Could the myth of “passive income” be damaging your health – or at least your psychological well-being – as Daniel Priestley, author of Become a Key Person of Influence, proposed in a talk recently?
He argued that the notion of “passive income” was founded on the idea of making money by doing something one didn’t want to actually do, when in reality, money is more often made by doing what you’re truly passionate about.
It was interesting to hear this the day after experiencing TEDx Observer, a day of truly passionate speakers with “ideas worth sharing”. Speakers who were intent on changing the world for the better, each in a different, specific way: charity workers, bloggers, academics, entrepreneurs, artists, people with “causes”. Speakers who were not necessarily doing what they love so much as doing what they felt was important. More on this another day.
But Dan’s point was also interesting in the context of James Geary’s new book about the role of metaphor in thought, I is an Other.
Among many other interesting ideas, James draws attention to the metaphors we use for money markets. He says: “Psychologist Michael W Morris and collaborators studied a slew of financial commentaries and identified two primary market metaphors.
“What they call “agent metaphors” describe price movements as the deliberate action of a living thing, as in “the NASDAQ climbed higher” or “the Dow fought its way upward”. In contrast, “object metaphors” describe price movements as non-living things subject to external forces, as in “the NASDQ dropped off a cliff” or “the Dow fell like a brick.” The researchers found that “agent metaphors tend to be evoked by uptrends whereas object metaphors tend to be evoked by downtrends.””
James goes on to explore the effect of these metaphors on the behaviour of traders: all fascinating stuff.
Because, of course, the metaphors in our language influence the way we think. You don’t need to disappear into a morass of Sapir-Whorf (or more memorably, Sapir-Wolf, “if you talk like a Klingon, you think like a Klingon”) for that to be pretty self-evident.
So what happens when we think and talk about “passive income”? It’s a slightly odd phrase, because what it’s meant to mean is that the recipient of the income is passive. But what it actually says is that the income is passive.
In other words, the income is an agent, which could presumably go clambering up the cliffs of the markets, feeling the sea breezes and taking the occasional risk. But instead it chooses the life of a couch potato, putting on weight but not gaining fitness.
In this metaphor we’re comparing income, inevitably, to a human agent. So if you believe that it’s a good thing for humans to live passively, then you’ll be comfortable with the idea of “passive income”.
Personally, I’d rather my money was working for me, rather than being “fattened up”: surely it will make it more resilient to the inevitable twists and turns of financial fate?
So I’m with Dan on this one: I agree that the myth of “passive income” could indeed be damaging your financial, psychological and even physical health! What do you reckon? Please comment below.