Wouldn’t you love to be able to make a few careful investments and then sit back and watch your bank account grow? Anyone would, which might be why the concept of passive income from investments is so popular on the Internet. All you need to do is click a few buttons, and you’ll never have to work again, right?
Not exactly. Passive income can absolutely be an important piece of your overall income stream, but it takes work to learn how to make passive income work for you and become the kind of expert who can leverage their knowledge into steady income. Let’s break down the five most common myths about how to make passive income work so that you can find the right way to build this into your business and your personal income.
Myth #1: Passive Income Requires a Specific Tool or Trade Type
If you start searching the Internet for more information on passive income, you’ll find various people touting different tools that they guarantee will let you retire in just a few months’ time. They might be talking about historical gold and silver prices, or forex trading, or a simple tool that you can buy from them for a very low fee.
The truth is that there are many different ways to generate passive income. Anyone who insists that their way is the only way expects you to pay for their way. It rapidly becomes obvious that their tool doesn’t need to make money because selling their tool does.
Myth #2: Passive Income is “Set It and Forget It.”
The fantasy of passive income is that once you set up your income streams, all you need to do is sit back and watch your bank account balance start to climb. That’s just not how it works.
The truth is that virtually all successful passive income opportunities require work to set up in the first place. You need to write the ebook, or set up the website, or build relationships with other bloggers to improve your online presence. When that work is successfully done, you can begin to realize income based on that work, but you’ll still need to maintain the work you’ve done. You still need to write the next ebook, or continue to maintain those relationships, or stay up to date on your email list and generate content on your website.
Myth #3: Passive Income Is Easy
Many people are willing to relocate to cities throughout the country for better job opportunities. The old canard is that anything that sounds too good to be true probably is. This is very true when it comes to passive income. While it may not be the same level or hours of work that active income streams are, passive income doesn’t just happen automatically, and very few people accidentally become millionaires or billionaires.
The truth is if you want to become an expert at passively generating income, creating the kind of money that you can retire on, you’re going to need to regularly read, study, keep up on changing trends, and experiment with new methods to make sure you’re maximizing your income streams. If you’re passionate about it, it’ll probably feel like a lot less work than a 9-to-5 job, but that’s not the same as not actually working.
Myth #4: You Can Use Passive Income To Generate Income To Pursue Your Passion
Many entrepreneurs approach passive income as an investment strategy that will help them get out of the day-to-day job hustle and begin to follow their dreams. It would be a great idea if passive income really did get you rich overnight.
The truth is that becoming an expert at passive income takes time, or money, or both. It will likely be at least a few years before your passive income streams are more than supplemental. There’s nothing wrong with that – but again, approaching passive income like a get-rich scheme is a recipe for disaster and lost money.
Myth #5: Real Estate Is a Guaranteed Approach To Generate Passive Income
Let’s be incredibly clear about this: there is absolutely no guaranteed approach that generates passive income. None. Every possible approach has pros and cons and needs time spent on learning the ins and outs of the system.
Passive income is absolutely a way to generate supplemental income that can help your business or your household stay afloat and live a little easier. But passive income is not the same as free money. You still need to work to achieve your goals.
What advice would you offer an entrepreneur looking to expand into passive income?