Reviewer: Denise RQ The average person in the UK has only an 11-week income
saved in the bank. How much do you have saved? How long could you live for
if your paycheck stopped coming in? Maybe you've never thought of that, and it might be a little bit
scary to think about. Today, I'm going to share with you
about passive income, and how to design your dream life through building up
your passive income streams. Designing your dream life
through passive income - that's a big claim. Wish me luck! Why is passive income important to us? And what is it? In October 2012, I knew absolutely
nothing about passive income. I was here, it's like you've said,
I was at B Block, Derwent uni, and I knew nothing about passive income. I knew how to make income. I knew that you go
and swap your time for money, that's called active income
or earned income. It's what you do when you get a job,
and that's what 99% of us in the world do. The opposite of that
is passive income, or recurring income. It's where you do the work once, and you continue to get paid recurrently
for very little or no actual work. When your passive income,
the recurring income, exceeds your cost of living - what you spend on food, utilities,
petrol, all that kind of stuff - when your passive income
exceeds your cost of living, then you were financially free. If you happen to lose a job
or not get a paycheck, you can live infinitely forever. Now, why is that important?
So this is a question, get ready for it. Let's have some audience participation. Can you think of reasons
why your paycheck would stop coming in? You break a leg. Perfect! So you're sick, or you're incapacitated,
you can't swap your time for money. Thank you. Anybody else? You get fired? Fantastic, perfect!
Has anyone been fired in the room? (Laughter) Perfect! Anybody else got any other ones? Yeah. Awesome, that's a really good point. So your industry changes; that could be a global financial crisis,
or it could be modernization. Things like that Lehman Brothers collapse, or the mining industry, or steel; structural changes that can affect us. That might have nothing to do with
your competency at your job. You might also be
taken over by a new firm. There's a merger, and there are
two of you at the same job. And you're made redundant. Or maybe you just fall out of your boss,
and he asked you to trot along your way. It may not actually be
due to your competency whatsoever. That's not a great position
to be in, is it? If your financial security is effectively
based on circumstance, or things that might
be out of your control. So when I was at uni, I just finished my second year,
I got a first, which was great, in PPE. And I tried... I took a few years to get to uni. I tried banking -
I tried Citigroup in Canary Wharf; I tried accountancy,
I tried law, I tried sales, IT sales, PR; then I've tried Proctor & Gamble. I had this long list of proper jobs of what I thought respectable people
go and do these things. I tried working with children. And I enjoyed it,
I didn't dislike the jobs. I liked the people I was working with, so if you're watching,
please, don't think I didn't. But it didn't light me up. I couldn't see myself
spending the next 45 to 50 years; so what is the retirement age now? Is it 65 or 67? What happens when we get to that age now? 75, 80, 100? Who knows! I couldn't spend the next 50 years
of my life doing this thing. I remember Procter & Gamble; they said to me on my final day,
in Hornbeam Park, Harrogate. They said, "We want to offer you
a job when you finish uni, but we're not quite sure
if it's right for you." And I thought, "Well ...,"
you know, I didn't know how to take that. They said, "Just pop out the room. We'll bring in the other boss,
and we'll have a chat." When I came back in there I was smiling. They were like,
"What are you doing smiling? You know, we sort of saying we don't
really want to offer you the job." I said, "No one has ever said that to me." I thought it in my head. I thought I can't do this, but I didn't
know there was an alternative. It took someone else to say it to me, to say, "Do you know what?
They're right. I can't do this." So, as scary as that was, it's like I'd shut that door,
and now it was like, "Well, let's start something from fresh;
what can I do?" So I went home that night
and started googling, as any self-respecting person does
when they're faced with a life crisis: they jump on Google. I started discovering terms
like, 'how can you be your own boss, ' 'passive income', 'wealth creation, '
and words I've never come across before. I started to read, and I've read
about real life case studies, not billionaires or these
incredibly talented people but normal people
who had picked a strategy, there are lots of ways
of bringing in passive income. I chose property, but there are a lot. They said about taking work,
that's taking action. Is it get-rich-quick overnight? No. If anybody tells you it is, the only way of doing
that is the lottery, right? But it can be get rich fast whatever that is for you:
months, years, it doesn't take long. Continual sustained action
can get you the results you want. So I read loads of books;
I thought, "Great." They asked me, "A master like in uni?"
