Why Chasing Passive Income is Keeping You Broke

Every once in a while, when I tell someone I host a podcast called Mind of a Millionaire, their first assumption is that it must be about cryptocurrency, drop shipping, or some other scheme that promises fast, easy riches. I get why. The people who actually build wealth quietly go about their business. They’re too busy running companies, serving clients, and solving problems to spend their afternoons making TikToks about how they bought a rental property with zero money down. That leaves the “wealth education” space to the loudest and flashiest folks, usually the ones selling dreams instead of substance.

After nearly two decades as a financial advisor, I can tell you that passive income is rarely passive. It almost always turns into another job. A rental property isn’t just rent checks; it’s leaky toilets, late-night phone calls, and tenants who vanish in the middle of the night. Running a website isn’t just affiliate checks rolling in; it’s constant updates, customer complaints, and Google changing its rules every six months. Even stock trading, which seems simple on paper, is an endless treadmill of research, risk, and gut-checking your emotions.

The hard truth is this: real wealth doesn’t come from hacking your way to easy income streams. Real wealth comes from providing tremendous value.

Warren Buffett said it best: “The best investment you can make is in yourself.” That doesn’t mean buying the latest self-help book or attending another weekend seminar. It means getting really, really good at something. It means developing a skill set so valuable that other people willingly trade their hard-earned money for your expertise. That’s where wealth begins.

Think about the wealthiest people you know personally. Odds are they didn’t stumble onto some magical stream of passive income. They became doctors, attorneys, business owners, advisors, contractors, or entrepreneurs. They took a skill set, refined it, and built their career around it. They didn’t get wealthy by chasing shortcuts. They got wealthy by becoming excellent at something that mattered to other people.

We live in an economy that massively rewards value creation. The more people you can help, the more wealth you can build. A plumber who unclogs drains makes good money. A plumber who builds a company that unclogs thousands of drains makes more. A plumber who designs a better tool for unclogging drains and sells it nationwide could become a millionaire. The same skill—applied at scale—creates exponentially more value, and therefore, more wealth.

Here’s the part people don’t like to hear: there is no reliable way to skip the “work extremely hard and provide a ton of value” phase. It’s tempting to believe you can buy a rental property or throw money into crypto and wake up rich. But that’s not how lasting wealth is created. The best way to become wealthy in America is to spend years developing your skills, grinding through challenges, and consistently finding ways to help others.

When you get this part right, the rest becomes easier. Once you have a large income from your expertise, then you can reinvest into assets that generate income—whether that’s stocks, real estate, or business ventures. At that point, passive income makes sense because it’s built on top of a solid foundation. But if you try to skip straight to passive income without first building active income, you’re stacking a house of cards.

Even the cleanest version of passive income, like dividends, still requires judgment. Companies go bankrupt. Industries collapse. Nothing in the financial world is truly set-it-and-forget-it. At some point, you’ll have to make decisions, and if you don’t understand the fundamentals, you’ll be lost.

So my conclusion is simple. If you’re chasing passive income because you think it’s a shortcut to wealth, you’re keeping yourself broke. Wealth doesn’t come from schemes. Wealth comes from working hard, becoming excellent at something, and creating tremendous value for others. Do that long enough, and income will come. Once it does, then you can put your dollars to work.

Stop looking for the shortcut. Start looking for ways to serve. That’s the real path to financial independence. 

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Denver Wealth Management, Inc., a registered investment advisor. Denver Wealth Management, Inc. is a separate entity from LPL Financial.

The views expressed in this commentary are subject to change based on market and other conditions. The commentary may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.