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When To Be An Active Or Passive Income Investor

When is it best to be an active investor or a passive income investor?

There are two ways to invest. Actively being engaged in doing deals and managing assets on the frontline. Or passively, picking great investments and asset managers, and empowering them to multiply your finances.

In real estate and the mortgage note business active investing might include:

  • Wholesaling houses
  • Fixing and flipping houses
  • Buying and managing rental homes as a landlord
  • Running an Airbnb vacation rental
  • Buying and working out non-performing mortgage notes

Passive investing examples might include:

  • Private mortgage lending
  • Investing in notes through a self-directed IRA
  • Investing in real estate and mortgages through a fund

Active Investing

I’ve done it all. Starting out in direct real estate investing in 1999, I rode the boom. I fixed houses and flipped them. A lot of them. I’ve bought multifamily rental apartments. Then I discovered the mortgage note business and quickly rose to being one of the leading minds in the non-performing note investment space. While I could just rely on my passive income today, I am still highly active renting and flipping properties. I truly love the Real Estate business. I love being out there redesigning properties, analyzing the tapes for note trades, doing creative workouts with borrowers and big buys from the banks, and speaking, educating and inspiring others. I love the action and helping others through these channels.

If this is your type of thing too, if it’s what you love - being out there doing deals, helping people and doing things that would drive others crazy, then maybe active investing in these sectors is right for you too.

Passive Investing

No matter how much you love active investing, we all need passive income investments too. You never know what is going to happen to you, or in your life, or when.

It’s always smart to be positive, but things happen. It’s having that passive income there in advance that often makes all the difference in how things will play out for you for the rest of your life. In whether you can bounce back or not.

Having passive income is like drinking water. You’ve just got to.

Some people will be overwhelmingly better suited to passive income investing too. For example, you love what you do now or have big plans to start a venture, career, or nonprofit you are really passionate about.

We also need doctors, nurses, chefs, boat captains, fashion designers, charity founders, and pilots. Life wouldn’t be much fun without them, even if you had all the money in the world. If those things are your passions and your talents, do them. Just set yourself up for long term success with passive income in solid assets at the same time.

Then you can do what you want, when you want, and know your money is hard at work taking care of your financial future for you.

Who knows, when you retire you might like to get into some active investing too.


So, is active or passive investing better? There is no one right answer. Find the right fit for you at the right point in your life. We always want and need to be working on passive income. Though you might just find your purpose in active investing one day too.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

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