In the first episode of his podcast "The Make Money Podcast," Jason Alan Scott tackles a common personal finance myth - that you shouldn't sell your time for money and instead pursue passive income streams. He explains why this thinking is flawed and argues that selling your time can be a great wealth-building strategy.

What is Passive Income Anyway?

Scott starts by clarifying what passive income really means - it's money earned with little to no active effort, often from sources other than your job or side hustle. Examples include rental income, investing returns, affiliate marketing commissions, and royalties from creative works.

However, he argues that truly passive income is largely a myth - even the most hands-off revenue streams require some regular time and attention. For instance, being a landlord seems passive but involves maintenance, repairs, tenant screening, etc.

Why You Should Sell Your Time (for the Right Price)

The main thesis of Scott's podcast is that selling your time for money is not inherently bad, despite what some personal finance gurus claim. In fact, it can be one of the best ways to build wealth for most people.

He uses doctors and lawyers as examples - they sell their time for very high hourly rates, often earning more than business owners with multiple passive income streams. The key is making sure you get properly compensated for your specialized skills and time.

Scott argues that rather than chasing speculative passive income ideas, you're better off investing in yourself to increase your earning potential first. Things like courses, credentials, qualifications that make your time more valuable. This also sets you up to later invest in assets that can generate more passive cash flow.

Busting the Warren Buffett Myth

No discussion of passive income is complete without the infamous Warren Buffett quote: "If you don't find a way to make money while you sleep, you will work until you die."

But Scott questions whether Buffett actually said this or if it's another case of misattribution. Regardless, he argues it's not actually contradictory advice - Buffett himself made his fortune selling his time and skills for high rates before shifting to more passive investments later on.

The Takeaway

At the end of the day, Scott believes personal finance advice needs more nuance and context around individual situations. Selling your specialized skills and knowledge for top dollar is not inherently worse than pursuing passive income sources. Mastering the former can provide fuel for investing in the latter down the road. So before you quit your job to flip houses or become an Instagram influencer, make sure you're properly valued and compensated for abilities you've worked hard to develop.

Join Jason every week, apply the lessons, and earn the knowledge that will earn you money.

This podcast does not constitute financial advice and is for entertainment purposes only.

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