Trying to shortcut your way to retirement? It’s not that simple

You’ve been sold a dream that’s hurting your financial progress. The “passive-income-never-work-again” dream? The one where money pours in while you chill on a beach? Yeah. It’s not as simple as they like to make it seem.

I get why the narrative exists, though. It’s such an easy dream to sell. There are so many people who hate their jobs and would love to win the lottery and never work again. But the truth is, buying into this narrative will actually slow you down, financially.

Looking for shortcuts to the finish line can often leave you worse off overall.Credit: Simon Letch

First, let’s clarify what passive income is. The term refers to income generated without your direct labour being involved. For example: income earned on investments.

Assets like ETFs or property will generate income for you, as long as you own it and it performs well. This is in contrast to earned income – if you stop going to your job, you stop earning.

The dream is this: if you grow your investments enough, you can earn enough from your assets to not have to produce any earned income. You can financially afford to retire.

That all sounds great, so what’s the problem?

If your core motivation is to avoid doing work, you will constantly be looking for shortcuts and quick wins.

If the reason you’re chasing passive income is to not work, then what you’re really looking for is ways to not have to work. But creating passive income takes a fair bit of work.

It’s not the “lay back, do nothing, easy money” dream that it’s often sold to be. It takes work to streamline your cashflow, increase your savings, research and manage investments, optimise your super, optimise your taxes, learn to manage risk and so on.

Now, there are ways to simplify the process. But simplification doesn’t mean that it’s not work. It still takes work. There isn’t a magic button.

But if your core motivation is to avoid doing work, you will constantly be looking for shortcuts and quick wins.

Simultaneously, you will live in frustration. “Why isn’t it happening faster?” “What’s the secret hack I’m missing?”

You could have the entire step-by-step road map to financial freedom in front of you, but you will struggle to take action on it because it’s “too much work”. Then, you’ll go back to searching for shortcuts that promise quick and effortless results.

I see people stuck chasing promises of effortless success for years, only to be no further ahead. How do you get off this hamster wheel? Here are a few starting points:

Reassess your relationship with work

In most cases, the problem isn’t the money, it’s the work. There’s something about your current work-life causing you a level of pain you want to escape.

Maybe you’re overworked and burnt out. Maybe you hate your boss, your industry, or your role and it feels soul-sucking. Maybe you are frustrated with the routine, or the lack of autonomy.

What changes can you make to move you towards a healthier, happier work-life? Do you need more time off? Do you need a job with less stress? Do you need a shorter commute?

Finding ways to make work less draining and more sustainable is the ‘quicker and easier’ solution. Passive income is a long-term project. It won’t fix your hatred of work anytime soon.

Think about your desire for ‘quick’ results

If you find yourself on a never-ending chase of quick wins and hacks hoping that will be the magic bullet to your financial problems, the money isn’t the problem. Your mindset is.

Do you feel behind your peers, and you’re in a hurry to catch up? Are you looking for the external validation you think will come from the result you’re chasing?

Whatever is driving you towards wanting overnight success, is the thing that’s holding you back from committing to the work required to get results long-term.

Find ways to calm your nervous system

One reason people chase quick wins and shortcuts is they’re stuck in survival mode. This can make them frantic and desperate.

This makes it hard to have the patience, focus and follow-through required to commit to longer-term projects that don’t have immediate payoffs. You feel like you need the results now.

So, what are things that you could do to reduce the stress and anxiety in your life so you have more mental and emotional capacity to slow down and stop chasing short-term gratification?

It takes a lot of work to get to the point where you can afford to never work again. That takes patience and commitment that doesn’t come from quick wins and shortcuts.

But if you’re willing to embrace the work – you’ll not only create the freedom and lifestyle you’re seeking but gain a level of confidence and fulfilment that no shortcut can ever give you.

Paridhi Jain is founder of SkilledSmart, which helps adults learn to manage, save and invest their money through financial education courses and classes.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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