Passive income seems to be the proverbial holy grail of wealth
generation these days. Everyone is talking about how to get it and
why you should too. This trend was made mainstream by a book called
Rich Dad Poor Dad by Robert T. Kiyosaki. In it, he espouses that
the rich use passive income to get richer by letting their
businesses, investments or intellectual property pay them each
month over and over instead of working for a paycheck. This is all
fine and good and there really is nothing wrong with this ideal.
However, the term itself it is something of a misnomer. There
really is nothing passive about passive income. In fact, it’s safe
to say that it actually takes exponentially more work to create
passive income than it does to create an earned income.
The other problem with the passive income dogma is that people now
view earned income as a lower or less important form of income,
something to be done away with as soon as one’s passive income is
large enough. This is also wrong. Like most things in life, balance
is the real key. The two work together as a pair and there is no
one without the other.
Here’s a concrete example, which would you rather do?
1. Work for 3 months and be paid $10 000 per month.
2. Work for 6 months and then afterwards get paid $5 000 per month
for the next 6 months.
For the math-challenged of you, they add up to the same figure of
$30 000. Most people nowadays would opt for the second option
thinking: “Yay, then I can travel and do whatever I want for 6
months”. So, in effect work for half the year and then take the 2nd
half off. However, it still means you have to wait 6 months to get
that money, whereas in example one, you’ll have earned it within 3
months. Most often, what people do when chasing passive income is
to substitute lots of income earned now for smaller amounts income
earned over a longer time period.
Not too smart!
Plus, it’s so much easier to make earned income as the dollar per
hour figure is often a lot higher. Even the richest and most
successful people in the world charge per hour for specific skills
like consulting, appearances etc. It’s a very efficient way to make
money with a lot less risk involved.
Another reason why it’s tough to keep passive income going is due
to one thing: competition. While your business is throwing off cash
month after month without your guidance, your competitors are
slowly stealing your market share, improving their offering and
chipping away at your lead. Then one day, you find that your sales
have disappeared and you have to start over.
It’s best to not even think in terms of passive or earned income
anymore. Think ROI. How much time did it take to do and how much
money did it make? If you make a million in 6 months, you can just
as easily take a long holiday.
One high leverage activity where you can make some passive income
with a little work up front is to promote an affiliate program with
recurring income (and high member retention). One program that fits
the bill in the internet marketing niche is called Monthly Content
(offering PLR and Master Resell Rights content and more).
If you sign up for an account you’re able to register for the
affiliate program and promote for passive recurring income.
Check it out now at => Monthly Content