Show Notes

Welcome back to the Designer Practice Podcast. I’m your host, Kayla Das.

When it comes to building sustainability inside private practices, I’m a strong believer in adding passive income streams. Because I have five passive income streams inside of my practice. I believe passive income opens up earning potential that not only brings in passive income, but also allows therapists and coaches the opportunity to truly design the practice that they love and want to work in.  

One of the most common reasons therapists and coaches decide to go into private practice is so that they can have flexibility and freedom over their work life.

But one of the challenges of running a one-to-one only private practice is that you live by your calendar and you earn your income session by session, which if not managed or supplemented appropriately, can bring practice owners further and further away from their goal to gaining flexibility and freedom.

Now don’t get me wrong, I’m not saying that one-to-one sessions should be abolished. I do them in my practice and I will continue to have them as a part of my business model. But if one-to-one sessions are your only source of income, you may easily find yourself on the earned-income choo choo train where you work, get paid, work, and get paid. And if you cancel a session or take vacation, well, you don’t get paid and that can be tough. But that’s where passive income comes in.

However, there are some myths about passive income, especially when it comes to adding them inside your private practice. So, in today’s episode, I’m going to bust these myths for you.

So, let’s get started.

Myth #1: Passive income is easy money

Myth number one, that passive income is easy money.

One of the biggest misconceptions about passive income is that it’s easy money. Many entrepreneurs start adding passive income streams inside of their businesses because they believe it’s the magic beans of revenue generation. But the truth is generating passive income takes hard work, dedication, and a lot of upfront work.

Passive income doesn’t often yield immediate financial results, and it could take weeks, months, and sometimes even years to start seeing true results. This is what often prevents therapists and coaches from one, adding passive income streams inside of their private practices, and two, from sticking to it once they’ve decided to start it.

Passive income is essentially delayed gratification at its finest. And that’s because it doesn’t often bring in immediate income, or at least the kind of income that will allow you to have true flexibility and freedom that you’ve been hoping for. And with all of the gurus out there telling you to do this and to do that, and you’ll become an instant millionaire. That’s not really practical or realistic, especially if you’re just starting out.

But when you work on adding passive income streams inside of your business, you are building an asset, and if you stick with it, one day you’ll have a stream of income that you spend less and less time on and continue to make money. And let me give you a personal example. One of my current passive income streams is blog writing. When I first started writing blogs, I never thought in a million years that my blogs would become a passive income stream. I really just wanted to provide helpful tips and strategies to help therapists and coaches, like you, start growing their private practices now, not when they can afford either my services or someone else’s. Because when we’re starting out, we don’t always have all of that money to be able to pay someone to help us. And also, let’s be honest, sometimes we need a little bit of inspiration and motivation to give us that aspiration in moving forward in our practices. And the goal for my blogs was to be this for practitioners.

So, on May 7th, 2021, I released my first ever blog post, and within the first year of starting my blog, I made $3,847 from passive income. And this doesn’t include any one-to-one clients that I may have received from those who have read my blogs. It was just from the monetization efforts that I had put in place that I received this income. But truthfully, most of that income came in during the second half of the year, because within the first six months, I didn’t make a cent of income. But I kept contributing to my blog anyway. And you might also be thinking to yourself, well, $3,847 isn’t a lot of money for a 12-month period. And you’re right, that actually averages out about $320 per month, maybe just enough for groceries for one week. But like I said, this was my first year, the blogs that I have written in 2021 and after are still seeing traction today and I continue to make income monthly in 2024 because of the effort I had put in three years ago. I don’t really do a whole lot now when it comes to my blogs other than continuing to contribute new blogs, but I still make passive income on my previous blogs.

So the moral of the story is regardless of the type of passive income you decide to add to your private practice it’s important to be prepared for the work that goes into making it happen and sticking with it, even when you’re not seeing the immediate financial results you had hoped for because the delayed gratification you get from it can last years and years with minimal, or in some cases, no effort behind it long term. Like I said, going back to my blogs, from now on I’m going to continue to be making passive income on things that I’ve done three years ago. And as a result, that’s going to continue to bring money in, hopefully even in 2034.

So passive income isn’t easy money, but it is an asset to your business long term that can help you start gaining the flexibility and freedom you want. So you don’t have to worry about the next client cancellation. You can be rest assured that you’ll still have income coming in long term.

Myth #2: Passive income is a one-size-fits-all approach

So, myth number two. Passive income is a one size fits all approach.

