Passive Income-- Breaking Ground On, or Breaking Up With, Your Next Big Idea

Its easy to fall in love with an idea, but as but any serial entrepreneur will tell you, its all about the execution.

I had correspondence with a doctor from the Midwest this morning, who was asking for a few ideas to kick start his goal, to make income off of low maintenance business ideas. My response read like a blog post, so here goes.

An excerpt from the email I received:

"...Anyway, I came across your blog after looking up stuff about lifestyle design, which I became more interested in during my medical training while working 60-80 hours/week. I have been on a break for a few weeks between finishing my training and starting my practice, but still will probably end up working in the 50-60+ hours/week range as a practicing physician. All of this has recently inspired me to start a blog of my own and to make contact with some people that seem to have a good plan in terms of lifestyle design, and to learn what I can.

I was looking at your post 'Anatomy of a Perfect Week', and without being too nosy, I wanted to ask you what kind projects you work on in terms of 'passive income'? How much time per week do you think you currently spend on them, and how long did you spend setting them up?

Other than the books you mentioned in your most recent post (4 Hour Work Week--which I've read, and One Simple Idea--which I'll add to my eventually to read list), do you have anything else you have found to be a good guide (books, blogs, people, etc.)...."

My Response:

Greetings ,

Thank you for taking the time to reach out. I appreciate that you took the time to read my blog and am encouraged that you are looking for ways to work smarter and increase your passive income.

I have toyed with a lot of investing/cash flow business models over the years and I have found the most simple approach is two pronged. Ideas typically come cheap and easy, its really the execution that is key. Most people have an idea, which could even be a great idea, but without a hand-in-glove plan to implement it, they will never see a dollar from it.

I have extensive knowledge of the ins and outs of New York Real Estate, which is a muddy, convoluted system that intimidates people and costs them a lot of unnecessary money. While there are many who would like to rework the entire system, the issue is that a few massive landlords control much of the rental real estate, and thereby can skew business practices in their own favor. Most of my products, consulting DVD's, websites and the like, stem from this narrowly held body of knowledge that I have acquired over years of being an insider in the industry. I prefer to keep these sites and products separate from my personal blog, so that I can control my message--- my music, musings and life lessons are the priority on AnonymousExploits.com

Essentially it boils down to what you know. Once you have a product, which in your case could be medically related, like a book, a DVD, a widget, or perhaps a supplementation, exercise or diet program, that you know everything about, and people want to learn about, it's easy to implement a low friction framework to distribute that paid content via the internet or as a "muse" type business as outlined in Tim's book.

For other types of ideas, which are either too complicated, you don't have expertise in, hard to compete with, or simply improvements on a current product or service, this is where Stephen's book will come in handy.

Let another, more established company run with it and send you a check.

I basically go through these steps when evaluating a product or service:

Does it solve a problem that needs a solution?

Would I buy it? More importantly, is there a verifiable (see testing methods in 4HWW) market?

Does it fit into a pricing structure that makes sense, can I make my margins?

Is it shippable, outsource-able, and (most importantly) scalable?

Will it take up a lot of my time and energy?

Is there repeat business/cross selling opportunity?

Obviously, this isn't all that I look at when evaluating a venture, but if you can get positive outcomes from looking at all of this beforehand, then you can dive in headfirst. I think of ideas all day long. I just don't implement most of them. I can spend a couple of months to a year setting up a venture, but I plan for it to generate income for at least 5-10 years. By setting up, I mean getting it to the point where all the kinks are worked out with the structure and I can focus on marketing or just sit back and collect revenue. All of the excess cash I generate gets invested in other ventures, or put into low risk dividend heavy portfolios, with index funds and a few promising small caps. I choose not to invest in real estate myself, because despite the fact that I know quite a bit about it, it does not fit into the uber low maintenance lifestyle that I fight to maintain. The point is not to be lazy, I work very hard, but the less fires I have to put out, the better. I am writing posts on various ways to invest, more to come.

I hope this helps get your creative juices flowing. It gets easier with practice. Just remember, execution is key. The Winkelvii might have had the idea that eventually became Facebook, but without proper execution, it would never have become what it is today.

I could mention a number of other blogs and books, but I wouldn't want you to fall into paralysis by analysis. Get started. If implemented properly, your plan shouldn't cost much, and you can correct course along the way. As long as you pay attention to materials we already discussed, you are well on your way. Plus, Paul McCartney once told me that I shouldn't drop names. ***

*** (Joking, though I'm sure he's lovely)