Cash Confident with Brie Sodano

Debunking the Myths of Passive Income with Jess Weaver

July 11, 2024 • Brie • Episode 60

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Ready to transform your approach to passive income? Join us to debunk the myth of effortless money with the insights of Jess Weaver, CEO of the Women's Wealth Boutique. Together, we demystify the complexities behind setting up passive income streams like online courses and rental properties.

You’ll gain a deep understanding of the significant upfront investments—both financial and time-related—that these ventures require. Learn the critical importance of a solid marketing strategy and how to treat these income streams with a business mindset to achieve true financial success.

CONNECT WITH JESSICA:
Website | http://www.thewealthboutique.com
Instagram| https://www.instagram.com/pinkfixmymoney/
https://www.instagram.com/womenswealthboutique/
Financial Trendsetters Book | https://jessicaweaver.com/financial-trendsetters/

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https://linktr.ee/cashconfident

CONNECT WITH BRIE:
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Facebook | @cashconfidentcommunity
YouTube | @cashconfident


Speaker 1:

Welcome to the Cash Confident Podcast. If you're a woman ready to take charge of your finances and create a life of abundance and exponential wealth, you've found the right place. I'm Brie Sedano, your host, known to my clients as the Queen Maker. Get ready to dive into a world of money management, mindset and manifestation. Oh, hello, hello everybody. Brie Sedano here for the Cash Confident Podcast, and today I have the most amazing guest ever and I'm so excited to introduce my dear friend, my long-term colleague, jess Weber. She is the CEO of the Women's Wealth Boutique and she's an author and a TV host. And I fucked it up. What is it? Tell us, jess? I'm sorry.

Speaker 2:

I ruined it. Yes. Founder of Pink Fix Productions, our productions multimedia company yes.

Speaker 1:

And I want to tell you guys a quick story. So Jess Weaver and I were in the same business coaching group years ago and I remember that when we first got to meet, she had this blog called Not your Father's Advisor, right, was that it? Yeah, yeah, it's a good memory, brie. Yeah, because I for sure. When I met you in real life, I was like, oh my God, she's famous. I've been reading her articles on Pinterest and it's been just such a joy to watch, just to witness the growth that we've both been doing. It's just so good to get to hang out with you and see you do all this amazing stuff, oh same.

Speaker 2:

The evolution of you and your business has been amazing to witness and cheer you on from the side and then get to partner and collaborate for things like this and you've been on our show, women Behind the Millions. It's fun to have this relationship, just keep growing and seeing everybody succeed.

Speaker 1:

Super, super good. So today, jess Weaver is here today to talk to us about adding passive income to our businesses, because this is something that she's super, super brilliant at, so she's going to give us all the inside tips, the scoops and all the things. So, first of all, jess Weaver, first and last name, very official Tell us what are your thoughts on passive income.

Speaker 2:

Passive income, I feel is a big myth out there, where somebody's just going to give you money or I'm going to get a rental property and the money's just going to come in. But we all know any kind of passive income. It's a business and you need to approach it with that frame of mind, where one is going to take some time to set up. It's going to take some investment of probably your money or your time, your sweat equity, your energy to understand it, learn about it, do your due diligence before you go all in on anything and learning the ins and outs of it. How much startup capital will you need for that investment property? How much startup capital? Or how about coaches online? We see this all the time.

Speaker 2:

Brie right, I'm going to create online programs and I'm going to sell them as passive income. I think ever since pandemic, this has blown up, and one. You're taking a lot of time to build out the content for that, then the copy to sell it on social media and the marketing and email. This and all of that too. Then you're paying people to edit the videos and to put them onto a platform where people can log in too, and then there's ongoing costs to maintain the videos, to maintain the portal for all the courses that you have as well, so it can let's call them semi-passive income streams.

Speaker 1:

Yeah, I could share. Sometimes people say this to me. They're like, oh yeah, I'm going to make a course and we're going to have it be passive income streams. And I'm like, so I have courses. I've sold thousands of courses. We've been doing courses since 2017.

Speaker 1:

I was like it is work. It's not even like it's passive in the fact that you might get a sale while you're sleeping. Like your sales may come in while you're like eating crunchies on a patio somewhere having a little spicy margarita. But the thing is is I'm like you have to have an ads manager, you have to optimize these sales pages. Like money doesn't just fly into your courses. Like you have to be able to really really sell it and marketing is its own skill set.