Another misconception is that passive income is a one size fits all approach, but there’s really no such thing as the perfect passive income stream, because each person has their own purpose for doing what they do, and are intrinsically motivated by different tasks or activities. There are certainly lots of shiny objects out there, or passive income streams, that you can implement, but it doesn’t mean that every passive income stream will fit you or your private practice. I believe that the best predictor for passive income success is whether or not you enjoy building your passive income, and the second most important predictor for success is whether your intrinsically motivated to continue it even during the hard times.

That’s why it’s important to come back to your purpose for implementing the passive income beyond that of being externally motivated by income that it’ll bring in. Going back to blogging in my practice. When I started my blog, my overall purpose was to share helpful business building strategies. Not necessarily to make money from, or at least directly make money from. And because I absolutely love to sit behind my computer, in my pajamas and write or even record these podcast episodes. It fits who I am as a person. My purpose and my personality were aligned and it helped keep me going even when I wasn’t making any money from it.

Now, it doesn’t mean that you can’t have one of your goals to directly make money. For example, when I created digital templates, which is another passive income stream inside my practice. My main purpose was, and still is, to sell templates and make money. But it can’t be the only reason because money is an external motivator. And external motivators do not hold the same weight when it comes to maintaining motivation than do internal motivators. It’s the internal reasons you do what you do that will keep you going during the delay in gratification stages of passive income building. And that’s important to understand because those internal motivators, even when the money isn’t coming in, helps you either move forward, pivot, and keep going with adding passive income streams into your business.

So, start with finding a passive income stream that aligns with your purpose and personality, and that’s intrinsically motivating for you to keep on building it, even if you don’t see those immediate results. Also, at the end of this episode, I’ll provide you with a link to my free passive income personality quiz to help you find your first or next passive income stream as well. So, stay tuned for that.

Myth #3: Passive income is the only way to achieve financial freedom in private practice

Myth number three. Passive income is the only way to achieve financial freedom in private practice.  

Some people believe that passive income is the only way to achieve financial freedom in private practice. And although I will say I’m a pro passive income. But like I said in the intro of the podcast, it doesn’t mean you can’t also continue your one-to-one services. While I wholeheartedly believe that passive income streams are great additions to your financial strategy, it’s not the only way.

In addition, it also depends on what you consider quote unquote passive income. For example, one of the most common additional income streams that therapists and coaches add into their practice is therapy or coaching groups. And someone might look at that as not being passive because you do have to physically be there and be active in the process. However, others, like myself, consider it a passive income stream because even though you’re physically present and active, you’re still able to bust through that glass ceiling of income because your time in that group can be doubled. tripled, quadrupled, or even more depending on how many participants you have in your group than you would if you did conduct a one-to-one session during the same time frame.

But going back to the myth that passive income is the only way to achieve financial freedom in your practice, you can still have financial freedom by providing one-to-one sessions, by accepting contracts as an independent contractor, as well as taking on a second or part time job outside of your private practice. But the key is to have a well-rounded financial plan that may include passive income, but also considers other income streams such as the traditional fee for service or earned income options.

Personally, I think we should all have more than one income stream in our life, regardless of the type of income, whether it’s earned or passive. Because just like that we’ve seen through the pandemic, that one source of income can easily end at any time, for any reason. But by having multiple sources of income, we protect ourselves financially if one source ends.

And let’s be honest, it’s much easier to add multiple passive income streams inside our lives than it would be to add multiple earned income streams.

So regardless of what anyone says, you do not have to give up one-to-one services unless you want to. And passive income is not the only way. towards financial freedom.

Myth #4: Passive income is only for those who have an existing practice or business

Myth number four. Passive income is only for those who have an existing practice or business.

Some people believe that unless they quit their job and open a private practice or another business structure, that they cannot have any passive income streams. And this is simply not true. Passive income streams are not just reserved for existing business owners, although once you start passive income streams, it’s wise to start looking at them as business income for tax purposes. But if you are currently employed, whether or not you’re considering starting your own practice, you can have passive income streams as long as your purpose and your personality align with that particular passive income stream that you want to build.

For example, who says you can’t start a website primarily for blog writing? Or a podcast that you monetize with internal ads? Or develop digital templates and sell them? Or create a digital course regarding the topic that you have a knowledge on?

Although many practice and business owners incorporate passive income streams inside of their businesses, you do not have to have an existing business structure to start passive income streams to support your income.

Myth #5: It’s unethical to be a therapist and have passive income streams inside of my practice

Now finally, myth number five. It’s unethical to be a therapist and have passive income streams inside of my practice.

This is probably my favourite myth to deconstruct and I think this misconception comes from the fact that our regulatory bodies standards of practice and code of ethics prohibits a conflict of interest and/or a dual relationship. And so some therapists and coaches may feel that anything they do outside of one to one therapy would be considered a conflict of interest.