I was like, "I'm reading other stuff." I went along to these... I chose property, it resonates with me, but as I said, you don't have
to pick property. I went along to these events
where I met normal people. I remember a guy called Trevor -
a normal guy came across property, boom! He had 30 or 60 other houses,
whatever it was, and I was like, "Well,
if he can do it, I can do it, too." So I spent my student loan,
and I took out a credit card. I invested in myself to learn
what to do; I invested myself. To cut a long story short,
I started with no money. I had no knowledge
or education in this kind of stuff. Two years later, I had paid off every investor
I borrowed from, own 24 houses, with the portfolio worth 3.5 million quid, and I won a few national awards. That doesn't mean I'm special at all. I think the biggest thing
I want to get across is anyone can do it; it's a strategy. If someone happens to get a degree, it doesn't mean
they're an absolute legend. They've just done what they've been told. They've rocked up to the classes,
done the homework and got the result, whether it happens to be the first
or 21 or 22, you get a degree. And it's the same
with wealth creation stuff. Some people are blessed
with natural ability, and that might get them there
a little bit quicker. But anyone can achieve the same results. The reason I wanted
to get into this stuff was because I didn't like through
I was heading down. Unfortunately, for people in the UK, 60 to 70% of people don't like their job; 60 to 70% of people don't like their job. And of that, a third
of them hate their job. So out of 100 people,
whatever it is in this room, 25 people hate their job;
but you don't have a choice. If you don't know anything different, you have to go
and swap your time for money. You've got bills, you've got a mortgage,
you've got to look after the children, you don't have an option. Often, we work so hard in the day,
that we're knocked at the end of the day, or we don't have the headspace
to start thinking about other things. I didn't want to be in that position. The further you are down the line... For you, students out there: this is the perfect time
to take action - now. You've got the time
to really check this stuff out because I found
that the older people get, they tend to maybe have
a few more limiting beliefs or barriers. Everyone has the same ability. In fact, older people have more ability,
because they have more life experience, but there might be
other commitments there that block them
in their brain from doing it. That's the hardest thing need to overcome,
is your limiting beliefs in your head. Passive income from property is one way,
but you can choose network marketing, like Forever Living or Utility Warehouse -
that kind of stuff. You start to sell, you then build up
a team of people selling for you, and eventually, they're all
making money for you; you're not doing any work, You've got affiliate marketing
where you drive traffic to websites and you make commission off
all the purchases. What else have we got? Owning a business: so you're not working in a business,
you're not self-employed. If you are, you're not
really a business owner, because you're still swapping
your time for money like a plumber unless they've got a firm,
where they oversee it, and people are running out
doing the work for them. You're still swapping your time for money. You've got Amazon
where you can set up a business where you buy products in China
and sell them over here. Obviously, make commission on that;
property is another one there. There are loads of different ways
of you generating passive income. The other thing I want to say is those of you
who've got money in the bank, or those of you not in the room
who are watching further down the journey, often, we're so busy focused
on earning the money, we're not focused on what to do with it. Albert Einstein calls the compounding effect
the eighth wonder of the world. A little bit of action, if you're young, a little bit of sensible investment
or making that money work a lot, had a few adds up to something
really special over time. That doesn't need to be risky,
or it's going to end in tears. If you're smart, you can make that money
work really, really hard for you. That's not just coming
and investing with me, or... No, there are loads
of ways of doing that. In terms of the how-tos, I'm not going to talk today massively
about all the ways you can do it. I'll put my blog up, sign up to that, and I can send you more about
the how-tos and what's right for you based on your income,
or where you're at, or the time you have. But the main thing
I want to get across to you is what happens if you don't focus on
building up passive income. Your predictable future
is where you are right now. If you're a student then you're probably
eying up a job in the future, or if you got a job at the moment -
that's not going to change. That's not a problem at all,
not a problem at all. But you may want something different.
