Give Up On Making Passive Income
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My role in life has become clear over the years.
It's basically to say the unpopular things that no one wants to say out loud.
So I'm going to absolutely ruin some click-baity YouTube videos for you right now...
But you need to give up on the idea of passive income. It doesn't exist in the way you think it does.
Where We Went Wrong
Much like "manifesting", we have taken a concept and morphed into something that's just aspirational porn for lazy people.
You can't "manifest" a fit body if you eat donuts and chips all day and never do any pushups or situps.
It won't happen.
Now, people who manifest are mostly referring to this modern day concept where you think really hard for 10 seconds about "getting rich" or "finding the perfect boyfriend" and then continue living your life in a way that accomplish the exact opposite.
The same has become true of the term "passive income".
People are looking for some one-time setup through a program, app, MLM scheme or divine inspiration to make money without having to do anything ever again.
That's not realistic so give up on it...completely.
Everything, especially things that are supposed to be sustainable for the long term, require some level of non-passive action aka you doing stuff to keep it working.
- Renting out property requires maintenance, clean up, finding renters, paperwork, etc
- Affiliate marketing still requires you to capture an audience's attention and stay relevant
- Selling a digital product requires getting in front of your ICP constantly
- Peer to peer lending may bring in interest payments but can go to zero
All of these things and more require effort at some point in time beyond the launch.
The Few Things That Are Truly Passive
Now, that I told you to give up on dreams of becoming rich and never working again, let me tell you a few ways that you CAN have passive income.
But there's a catch...
You can't ever expect to get rich off of these and quit working unless you keep compounding over decades. That's the wrong mentality.
Instead, think about paying a few bills off and you'll have the right expectation.
- High-yield saving account (HYSA) - Savings accounts that can earn 2-5% right now
- Dividend stocks - Get cash flow through dividends, but stock price still impacts your investment
- Real-estate investment trusts (REITs) - Good option but money is locked up usually for a few years
- Bonds - About the safest investment there is but very low interest payments
There might be one or two others but that's effectively it.
I use a HYSA and have invested in REITs before.
They're great harbors for cash when its not being used (if you can find a REIT that doesn't hold your cash for super long periods of time which many do).
Back To The Roots
When we return to the original definition of passive income...
"Passive income includes earnings derived from a rental property, limited partnership, or other enterprise in which a person is not ACTIVELY involved."
I may not be ACTIVELY involved in my rental property daily, but it doesn't mean I'm NEVER involved.
You still have to fix leaks, hire maintenance, pay the mortgage, and find new renters when they leave.
Sure, it's a great way to make money from a time/value perspective, but it doesn't mean I don't have any work to do ever again when someone moves in.
And that's where too many people go wrong.
Passive income is for hard-workers who want to work smart.
It's not for lazy people who want to do something once and never have to work again.
Know the difference. Then go build you some passive income!
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