But this isn’t always the case. It’s important to first review and understand what your regulatory body considers as either a conflict of interest or a dual relationship because that’s important to know when you’re deciding what passive income stream you want to implement, who that passive income stream will be targeted towards, and how you decide to market or share that passive income stream with the world.

But one of the most common situations that can lead to potential for dual relationship is when a mental health therapist adds coaching services to their practice. As a mental health therapist, you may have a client that you feel would be of benefit from coaching services or maybe a group coaching service that you provide. But this can and may lead to a dual relationship. So if you decide to add therapy and coaching into your business model, you may choose to have two different niches and when doing so to avoid this from occurring.

I’m going to use myself as an example. My overall passion is to work with people to help them with their career growth and aspirations. In private practice, I’ve worked with clients, usually those in position of leadership, although that wasn’t my sole caseload, with workplace stress and burnout. However, when I started my business coaching practice, I decided to help therapists and coaches with their practices. So, although both revolve around my biggest passion, i. e. helping people with career growth and aspiration. The chances of the overlap in my clientele was minimal. And it helps me avoid any potential dual relationship with respect to that. So going back to what I said earlier, when you have a clear understanding of what your regulatory body considers as a conflict of interest or a dual relationship, you can better know what passive income streams to choose. Who to direct it towards, such as your niche. And how to choose to market it. For example, when we think of marketing, pushing products or services on your existing client might not be the best strategy for marketing your passive income streams.

But it doesn’t mean that you can’t put yourself out there and have passive income streams. So that’s going back to the myth here now. And here’s some general examples of how I’ve seen therapists incorporate passive income inside their private practices and their lives.

As therapists, we’ve all had some level of post-secondary education, and we likely had professors or know professors who wrote or contributed to the writing of one or multiple textbooks. I know that majority of my professors contributed in some way or another to the world of academia. Hence, why they’re professors. As a result of their efforts, though, they likely gain passive income through royalties or compensation through their contribution or work from the purchase of textbooks throughout universities across the country and continent. So even though their main job is teaching, they have written and sell textbooks that come in the form of passive income. And as students, we’ve purchased those textbooks because it’s on the required reading section of our syllabus. So that’s one example.

But also think of some of the most influential people we know in the field of therapy and coaching. Maybe they have founded a therapeutic technique or modality, or maybe they have bodies of work that they are considered experts on. These influential people, whether currently or in the past, worked with clients, which helped them gain their level of experience. However, these influential people often receive additional income through book sales, podcasts, being ambassadors or providing endorsements for specific companies or products. It would be highly likely that their previous or current clients have either listened to, clicked on, or even purchased the practitioner’s book or product without them ever knowing otherwise. They probably didn’t push it on their clients, but just because they had something out in the world doesn’t mean that existing or previous clients have not accessed those resources.

Another example, as you know, I love podcasting and blogging. These are two great ways to monetize your content and receive passive income, as well as grow your practice while you’re at it. And I believe sharing resources to the world, regardless of the format, is a good thing. As long as you’re following appropriate guidelines for how you monetize your podcast, and you don’t necessarily push your podcast on existing clients, you won’t really know whether a client does or does not follow you or read your blog. But what you do know is that you are helping your community and providing helpful tips and strategies or information that in turn can receive compensation if monetized.

So, these are only three examples of how passive income stream can be in private practice.

So, I guess to sum it up, though, although you should always be clear about what your regulatory body says you can and can’t do. Sometimes we assume something is unethical when it really isn’t. Having passive income streams or even certain earned income streams for that matter in your private practice or life isn’t inherently unethical. Of course, there can be some ways that it would be but as long as we are informed about our standards of practice, our code of ethics, and align our passive income streams to be ethical. They can and will be great ways to grow your practice and gain flexibility and freedom that you had initially set out to achieve.

Passive Income Personality Quiz

So, if you can’t tell, I am pro passive income stream, and I do believe by having them, they can be a game-changer for gaining flexibility and freedom in your private practice. However, it’s important to remember the passive income stream is not a one size fits all solution. Every private practice is unique, and it’s up to you to determine the best passive income stream strategy for your practice.

And that’s why I created the passive income personality quiz, to help you discover your unique passive income personality type.

If you’re interested in taking this free quiz, The Passive Income Personality Quiz, head to kayladas.com/passive-income-quiz.

That’s kayladas.com/passive-income-quiz

Or simply scroll down to the show notes and click on the link.

Thank you for listening to today’s episode, and I hope it busted some passive income stream myths for you, and that you’ve gained some inspiration and motivation to start implementing passive income streams into your private practice.

Until next time, bye for now!

Credits & Disclaimers

Music by ItsWatR from Pixabay

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