Do you want to be working for ...? If you love your job, that's awesome.
Keep doing what you do. That's fantastic! You love it. And you're very much
in the minority of doing it. But have the security,
the peace of mind, and the freedom that if your desires change,
or if your circumstances change, then you don't have to do
that job anymore. If it is not there,
you don't have to worry. So if you are sick, ill, if you get fired, if your job changes,
or your industry collapses; there's not a problem. Or if you want
to look after a sick relative. What happens if you do
get your passive income? Now, probably some of you in the room
are thinking a fancy car, a big house, all the material...
A fancy logo on your shirt. And that stuff is cool, right?
It's fun, and it's great. For some people,
that means more than others. I think the biggest thing for me is to ask what would you do
with your life if money was no object? If you didn't have
to swap your time for money, what would you do? Would you travel? Would you go and learn to surf
in Hawaii or do yoga in India? Or go and help an orphanage in Cambodia? What would you do?
What are you passionate about? That's maybe not something
we ask ourselves a lot because we don't see
a way to achieve that. For me, my passion is all those things: traveling, helping others,
doing stuff like this. My dream is that all people
will be able to follow their heart; whether that's a musician,
or an author, or an artist, you can follow what you love
irrespective of the paycheck. You've got the financial stuff sorted
by picking one of these strategies, and doing a few hours a week,
compound effect of that. You don't have to worry
if you're financially successful. You can follow your heart.
For me, that's really, really exciting. Stephen Covey has got a great quote,
which is, "Before you climb the ladder make sure it's leaning up
against the right building." It's really interesting. When I was in uni and at school, I had the proper London jobs lined up, or heading down that route. But, and like I said before,
the further up the ladder you get, maybe the more reluctant
you are to step off that. So if you haven't started it,
if you are a student, now it's the perfect time for you
to think what it is you want to do. If you are further down the journey,
now is the best time to think about that; it's not going to be in five or ten years,
you've got to think about that stuff now. To summarize today's talk,
we've discussed what passive income is. So, it's not swapping your time for money, is doing the work
and getting paid forever from it. We discussed why we need it:
to safeguard you in terms of safeguarding you
from the negative stuff, but also giving you the ability
to design a life that you dream of and to choose what you want
to do with your life. For a lot of us, that's not something
we've ever really thought about. It may seem risky,
you may have limiting beliefs. I certainly did. I was 23, I had no money,
I had no experience, I was at uni, I didn't want a job,
I didn't know what on earth to do. But with a little bit
of education and action, you can do whatever you want to do,
whatever your limiting belief is - maybe you are too old,
or too young, whatever - put that to one side,
and just seeing the possibility. What could be possible for you if you actually took consistent action
and built up this passive income? Don't worry about the how,
just think about the what, on what would your life be like if you had 5, 10, 20, 50 grand a month
coming in for very little work. In terms of risk, what's the risk of you not doing this? What's the risk of you living your life
doing something that you settled for? Or, if you are doing what you love -
you're very lucky for that - but what happens if that changes? So, what's the risk
if you are not taking action? The final thing I want to leave you with
is literally anyone can do this. I'm not special. I know a lot of other people
who've achieved the same thing in their different fields;
it's nothing special. They've been lucky enough
to come across this stuff. They read a book called,
"Rich Dad Poor Dad" - which I'd really recommend
all of you guys to do - and they took some action. If you want to learn more
about the ways, the how-to, please check out my blog,
which is just www.alexszepietowski.com and sign up for that. And I'd love you guys to think about
designing a life that you dream of. Thank you very much for having me.
