Episode 261: Let Passive Income Stay Passive. Your Retirement Plan Will Thank You

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Are you spending your best time chasing small financial gains while your biggest opportunity is sitting right in front of you?

In this episode, Jon Orr unpacks a simple but powerful question every business owner and investor needs to ask: are the inputs required to reach a goal actually worth the output? Through stories about kite surfing, marathon running, poker, and portfolio management, he explores how easy it is to confuse “I could do this” with “I should do this.”

For entrepreneurs especially, the real tension is often between actively growing the business and spending countless hours trying to optimize passive investments. Sometimes the smartest move is not doing more—it is choosing where your time creates the greatest return.

You’ll walk away with:

• A clearer way to evaluate whether a goal is worth the time, energy, and commitment it requires.
• A practical lens for deciding whether your “alpha” comes from your investment portfolio or your active business.
• Permission to let passive assets stay passive so you can focus on the areas where your effort creates the biggest payoff.

Press play now to rethink where your time is going—and whether the trade-off is truly worth it.

Resources:

• Ready to take a deep dive and learn how to generate personal tax free cash flow from your corporation? Enroll in our FREE masterclass here. 
• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey!
• Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
• Dig into our Ultimate Investment Book List
• Follow/Connect with us on social media for daily posts and conversations about business, finance, and investment on LinkedIn, Instagram, Facebook [Kyle’s Profile, Our Business Page], TikTok and TwitterX. 
  

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

In this episode of Canadian Wealth Secrets, Jon explores how input-output trade-offs shape better goal setting, time management, and decision making, using lessons from water sports and kite surfing to reveal a deeper truth about personal development and wealth building. For Canadian entrepreneurs, the same question applies to every Canadian wealth plan: are you spending your best energy where it creates the greatest return? Instead of over-managing investments, chasing tiny portfolio improvements, or getting lost in complex corporate wealth planning, business owners can step back and focus on smarter wealth building strategies Canada—including tax-efficient investing, RRSP optimization, salary vs dividends Canada, personal vs corporate tax planning, corporation investment strategies, and business owner tax savings. Whether your goal is financial freedom Canada, financial independence Canada, an early retirement strategy, modest lifestyle wealth, or building long-term wealth Canada, this conversation encourages clearer financial vision setting, stronger financial systems for entrepreneurs, and a practical investment bucket strategy using financial buckets, passive income planning, capital gains strategy, financial diversification Canada, and retirement planning tools. It also raises important questions around real estate investing Canada, real estate vs renting, corporate structure optimization, optimizing RRSP room, Canadian tax strategies, estate planning Canada, and legacy planning Canada—all while reminding listeners that the path to wealth is not about doing everything yourself, but choosing the right inputs for the outputs that matter most.

Transcript:

I just got off a client call — or I guess a prospective client call — and I wanted to share this message with you. It made me think of a story about my life and some of the choices I’ve made. I was talking with Kyle about some of the choices he’s made, and it was something we both feel passionate about. It helped us ground ourselves and think about some of those choices.

The story starts with a recent vacation. We went to the island of St. Martin, which is a near and dear place to my heart because I lived there for two years when I was young. I met my wife there. We went back as a family recently, and while we were there I remembered one of my regrets from living on the island — I didn’t do and participate in as many water sports as I would have liked. I tried windsurfing while I was there and it was hard, and I didn’t stick with it too long. I had done scuba diving, got my license, and learned how to sail. But I never learned to kitesurf or do those other water sports.

So when we went back, I said, I’m going to commit some time to learning kitesurfing while we’re here on vacation. Maybe I’ll become a kite surfer. We live pretty close to the Great Lakes here in Southern Ontario — I could drive out on weekends, buy a kite and a board, make it a thing. Every day on vacation, I’d set up lessons right on the beach. My daughters and I would go down and do our lesson. We had three days in a row. It was great — we were on the water, learning. And to be honest, it’s hard.

I didn’t have a lot of preconceived notions about how much success I’d have, but I was optimistic. One day I spent most of my time in the water trying to get up. There were moments over those three to four days where I got it — I got up on the water, I was riding the waves. Could I slow down for safety purposes? No. Could I stop? Sure, I could fall down. Could I turn around? No, I’d have to fall and try to get up the other way. Could I handle a strong gust of wind without getting thrown around? Not really — and that did happen, though I had a guide and a boat following me the whole time.