Speaker 1:

So, like I think that's the thing that people really really don't realize is that when you have a business, selling your thing is the hard part, right? Like that's the thing that's the challenge is getting the lead, that's making the sales. And like, oh, sometimes, you know, I've talked to people who are like $15,000 into building our course, like with no online presence, with no ad strategy, with no idea why anybody would buy this thing. It's a really interesting phenomenon, so I'm really glad that you pointed that out. And, honestly, sometimes I talk to people and they think that same thing about oh, I'm going to get this property in Airbnb. And I'm like, yeah, same thing about oh, I'm going to get this property in Airbnb. And I'm like, yeah, okay, so that's like a kind of a, that's kind of a part-time gig. It's not exactly, it's not exactly passive, it's not.

Speaker 2:

There's going to be maintenance. We have a property in Aruba, so you can imagine the AC goes a lot, or the refrigerator are the two big things that we have to replace pretty consistently. So a big issue people do with passive income is the income comes in and they're not setting aside some of that money for ongoing maintenance, whether it's for a course, for just the technology to support the course or the Facebook ad fees and things like that, or for an Airbnb or rental property to replace different utilities, or you have a bad renter and then you have to replace things inside of it as well. So you have to approach any rental property passive income that this is a business that's going to bring income into my world. But there's that startup investment and then there's ongoing maintenance and that might be different.

Speaker 2:

Let's say you hire a wealth advisor, a financial advisor, to build passive income in your portfolio. Well, you're paying them a fee to do that. So even though somebody else is doing the work for you, your money's paying for that. Nobody's just giving money, especially in the financial industry. Any transaction, there's a cost associated with it and you have to weigh that out. What is that return on investment, like you said for the courses too. I hear you probably hear this too, bree right, I'm going to work with this coach and they're going to save my course. And now they're even more money. Onto that course I invest initially $5,000, $10,000, but now I'm going to pay $15,000 for this coach to show me what to do with this course and how to sell it. And then that snowballs into hiring. Well, another coach is more specific on the social media side, and then another coach on Facebook ads, and it just keeps chugging along and this passive income has become a bleeding hole in your cash flow and your money.

Speaker 1:

Yeah that that that can be, and I mean, depending on what, how do I want to say it's like if you have something to really teach and you're really good at it, do it, do it and then figure it out. Like I've made a lot of money in courses, I just hate it when people think that there's no work that goes into it. So I think if we come at this with proper expectations, we can really make these semi passive income streams profitable and work. But I loved what you were saying just about like really doing your due diligence to be prepared, because I think that's the main thing.

Speaker 1:

If you have a course that you want to sell and you don't have all the pieces together to get it right, chances are it's not really going to sell and that's just going to be like a black hole of expense that you, that you can't figure out how to really get work. And the same thing is like true for rental properties or for anything else that you do. It's like if you don't really really understand what you're doing and look at it really as a business and to be prepared, then it's, you know the taxes are going to come due and you're going to be like oh, you know, or the would you say you get a bad renter or something and it's. It can all be really, really hard and stressful. So what are some things that you suggest that business owners do to help diversify their income streams?

Speaker 2:

Yes, I love we'll go back to semi-passive income streams. I love having multiple streams of income coming into my world. Even at our From the Wealth Boutique, we diversified our advisor's revenue streams with different things. So we have financial plans, estate plans, we have a service fee for managing people's money. We've even recently added in property and casualty to just be a more holistic firm. But then also it allows us to work with more diversity of clients as well. We don't just have to work with people who have a lot of assets, which a lot of firms do now. They have standards and minimums you have to meet. It allows us to engage with people at different values, whether they're just starting to save money or they've been saving money and now they're ready to retire on their millions as well for it. I think going into any passive income is a very big learning experience and you have to be open to that learning and things are going to happen that you did not prepare for. So having a good guide along the way an advisor can really help. You wanna look at the tax implications as well for it. I just got an email from one of our clients. She's going through a divorce spree. They had a passive income, rental property and she just emailed we sold the property.

Speaker 2:

What does this mean for taxes? So this money, this 250,000 that's coming to me, do I get to keep all of that or spend all of it? Or is some of that going to the IRS? And for rental properties, an accountant is going to depreciate the rental property about 3% each year. So you do owe tax on that money rental income and then you have rental expenses. Those are going to offset tax-wise as well for it. So think about how is this money going to be taxed? To me, more money is great. I'd rather have more money coming in and pay tax on it than not have that money coming in. I think people are like I don't want to do this because I'm going to have to pay taxes. Build more money coming into your world and do for it.

