you can't get sick, you can't have a bad quarter because the moment your business slows down, your whole life slows down with it. Now, here's what makes this even more frustrating. Entrepreneurs are not broke.

They produce lots of surplus. The revenue comes in, expenses go out, there's money left over.

But that surplus, it ends in one of three places.

Number one, the business checking account.

Earning zero, it's like a pond with no outlet. It's stagnant, it's evaporating, it's doing nothing. Number two, retirement accounts. This money is locked up until you're almost 60 years old. It's inaccessible. And if a deal shows up tomorrow, that money cannot move. Or number three, lifestyle. If you get it there, you know it gets spent. Not because you're irresponsible, but because your operating business is the thing producing income. So that surplus feels like it's supposed to go there.

None of the three build investment businesses. None of these are creating freedom. And that is the reason why the biggest obstacle to becoming financially free is not income. Entrepreneurs don't have an income problem. They have a system problem. A deal shows up and the money is locked up or sitting somewhere they can't touch it and they can't deploy it. And the deal goes away. In the investment business, it never gets built. Here's what life looks like when both of these businesses are running.

Let me show you what happens on the other side. Imagine you wake up on a Tuesday. Your operating business just had a bad month. Maybe a big client pause or a deal fell through. But yet you still feel fine. You're not panicked. You're not desperate. You're not scrambling anymore. You're fine because your mortgage is covered. The school tuition is covered. The cost of living is covered.

Joey Muret (4:11)

Not by your operating business, but by this one, your investment business.

Russ Morgan (4:16)

You make better business decisions. You make smarter risks. You build the operating business from a position of strength instead of desperation. You stop burning out. That is what it feels like when your investment business makes it all possible. How do you build it? There's three things that made it possible for us.