The Hidden Dangers of Earning Risk-Free Passive Income
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Jun 26, 2025
The quest for passive income takes a deep dive, revealing the hidden dangers of risk-free strategies. Insights on emotional investing during market dips offer a fresh perspective on stability versus volatility. Motivation might wane when relying solely on passive avenues, posing a potential threat to ambition. Various approaches to investment risk are discussed, urging listeners to align choices with evolving financial goals. Plus, tips on navigating the landscape of passive income opportunities highlight the importance of persistence in achieving wealth.
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Risk-Free Income Feels Comforting
Sam experienced earning $1,847 from a risk-free money market fund without stress or risk.
This passive income felt comforting and motivated him to seek more stable earnings.
insights INSIGHT
Risk-Free Income Can Kill Motivation
Earning too much risk-free passive income can reduce motivation to work, save, and invest.
Challenges fuel pride and productivity, so complacency risks personal growth and financial progress.
insights INSIGHT
Balancing Risk Versus Returns
Locking in a 4.5% risk-free return today may be wiser than chasing uncertain stock returns.
A balanced portfolio reduces volatility and still yields close to high equity returns historically.
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In 'Buy This, Not That,' Sam Dogen provides a comprehensive guide to financial planning, showing readers how to spend money effectively to build wealth and achieve financial freedom. The book includes the Financial Samurai's 70/30 framework for decision-making, explanations of 'good debt' and 'bad debt,' and strategies for building passive income streams. Dogen, with his extensive experience in finance and as the founder of Financial Samurai, offers practical advice and actionable tips to help readers maximize their wealth and live life on their terms.
Earning passive income is the holy grail of personal finance and achieving financial independence. With interest rates still elevated, it's become much easier to generate a larger amount of risk-free passive income. If you're not financially independent yet, this could be a suboptimal choice.
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Pick up a copy of my USA TODAY national bestseller, Millionaire Milestones: Simple Steps To Seven Figures, if you want to build more wealth. I synthesize 30 years of wealth-building knowledge to help you outperform 94% of the U.S. population so you can break free sooner.
Join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise.
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