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Is Passive Income Real?

Wednesday, January 11, 2023

Passive income is a term that is often used to describe income that is earned with little or no ongoing effort. The idea is that the income-generating activity has been set up in such a way that it continues to generate income even after the initial effort has been made. This can include investments, rental properties, and businesses that require minimal management.

The concept of passive income is often touted as a way for experts and business owners to create a stream of income that is not tied to the number of hours they work. This can be appealing for those looking to retire early, or for those who simply want to have more time and freedom to pursue other interests.

However, the reality is that there is no such thing as truly passive income. All income-generating activities require some level of maintenance and management, even if it is minimal. For example, a rental property may require occasional repairs and the collection of rent, and an investment may require monitoring and refinancing.

Furthermore, businesses that are considered as passive income stream for most, such as affiliate marketing, e-commerce, or dropshipping, are far from being truly passive, as the true passive income is not possible without a certain level of automation and delegation, which is possible only after a significant capital, and a consistent marketing effort.

Additionally, many passive income opportunities require a significant up-front investment of time or money in order to get started. For example, buying rental properties or starting a business can be capital-intensive and time-consuming.

Moreover, passive income streams often require a good understanding and knowledge of the field. For instance, investing in stocks or real estate require a good understanding of market trends, the risks involved and knowledge of the industry. Without such knowledge, the chances of failure are high.

Passive income is not a myth, but it's not exactly as easy and low-maintenance as it's portrayed to be. The most successful business owners and experts often work on automating their business and delegating work, so that their income streams become more passive over time. But it is not truly passive and requires a consistent effort to keep it running. It's important for experts and business owners to be realistic about what passive income can provide and understand the effort and resources required to make it work.

One of the reasons why passive income is often misunderstood is because people tend to confuse it with something that takes less time, but still requires effort. This is because many passive income streams are more time-efficient than traditional "time-for-money" activities, such as working a traditional 9-5 job.

For example, consider a business owner who spends 40 hours per week running their business. They may be able to automate certain tasks and delegate others, allowing them to reduce the amount of time they spend working on the business each week. This might free up time for other activities, but it doesn't mean the business is truly passive. The owner is still responsible for monitoring and managing the business, and there is still effort required to ensure it continues to run smoothly.

In summary, passive income is often misunderstood because people assume that it requires no effort, when in reality, it still requires a significant effort but is more time-efficient compared to traditional "time-for-money" activities.

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Hi, I'm
Adam Bonner

Co-Founder of Convertico

I am a customer journey strategist, sales funnel and marketing automation specialist. I bring together my knowledge of offer and asset creation, marketing and building out customer conversion systems, to help experts and business owners generate more income from their knowledge and to grow their businesses. 

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