How Can Passive Income from Real Estate Reduce Stress?

The number one stress in America is money and it has been for years. That stress comes from knowing you could lose your income or it could be reduced greatly. That is because most people count on income from jobs and not passive income that comes in whether you work or not. Most people worry about if they have enough money to pay the bills, if they are saving enough, if they will have enough in the future and what would happen if they lost their jobs. There are many things associated with money that cause stress. I was stressed about money in college, as a young adult and even a couple of years ago even though I was making well above average. Even though it seems like making more money will relive money stress, it does not always work.

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I have been very lucky in life to make a decent living and now I have removed most of the stress I feel related to money. Not because I am making more, but because I am saving more, investing more and I have a different attitude about money. Real estate has been an incredible vehicle to get me to this point, because of the passive income it can provide.

Why is money so stressful?

Money is stressful because our lives revolve around it. Our housing, food, transportation, education, jobs and families all revolve around money. For most people the more money you make the more money you spend and the more responsibilities you have. Making more money does not always equal less stress if you have more obligations and more bills to pay. If you have a lot of bills to pay and you lose your job or have a drop in income than you are in a worse situation than if you made less and had fewer bills. That assumes you did not save any or invest in any money and 76 percent of Americans live paycheck to paycheck.

Here is a great article on how to save more money.

Why can making more money be more stressful than making less money?

I already discussed how people who make more money tend to have more bills and more responsibilities which creates more stress. But there was another bigger reason that I felt stress and anxiety when I started making decent money. When I started doing very well as a HUD and REO listing agent I was not buying rentals or investing much money except for a few thousand a year in an IRA.

The stress I felt came from a feeling that I was wasting the money I was making and I had nothing to show for it. Sure I had a nice house and nice cars, but cars and one personal house are not going to provide much security. I wanted to buy rental properties, but they were expensive and it was hard saving up for a down payment and an emergency fund if something went wrong.

Something changed a few years ago that really helped reduce my stress level.

What is passive income and how can it reduce stress?

Most people rely on their jobs to make money and they get paid for the amount of time they put in. The less they work the less money they make. Passive income is money that comes in whether you work or not. It can come from stock dividends, rental properties, businesses, bonds, notes and many other sources. The nice thing about passive income is it keeps coming in, whether you work or not.

I choose to invest in rental properties to give me passive income. Technically rental properties are not completely passive, because you have to do some work to buy them, maintain them and rent them. I use a property manager to reduce much of the work. When you build up enough passive income you stop worrying about the income you make from your job, because you know you have a cushion if something goes wrong. Maybe that cushion won’t cover everything, but it certainly helps.

Here is a great article on non performing notes.

Did buying a rental property reduce my stress level?

In December of 2010 I bought my first rental property for just under $100,000. It needed almost no work and I figured it would rent for around $1,000 a month. At the time I knew a little about rental properties, but not nearly as much as I know now. The property has been a great investment, even though the rent to value ratio was not quite as high as I like to see now.

Did buying one rental property magically reduce my stress level? No, in fact my stress may have been higher after I bought it because I started second guessing myself on whether I had enough money to buy a rental, if it was a good deal, if I could manage it, etc.

After I had owned the property a few months and it was rented, I felt pretty good about myself. I knew I had a long way to go and buying one property would not meet my goals, but it was a start. I also knew I had invested money in a real asset and I was not wasting it.

Did buying more rental properties and increasing my passive income eliminate money stress?

Over the years I bought more and more rental properties. The more properties I bought, the more my passive income increased and the better I felt about my financial situation. I still felt stress at times and anxiety wondering if I was saving enough and investing enough. I own 13 rental properties now with a 14th closing next week and a 15th closing in a couple of weeks. The 15th is a turn-key rental I am buying in Cleveland and I will talk more about that in an upcoming article.

I have about $7,000 a month in passive income coming in from my rental properties at this point. That is a lot of money for most people and more than the average salary is in America. As I mentioned before the more money you make the more you tend to spend. I am not immune to spending more either, although I try to spend much less than I make. If you read the blog you know I bought a Lamborghini last year and that was not exactly cheap. That was a huge decision for me and one I did not take lightly. However I felt really good about buying the car and it did not cause much stress in my life, instead it caused excitement. Part of the reason I was not too stressed was because I had a lot of passive income coming in from my rentals and other investments as well.

Having passive income coming in every month did not reduce my stress level about money completely, but it certainly helped a lot. I knew I was investing, building something and not wasting my money. There was something else I did in the last couple of years that reduced my stress level even more.

To learn how to use mindset and attitude to make yourself more successful, check out: How to Change Your Mindset to Achieve Huge Success: Why your attitude and daily habits have more to do with making more money and having more freedom than anything else. A 200 page book available as an eBook or paperback on Amazon.

How can your attitude reduce you stress level about money?

A couple of years ago I had a good amount of passive income coming in, a great income, a great family and I still stressed about money. I worried about the economy, about my sources of income and if I was doing enough. I worried about spending too much money and it was not healthy. I started really getting into self-help books, CDs and even took Jack Canfield personal coaching. I learned that it was not money that was causing all the stress it was me. I was worrying about things that would probably never happen, I was not enjoying life as much as I should and it was hurting me professionally and personally.

I realized that many of the richest people in the world had made fortunes, lost them and then made even more money. It wasn’t about how much money or stuff you have, it was about what is inside your head. I have learned how to run businesses, how to write a blog, how to buy houses and many other things. If I happened to lose it all tomorrow I could make it back again and be just fine.

Realizing that losing everything would not be that bad reduced stress in my life more than anything. I certainly am not planning on risking everything I have worked for and I do not think I need to. The attitude change and the passive income coupled with each other have virtually eliminated money stress in my life. I am still striving to do better and be more successful, but now it is all fun instead of worry.

If you want to read more on how I changed my attitude and techniques I use, check out this series of articles.


Stress is one of the worst thing you can put your body and mind through. Stress causes disease and you can’t think clearly when you are constantly worried. Passive income will greatly reduce your stress level when it comes to money, but you don’t have to have passive income to reduce money stress. A simply attitude adjustment towards your beliefs about money can do amazing things. The happier you are and the less stress in your life the more successful you will be as well.


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