Speaker 1:

One day I had a client say that to me do for it. Yeah, one day I had a client say that to me. He's like, well, I don't want to invest that money, I don't want to have to pay more taxes. I was like that's like not eating because you don't want to take a shit Like it doesn't even make sense, or you can donate the money.

Speaker 2:

If you really don't want to pay tax, donate the money. Or how about liquidity? Right? We talk about that a lot as financial planners and wealth advisors. If I do need this money that I just invested into this passive income, how quickly can I get that money out? So, things like a rental property, a physical townhouse, lake house, vacation house right, how quickly could I sell this? What are the costs associated with that? Sell the taxes and then that money hitting my account.

Speaker 2:

Or an investment, a stock, a bond that could be. They're actually changing it to one day, one business day. It used to be two to three business days, so very quickly as well. But I think most people they run out of capital before the investment can really start getting going and building for them. I think any passive income is going to be long-term, should be a long-term mindset for that money. Long-term should be a long-term mindset for that money. You've got to let it do its thing five, 10 plus years and let it keep chugging away for you, especially anything like a stock, a bond, a rental property, the Airbnb, because those startup costs. You're going to have a startup cost associated with it as well.

Speaker 1:

Perfect, I love that. So what are some other things that people should be thinking about and looking at like, more or less, to be successful?

Speaker 2:

Oh sure. And if you're looking at business owners, another way for passive income is having other people sell for you. So you're getting out of that sales role. They're generating income to your firm, your company. They're generating income to your firm, your company, but you're not the one out there doing the work. So you can have whether it's a salaried gig or they get a commission on it, or maybe a combination of both. It's another way to bring in kind of that semi-passive passive income. So if you're ready to get out of that role the marketing you have a course, but you don't want to be out there talking about it.

Speaker 2:

Hire somebody, pay influencers as well, and then they're going to bring money into the firm, which is what we've done at the Wealth Boutique. We have six advisors. All of us are pulling in our different streams of revenue into the firm to pay for the overhead. But if they get a new client, it helps the entire firm, it's bringing them into the entire firm and it makes your firm, your company, a lot more valuable and profitable. When you go to sell Because most business owners you're building a business and asset for retirement. I'm going to another topic we were talking about earlier Brie. If you are the one that's selling, it's going to be very hard to sell your business at all, but if you have a team that will stay in place beyond when you're ready to retire and sell, your valuation is going to skyrocket. So you should start building in that diversity, already knowing what your end game is what else makes businesses more valuable to sell.

Speaker 2:

Oh, we did a financing loan break and it doubled our valuation because we could get the key infrastructure in place with personnel. So our valuation went from 1.5 to 2.5 in a year because of that investment. Tell us a little bit more about that. So I think a lot of business owners, especially female business owners I've found that a lot of women shy away from looking for loans and financing for their business, and I like what poor people say think of debt as loans. Rich people call it financing or leveraging and using other people's money. I think we need to change our mindset around loans as well, for that right Financing for their business.

Speaker 2:

But because of business, it requires a lot of startup capital and it might take a year to up to five years for your business to really be flowing and cash flow heavy. Where now you can pay off those things and where most businesses fail is because they do not have enough startup capital either. Unfortunately, women business owners aren't as attractive for banks to give loans to. You might need two years, proof of income that when you're established, you're here, you're not going anywhere and in order to get a loan and there's a lot if you are a female-owned business or a minority-owned business owner in your state. Look for the state grants. There's a lot of availability out there. You just have to do your research and homework and work with somebody who knows how to write grant proposals as well. It's really important if you're going to invest the time into it. But you're going to want to have a good bookkeeper who's keeping your books in order, because they're going to want to see your profit and loss statement, your balance sheet, all of that stuff. So start keeping things clean from the start. It's very hard to go back and you're going to end up spending a lot of money going back to clean it up too, so you're going to want to clean up your books. You're going to want to have probably two years of income to keep it going. Or you can partner with like venture capitalists. Angel investors are out there too, especially for women who are think of these women. They're sitting on millions and they want to give back. They want to invest in something that's attractive to them. That's maybe something they're passionate about as well. Or you can go to your local bank. In the finance industry we have certain banks that they understand our industry so well that on your book of business, you can get a almost like a line of credit break that on your book of business. You can get almost like a line of credit break Like a HELOC Home Equity Line of Credit. It's a revolving door. You can take chunks out, pay it off and it's there for five to 10 years, depending on your term.

