Passive Income Greater than Your Burn – This is How You Get Peace and Dignity
- Original Post from Investment Moats

Scott Galloway is out with his new book, and in a smashing podcast, he brings up a tale about his father and his close friend:





What is the definition of rich?


When your Passive Income is Greater than Your Burn.


Those of you who are ages younger than 40 to 50 years old, you should be focusing on “the Top line“.


You would want this figure to be bigger and bigger.


Scott has a close friend who is a partner at the investment bank. He manages 200 investment bankers. He makes roughly $5 to $7 mil a year.


After all the taxes for staying in Manhattan, he takes home like $3.5 mil.


He has to pay alimony and child support for previous marriage, a town house, and a house in the Hampton.


Out of the $3.5 mil, he spends… $3.5 mil.


He has increase his standard of living as he earns more.


Scott noticed specifically that his close friend has a problem sleeping. This is because what happens if there is a re-allocation of capital from mergers and acquisition and into passive investing.


That very possible reality is going to affect his “Top line” and he has a Burn Rate that equals that.


In contrast, Scott talks about his father and his wife.


His father’s pension from the army and Social security gives him $48,000 a year and his burn is $40,000 a year.


By Scott’s definition, his father is Rich.


Young people should focus on their income.


Adults focus on burn.


They should think about: How do I chart a path that I can get to in investments, whether it is rental real estate, income from dividends stocks, forced savings, so that I will have a realistic passive income that is greater than my burn.


Adults should think about moving to less expensive, and to tamper with their expectations of the lifestyle they lead.


There is a real peace and dignity on being rich.


And rich can occur on $48,000 a year.


I thought this short but too good not to share. And this is applicable because in terms of earnings and lifestyle, Singapore have a certain group of people that would fall in an equivalent category. They have done well in their career and have build up a great top line.


Their Burn however, can be in such a way that 15 years from now, they would ask “Why the fxxk did I choose to allocate my Top line that way!”



I wrote about Scott Galloway on his equations for Success and Happiness here. I am also a fan of his explanation on the power shifts in Amazon, Apple, Google and Facebook.


In this podcast interview with Jordan Harbinger, he promotes his bookThe Algebra of Happiness: Notes on the Pursuit of Success, Love, and Meaning. I think this will be a book that may be worth it to buy a hard copy just to pass it around.


Professor Scott Galloway explained a lot of how he sees things in this interview. It is just worth it to re-listen again to think about some of the things he says.


Perhaps what makes his fascinating was that throughout his life, he did a lot of things that a fundamentally sound person will not do. In a few parallel universe, he might end up being a wasted person in this world, and he is cognizant to realize that what he has now, depend on a lot of effort, but also a lot on luck.


By being born in America and not in some other countries.


You can listen to his views on:




  1. Our Caste System – Success is based upon a Caste System of which University and Network you subscribed to

  2. How what made it possible for him is not available to this generation now (which again, shows how lucky he is)

  3. On Hunger and on this thing called Passion

  4. On his very Viral Class Rule

  5. On his experience with the lack of money and lack of contacts, options resulted in him forming an opinion, and an unbalance chase for money and power

  6. On this obsessive entrepreneurship culture and the appeal of having a good job versus starting business


DoLike MeonFacebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content viaemail below.


Here are My Topical Resources on:




  1. Building Your Wealth Foundation– You know this baseline, your long term wealth should be pretty well managed


  2. Active Investing– For the active stock investors. My deeper thoughts from my stock investing experience


  3. Learning about REITs– My Free “Course” on REIT Investing for Beginners and Seasoned Investors

  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG

  5. Free Stock Portfolio Tracking Google Sheets that many love


  6. Retirement Planning, Financial Independence and Spending down money– My deep dive into how much you need to achieve these, and the different ways you can be financially free

Read more
12 likes
2 comments
Spinning_Top

Thanks for the sharing. Thats why we must be a fireman or firewoman as early to hose down the 'burn' with lots of water( passive income).

FIRE - Financial Independent Retire Early

kennychia

Thanks for sharing! Just bought the book earlier today on book depository haha

About Contact Privacy Terms Widgets Store

There are more for you ...

View more and participate in our discussion now. It's FREE.

Creating an account means you’re okay with InvestingNote's Terms and Conditions