Asset Allocation Between Active and Passive Income
1) Some professions help people earn higher income while some professions have much less income generating capacity. Professions that easily scale up have high wealth potential and Professions that cannot scale up have relatively low wealth creation potential
2) So does that mean people choose professions because of money
3) Take the case of Doctors and Teachers
4) Both have the highest image and identity but relatively have low potential in wealth generating capacity
5) The same holds true for Practicing Professionals like Architects, CAs, Advisors etc.
6) While in the above Professions there is very high certainty of earning reasonable income but low potential of making lots of money
7) While in some other Businesses like a Shop Keeper or for that matter even a Paaan walla like Muchchad one can mint money even though their “Respect/ Image” Quotient may be much lesser
8) A Real Estate Broker likewise can make a lot of Money but will not earn the Respect and Image of a Teacher or a Doctor
9) Does that mean one should aspire only to be Paanwallas, Shop Keepers and Brokers etc. because of the Wealth Generating Abilities of these businesses? Not at all!
10) If Money is the sole reason to work then the Society would fall apart
11) The Wealth of Respect and Image is Massive in some Professions like Doctors and Teachers and provide immense happiness and satisfaction (Wealth of Honor)
12) These are Purpose driven Professions and if one happens to select them then it should not be with primary intention to make money
13) The main intention of every Doctor should be to cure people of diseases and to find better methods and processes to treat people. The main intention of a Teacher is to build a successful society by teaching people how to earn and live well with one another
14) But the moment the intention is adultered by money making thoughts, the Profession loses its sanctity
15) Backdoors open to make additional income by way of earning kickbacks for diagnostic labs etc
16) So does it mean that people who are in these professions should not make money, should live a deprived life, should have less money security etc
17) Certainly not!!!!!
18) Everyone deserves to create Wealth and Live a Life of Abundance
19) But that does not mean the Wealth needs to come from the Active Profession
20) It does not mean the Teacher has to create Wealth from teaching and a doctor from Treating & Caring
21) The Active Profession earns them a lot of Respect & Image Equity which itself is a kind of Invaluable Wealth
22) So what is the Solution to enhance living standards of such low income potential Professions?
23) Every Individual belonging to every Profession needs to live an Abundant Life and hence has to compulsorily have a source of Passive Income
24) And Passive Income is generated by inculcating the Habit of Investing from a very early age,
25) The Investment should ideally begin from the time you become an Adult or latest from the time you start earning
25) To create a source of Passive Income and one needs to give the investment sufficient time to become a meaningful income generator
26) If one follows the Practice of Early Investing, then it is possible to create a very healthy stream of regular passive income that can beautifully complement Active Income
27) The Active Income comes from the Core Profesion of Healing Society and may bring less money but more respect while the Passive Income gets generated from diversified investing in multiple Businesses that produces more Money and relatively less Image (Asset Rebalancing between Money and Image)
28) Therefore one needs to Design Life using the Principles of Diversification by Designing an Optimal Mix of Active Wealth, Passive Wealth, Spiritual Wealth, Social Wealth (Respect for the Profession)
29) Asset Allocation and Rebalancing between Active and Passive Wealth provides the equilibrium of life and living. A Weak Active Income Profession can easily be supported by a very strong Passive Income Stream
30) Therefore if one mindfully manages his or her money by taking professional guidance, there will never ever arise the need to make any compromises in quality and standard of life
31) Disassociating your Wealth from your Income is the Paradigm shift that we need to Practice
32) Managing Money contributes more to Wealth Creation than Making Money
33) If a Medical Student invests a small proportion of his Medical Investment, that would create a perfect source of complimentary income by the time he or she turns 40
34) So even if let’s say the Doctor makes Rs 1.5 lac by way of his Practice, his Passive income will easily contribute and additional 1 lac every month
35) At Rs 1.5 lac, he or she may have felt shortfall in income forcing him to her to make small compromises in living standards
36) But the Addition of Rs 1lac to Active Income making the Total Monthly Income Rs 2.5 lac will ensure that his or her lifestyle is as good as it can get
37) He or She would then never feel the need to earn money from the backdoor using unfair means of earning kickbacks from diagnostic labs
38) While we have used the Medical Profession to describe how Passive Income can enhance the quality of life of a Doctor, this also applies to every Profession; be it CA, Architect, Company Executive, Financial Advisor or anybody
39) This Wealth Practice will induce happiness in the Social Ecosystem by massively reducing Corruption
40) This Wealth Practice will enhance our Social Wealth by eliminating unwanted Envy and Jealousy from the Social Fabric
41) Thus Money Management plays a significant role in creating Money Wealth, Social Wealth, Philosophical Wealth, Spiritual Wealth which ultimately leads to a Life Rich in the Wealth of Good Health
I rest my case