Speaker 2:

But I left my father's firm in 2022 to launch the Wealth Boutique to create a really special place for women investors, clients and advisors. So we are a female focused firm, built by women for women, and we had three advisors join us the first year and three last year and we had so much growth, which is amazing. But I was getting close to burnout, which happens to a lot of female business owners. Right, the burnout is real and I knew I needed to start hiring key people, and the first hire for any business owner really should be a director of operations. Somebody needs to be on the operational side of things and that's a big salary for it too. So cash flow I knew we were going to be there, but we weren't there when we made that initial hire. So we did some financing for it and we had, for five years, this line of credit that we could use and I started okay, we'll have this salary covered for the foreseeable future. We hired our director of operations.

Speaker 2:

She changed the game for our firm Kami Incredible operations manager and our valuation went from 1.5 to 2.5 in a year because we had the right infrastructure. We are now cash flow heavy where we actually don't even need the loan anymore. We're paying it back already, and now we have the infrastructure to build on more, and then we can look at well, do we want to? As we're paying it off, we can then use it to invest in that next key person, which will be our chief compliance officer. We're going to bring in a tax specialist, so we can keep using it and paying it off to just build our valuation and if I mean our valuation went higher than it was on our 10-year projection in a year.

Speaker 2:

Oh, that's exciting. Good for you. We were still valued really well, but it wasn't near where we wanted to be. But you saw where it was going, though, and keeping track of your income and what's that net revenue is going to be huge, because any financing company bank is going to want to see what's that net revenue. Can they afford the principal of the interest payments along the way? So, understanding your finances as a business owner is going to be huge for any kinds of growth. You're going to need to do it and it might be painful in the beginning because you might not have a lot of income coming in. But remember it's going to feel really good when the income is flowing in and you can look back and see look, how far we've come. It's amazing.

Speaker 1:

Love it, so tell us about your books and how that provides an income stream to your business that you also call semi-passive.

Speaker 2:

Yes, the books, I think, are the best way for especially advisors. We come off as intimidating, overwhelming, speaking over our clients' heads. The book is a really intimate way for clients, new people into our world, to get to know us. And I say a client, a woman going through divorce who is so vulnerable, emotional, feeling really insecure about her future, can spend hours with me in her bathroom or on the beach or drinking some wine in a very intimate way that you can't really replicate in real life and it's become a huge referral source.

Speaker 2:

So my one client, sue, is in Florida. She goes I have a new prospect for you, a referral for you. Send her your first book or send her your second book, because she knows all of them, she knows what frame of life they're in, the ones going through divorce, ones going through retirement and obviously, as people buy the books, you get that income. I decided this year and we did it with Financial Trendsetters that all of the book proceeds are being donated to fund a scholarship for a young woman who wants to study finance. So we did $5,000 this year from our gala, which you attended.

Speaker 1:

So much fun.

Speaker 2:

Our gala and the book proceeds and we're going to keep it going, moving forward as well as part of our give back, but then building out more income streams. At Pink Fix Productions now we've partnered with multiple authors to do anthology books with them, so it's a multi-author book, 10 to 15 contributing authors, and that's built out more revenue and giving all these amazing women a platform to tell their story and share their mission and to build a community. Each anthology book feels like its own community in itself. These women supporting and cheering each other on it's just incredible. So, in different ways, it's building income From the actual book proceeds. There's income, but then there's these also spin-off projects that we get to keep doing, and I feel like any kind of passive income should feel more fun too. There should be a playful aspect to it that gets you excited, love it. So where?

Speaker 1:

can people find out more about you and the Women's Wealth Boutique and the Pink Fix?

Speaker 2:

and look at your books and, you know, stalk you on the internet, yes, so JessicaWeavercom, thewealthboutiquecom as well, and at Pink, fix my Money on Instagram, facebook, youtube, all that good stuff. And our TV show, women Behind the Millions, is on the E360 network too. So lots of different places to check us out. Ladies Sounds so good. Well, places to check us out, ladies Sounds so good.

Speaker 1:

Well, thank you so much, jess. I appreciate you coming and telling us all these things about how to strengthen our passive income and how to make sure that we do it in a way that makes sense, so that way we don't accidentally turn our passive income streams into like a money sucking black hole of time and energy. All right, everybody, I will talk to you next week. Thank you for listening to the Cash Confident Podcast. Remember, knowledge alone isn't enough to build wealth. It's what you do with that knowledge that counts, and that's where the Cash Confident community comes in. Our community is where aspiring wealthy women gather together to master money and mindset and build exponential wealth. I invite you to join our community where women are cultivating a healthy relationship with money and living the life of their dreams. Visit wwwcashconfidentcom to learn more.

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