There’s No Such Thing As Passive Income
Passive income is a lie told by people who want to sell you something. The truth is:
If you’re not improving your product someone will eventually build a better one. If you’re not marketing your product eventually everyone will forget about it.
There’s a corner of the entrepreneurship community that’s obsessed with finding the passive income lottery ticket. The books The 4-Hour Workweek by Tim Ferriss and Rich Dad Poor Dad by Robert Kiyosaki make a killing off of convincing people that they can earn a comfortable living just by using an internet connection for an hour a day from a remote location in Bali.
Reality didn’t work out that way. After several serious attempts at starting a passive income business, anyone will learn the bitter truth. There is no such thing as a business with passive income.
When people say “passive income” they usually mean “leveraged income” or “residual income”, which means taking a risk and paying a large price up-front (in terms of time, effort, or money) with the hope of reaping disproportionately large ongoing rewards down the road.
Passive income gurus like to describe it as a money machine.What they don’t to tell you is that even after the initial build of your machine — the work has just begun.
Next, you have to market and sell that product over and over again otherwise it stops collecting you money.
Plus you will have to learn new technologies or invest in new tools along the way to stay relevant.
Additionally, you will have to provide support to your customers.
And that’s all assuming you did the initial research to determine if what you’re creating has value and market fit — otherwise, you’ll be trying to make passive income off something nobody even wants.
No matter what, you have to do the work.
“If passive income is a weighted ball, a traditional job is a weighted cube. Cubes cannot build momentum. You stop pushing, it stops moving.”
— Megan Holstein
Harsh Truths of That Will Set You Free
This may seem disheartening — your dreams of living on the ocean in the Maldives will never materialize — but this is actually good news, for a couple reasons:
- Once you accept the cost of your dreams is hard work, the world is your oyster. There are very few things you can’t achieve if you are willing to put in the work.
- What brings us happiness and purpose in life isn’t bathing in our pleasures, it’s seeking meaningful work. The most self-actualized people are those who seek out challenges for themselves and conquer them.
What’s special about entrepreneurship is not that it allows you to stop working altogether, but that it allows you to work when you want, on your terms. There is no greater freedom than that.