The Truth About Passive Income

Passive Income

Many people have an idea of what passive income is. However, there are many myths that have to do with passive income. We’ve created a few passive income blogs. However, we’ve never gone over what passive income is. We’re going to change that today and attempt to debunk a few theories that are floating around. So, what is passive income?


What Is Passive Income?

To answer this question, I’d like to start off by bringing some misconceptions to light. Many people believe that passive income is something that you get without having to do any or minimal work. I’d like to say that this simply is not true. However, why do so many people, especially those who’re new to this concept believe it’s true. I believe it’s because there are people selling the idea of “making money while you sleep”. While these concepts do exist, there is much more depth to it.

Passive income is money that is consistently coming to you after you’ve either built up a business. Furthermore, you can generate “passive” income through lucrative investments. Passive income can only be acquired after putting in countless hours towards an idea. Then, that idea begins to generate income.

Once this return is generated, you must find a way to automate your idea. This way you’re earning money while spending a minimal amount of time on it. The 4-Hour Workweek further explains this concept. However, I do want to stress that in order to reach this goal, you must put in maximum effort.



For example, how many times have you seen free courses that’ll teach you how to make your first $1,000 within a week of drop shipping? These programs boast that if you do a few steps, you’ll be earning money. Although this may be true in rare cases, sustaining it may be difficult.

In order to truly create a profitable drop shipping business, there are a ton of things that you need to consider. Demographic, market research, ads, making compelling content and building trust, to name a few. Therefore, the notion that you can create something with minimal effort and begin to earn money while on vacation is false.


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Maintenance Is Key

Remember how I mentioned that you’re able to automate your business once it’s grown to generate passive income. While this is true to some degree, there is a whole other side to the coin.

We’ve already discussed that in order to gain “passive” income, you have to create a business. After that, you need to put a lot of time and money into it for the business to grow. In order to keep your business profitable, you’re going need to maintain it. Regardless of what people may think, maintaining a profitable business, especially online, is a daunting task.

You are the heart and soul of your business. This means that if you outsource everything, you’re taking out what originally made your business successful. Remember, things are always changing, especially in today’s society. Therefore, you may be getting passive income from your business one day and see it slowly decline the next. This is where maintenance comes into play. It is your job to see how the market is changing so that you can adjust your business. Doing this will keep you profitable.

Market changes can happen at any time for many reasons. Let’s say the demand for the products you’re selling slows down. This will cause your revenue to decrease. You may have someone who fills out orders and takes care of you’re websites health. However, you will need to dive in and find the source of this decrease in demand.

After that, you’ll need to change the direction of your business. This is no small task and takes many hours to accomplish. If everything is outsourced and you’re barely maintaining your business, it’s doomed to fail. Plus, no one is going to care about the longevity and health of your business as much as you.



Growth Is A Bigger Key

Growth is absolutely essential. There is no way around it. You may have a passive income at the moment. However, if you’re not constantly innovating and growing, your business won’t last. There is always someone who’s going to introduce a similar product at a cheaper price. It’s your job to see beyond the horizon. Once you’re trying to grow your business, you can forget about spending time on the beach.

All your time will most likely be invested in the business to help it grow. This is probably the hardest and most time-consuming part. Although you had to put in countless hours to build the business, growing it is a whole other ball game.

I’d like to show this exert of a conversation Hip Hop artist Kendrick Lamar had with music mogul, Dr. Dre:




Even though this quote was said during a studio session, it still rings true in business. Just think, business are being created every single day. At one moment you can blow up and make a ton of money. However, once other people get in the way or create something better, you’ll quickly become irrelevant. Once this happens you can kiss your passive income goodbye.

This is why growth is so important. When it’s time to grow, scale or even create more compelling content, you’ll be working a considerable amount of hours.



Due to the internet being fast-paced, markets are constantly changing. Furthermore, competition is more prominent than ever. You may be making quite a bit of money with your social media marketing business. However, there are hundreds of people who just bought Tai Lopez’s social media marketing course.

This means there will be people who’re dying to take your spot and will do anything for it. This is why you need to stay on your toes. Yes, maintaining can help you be profitable. However, growing your business will help you earn more money and remain profitable. The key is to stay ahead of the competition. See trends before they happen and capitalize. This is not easy and will take a lot of time and learning. However, the reward is worth the time spent.


Is Passive Income Really Passive?

Passive income is not what many people think it is. It is passive to an extent. However, it takes a lot of initial investment followed by maintenance and growth. You can put the business on auto-pilot and collect money. However, there are times where you’ll need to spend hours growing your business to stay ahead of the competition. This will help you earn more sustainable passive income.

Passive income does exist. However, you won’t be creating a business within a few months and earn a full time living while on a beach. It takes blood, sweat, tears, passion, consistency and time to obtain. However, I firmly believe that if you’re able to remain disciplined and dedicated, you can acquire a passive-like income.


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