Over the past few months or years, I bet you have heard a lot of noise about passive income. Not surprising. It is a hot topic
When you search “passive income” on Google, you get 7.320.000 search results. Not bad. A lot of business coaches and marketing gurus are talking about it. And many entrepreneurs are dreaming of it.
Question is: is passive income worth looking at or is it just a fad?
The short answer: yes, it is worth looking at. No, it’s not a fad. But, you need to be cautious. Read on to find out why you need to be very cautious when it comes to passive income.
What is passive income, and how does it work?
I prefer to define passive income as revenue you earn even when you aren’t actively working. By contrast active or working income is money that stops coming to you when you stop working.
Example, a coach working one on one with his coaching clients – that’s active or working income. If this coach does not have any clients, he does not get paid. If on the other hand, our coach writes a book that he sells to his coaching clients, we are talking about passive income. He has to write the book once, but afterwards the money keeps “rolling in” every time he sells his book.
7 ideas to generate passive income
- Write a book, sell it or collect royalties
- Create an online training
- Affiliate marketing – you promote other people’s products and earn a commission when you sell that product to your audience
- Create a software and sell that
- License your photos
- Write a blog and attach Google AdSense to it
- Same for your vlog on YouTube
It is clear that there are many more ideas out there. Just go to Mr. Googles and find out.
Now that you know what passive income is and you have some ideas on how it works, you’ll probably tell me something like: “yeah yeah, but writing a book or creating an online course takes time.”
And that’s so true. And that brings me to the topic I wanted to discuss with you:
3 myths about passive income
And why you need to be cautious when it comes to passive income.
Passive income is 100% passive
I’m sure it’s clear by now that it is not 100% passive.
You might think you can sit back, sip on your piña colada in Curaçao for the rest of your life and still make money.
It actually requires a lot of time and work upfront and some time after. There is always time involved.
Imagine you create an online course. Well, you need an idea, you need to do the research, you need to create it…. And afterwards, you still have to market that course and sell it. Some parts of your course might also become outdated or obsolete, so you need to update once in a while.
Passive income will make you rich
There are people who make a lot of money thanks to passive income. However, this is not a get rich quick thing.
As already mentioned, you are going to have to work really, really hard upfront. And what’s worse, you will have to work very hard for no money at all.
You need to find the right audience – you can’t sell to everyone. Then you’ll need to turn these people into fans and collect subscriber emails. And when you don’t have a big following you better give more personalized help to your first fans. You’ll also have to offer value for free. You can’t start selling your stuff without your audience knowing anything about the value you offer.
You do all this in the hope that you will then get paid at the end and that ultimately the payoff will be greater than the effort that preceded it. In many cases this does actually happen but we cannot guarantee it is going to make you rich in a hurry.
Passive income will make you happy
If you are only in it for the money, it will not make you happy.
First of all, it will not make your audience happy if they feel you care more about the money than about them. And eventually they’ll stay away, you won’t be rich and certainly not happy.
Second, think about why you started your business. Was it purely to make a lot of money? Or was it because you felt you had a mission, a purpose? Because you felt you could serve people? Because you want to leave a legacy? To do something bigger than you?
If you are only in it for the money, well, sorry to say, but then you are not my favorite reader or client. Oops, there I said it.
If, on the other hand, you feel there is more in life than money… then I am sure you will not be happy lying on the beach all day doing nothing but sipping on that piña colada of yours.
I know I wouldn’t. Money is an extremely important by-product of your business but it is a by-product in my opinion. My main goal is still living my purpose: “inspiring & enthusing entrepreneurs to grow as a person and with their business”.
Now all this being said… should we try to make passive income or not?
Yes I think you should.
Keeping into account the three myths.
What do you think?