If You Want to Create Passive Income — Read This Warning First

Active Income

You actively work a job in order to receive income. For example, you work a 9-to-5 job Monday to Friday and receive $500 to $1000 every week.

This income is active, it means trading your labor, skills, and knowledge for the money you make.

This is the most common way for people to make money and support themselves and their families.

This is the strategy that over 90% of the population uses to make money.

Is There Another Way?

People often refer to a way to generate revenue where you don’t trade your time and labor for your money.

This concept is passive income. And it is a highly misrepresented notion.

Passive income is infamously known by the quote: “make money while you sleep”.

The way to do this simple. You must put systems in place that, once they are set up, will cha full-time job.

That being said, you’re gonna have to work your butt off to get there. The only real way of creating truly passive income is from dividend investments. THese truly take no recurring work on your end.

What Passive Income Really Means

Let’s get one thing straight. Passive income is rarely passive. It often takes years of hard work to achieve any form of side hustle income. What passive income really means is scaleable income.

When you have a steady job, your income is relatively consistent, save for a raise or promotion. Passive income really means your income is scaleable to a level far beyond that consistency. Passive income still takes continual, and consistent hard work.

Is There Truth to Passive Income?

Of course, passive income in theory is different from active income. However, I will always prefer to call it scaleable income.

Here’s what I mean. Let’s say I produce an investing course that I record and sell online. I do not have to actively teach people every week for multiple years as a professor does. Therefore, all the effort is done and I don’t have classes every day. However, I now have to spend hours every day marketing the course, dealing with customer support etc. This is why things like this aren’t really passive. Because they always require more and more work.

It will take consistent work

It’s important to remember that setting up scaleable income systems can often take a tremendous amount of work, time, and effort.

There’s really just no getting around that. When I first started hearing the buzzword passive income, I always dreamed of building something for a few months, selling it, and having truly “passive income” pour in every month with no additional work because I front-loaded the effort.

After personal trial and error, that’s sadly not how the world works.

I do, however, highly recommend you pursue a stream of scaleable income. Something that is not tied to your day job that will probably make you a lot less to start, but has the potential to earn you a lot more in the future.

“The average millionaire has 7 streams of income”

I’ve taken this quote to heart and built out a personal roadmap for myself. The goal is to add an extra stream of income each year. Right now, I have one — it’s my job. In the future, I’d like it to include dividend income, real estate investments, a well-developed side hustle, and much more.

All these things will actively take work every week to build, and maintain. However, these things are also highly scalable. Scaleable income means making your money work for you.

Check out my other blog post on Credit Unions vs Banks and how the right decision can impact your life.