After the lessons I’d watch YouTube videos to get perspective. One video said: if you’re going to feel safe on the board while kitesurfing, you’re expected to put in 30 to 40 hours of time before you feel confident and safe enough to turn, maneuver, and not hurt yourself. I had done maybe four and a half hours. I had a long way to go just to feel safe.

And I thought — is that a fair trade-off for me right now? Looking at my day, my time, my family time — am I prepared to spend many more hours learning this craft? How many more lessons? How much will the equipment cost? The dollars weren’t the issue. The issue was the inputs required to get the output I wanted. After trying, experiencing the successes and the setbacks, I had the perspective to say: I need this level of input to get that output. And right now in my life, that trade-off isn’t there. I have to be okay with saying I’m not going to be a kite surfer.

Now, “I’m not going to be a kite surfer” sounds trivial. But the bigger picture here is about understanding outputs and goals, and then understanding what level of input is required to reach those goals. That perspective is really important.

When I talked with Kyle about this, he mentioned that at one point he thought he was going to be a marathon runner. He said, I want to run a marathon. But after he learned what it was actually going to take in terms of requirements and inputs — getting up every day, the training, the time away from family — he decided it wasn’t a trade-off he was ready to make. He concluded he absolutely could run a marathon, but he wasn’t willing to commit to what it required. And he made peace with that.

He also mentioned a time he wanted to get really good at poker. He spent time learning the game, practicing, understanding the moves, reading people, knowing the probabilities. He had some successes. But then came a hand that was probabilistically in his favor to win — and out of nowhere he lost in a one-in-a-million situation. Emotionally, he had a hard time dealing with that. And it was similar to the kitesurfing situation or the marathon situation — could he have become a high-level poker player? Absolutely. But he made the trade-off that the inputs required, and especially the emotional work around handling those kinds of losses, just wasn’t what he was ready to commit to. And that’s okay.

These aren’t wrong choices. They’re just choices we have in our lives. The reason I’m sharing these examples is because the business owner I just got off the call with was battling with a similar kind of choice. They have passive assets — in the stock market, in different funds and asset classes. They also have an active business generating income. And this person came to talk to us specifically about the moves, the structures, the optimization of their passive portfolio. They were spending a lot of time trying to become an expert in managing that portfolio themselves — tweaking every day, looking at their accounts, doing options trading, making very specialized moves to try to get a better return, chasing alpha.

And every hour you spend doing something like that, you’re taking away from your active income. This person said, I’m trying to do this, but I’m maybe not sure I’m doing it right. So what we talked about was: over here you have active income. If you spend an hour over there working on your passive portfolio, or an hour over here in your business — where do you earn more? Where’s your alpha? Could you spend more time in the business and generate more money there? Or could you commit to the portfolio management route and actually become a great portfolio manager? You could. But what are the requirements that trade-off involves? Hours a day working on that end of your financial plan.

Meanwhile, over here you have an active business that is running and making money. Why not spend time there making more money, and let the passive part just be passive? Let it do its job. You’re working so hard on the passive side trying to turn a 7% return into a 9% return. If you spent that same time and effort in your business, do you get an extra 2 to 3%? Or do you get an extra 10 to 20%? That’s the step-back move we sometimes need to make — am I putting these actions into place in the right place to get the best output? Is the trade-off worth it?

Sometimes a little bit of ego gets in the way. Could I be really great at portfolio management? Of course I could. But should I? And it’s okay to say: I’m not that type of trader. I’m not going to be the poker player. I’m not going to run the marathon. I’m not going to be the kite surfer. I’m going to stay focused over here because it actually helps me achieve my goals better and it’s a better trade-off for my time and my lifestyle.

This person had to step back and say: I’m going to let the passive part do its job, and I’m going to focus on the active part. And if at some point someone really wants the portfolio management side to be the most important part of their day and they’re ready to live that life and create those inputs, then go do it. You just have to make the decision: are the inputs required to get the output worth it?

That’s all I wanted to share here today — just the step-back move. An honest reflection on inputs versus outputs, and where we should be spending our time. I needed to reflect on this myself too. Do I spend a lot of time tinkering in my portfolio, or should I focus more in the business, make more money there, and push it over to professionals, or let the ETF sit-and-forget method or dollar-cost averaging approach just work? Because we don’t always need to tinker. We can let the passive part do the passive job.

Hopefully that gave you something to think about. Hit reply on any of the emails you’re getting from Canadian Wealth Secrets — we’ll read them. We’d love to see your thoughts on this type of reflection and where your inputs are creating the appropriate outputs. Or maybe you just want to comment on how I could have been a better kite surfer. Take care.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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