Few things sound more appealing than passive income. After all, who doesn’t love the idea of earning a living without actually doing any work? Just about everyone dreams of having their bank balance increase while they sleep, and for millions of people, that dream has become a reality.
When you read that Jeff Bezos, the founder of Amazon, earns a whopping $230,000 every second, it’s hard not to wonder what you could be doing to build your wealth every second of the day. Earning passive income is a great way to build your wealth, but unfortunately, it isn’t always as easy as those multibillionaires make it look. While the entire point of having a passive income stream is gaining the ability to earn money with minimal work, that doesn’t mean you’ll magically start earning money just because you want to. It does take a considerable amount of work and money to get started, but once you are up and running, the rewards can be astounding.
If you are serious about improving your financial situation with passive income, here are five common myths that you need to stop believing.
Once You Set Up Your Revenue Stream, There’s No Additional Work Involved
Passive income is money that you earn in a way that requires minimal daily effort. That doesn’t necessarily mean, though, that you can set up a revenue stream and forget about it. You don’t need to spend 40 hours a week working on a truly passive stream of income, but you usually do need to put in some ongoing effort.
If you decide to buy a rental property and become a landlord, you’ll need to keep up with property maintenance and repairs, get payments from tenants, etc. Even if you hire a property manager, you’ll still need to work with them to ensure that the property is being run and cared for as it should be. Likewise, if you decide to create an online course, you’ll have to be available to provide support when needed. And if you sell stock photos, you’ll need to get out and take new pictures once in a while.
You Only Need a Single Source of Income
When you are trying to build long-term wealth, investing all of your time and money into one income stream is dangerous. Investing in stocks is touted as a great way to earn passive income, but if you put all of your money in a single company, you’ll be in a lot of financial trouble if the prices fall. This is why financial advisors recommend maintaining a diverse portfolio.
This is true with any type of passive income. Instead of relying on just one stream, it’s best to have several different options. If, for example, you are launching a blog, you may want to add affiliate links and offer online courses about blogging. Having multiple streams of income provides a bit of a safety net if something goes wrong.
You Can Get Started in a Single Weekend
Starting a lucrative passive income stream takes time, and anyone who promises that you can make millions overnight is most likely lying. Before you even start the actual work, you need to do a ton of research to discover which option is right for you. Some passive income ideas are better than others, and you need to make sure that you will be devoting time, energy, and money to something that is likely to be successful.
Once you’ve done your homework and come up with an idea, you still need to build the stream. This could involve things like purchasing a domain name, building a website, writing content, connecting with manufacturers, setting up affiliate accounts… The list goes on and on. If you rush the process, you are much less likely to have success than if you take the time to build a strong income stream.
You Have to Be an Entrepreneur
While there are a lot of entrepreneurs out there who are earning passive income, there are plenty of others who lack the entrepreneurial spirit. Whether you are a business owner, a chef, a stay-at-home mom, a web designer, or anyone else, there are plenty of ways that you can earn passive income.
You don’t even have to be business minded. You can earn passive income by simply using a credit card that offers cashback on your purchases or using a rebate app like Ibotta. Entrepreneur or not, there are all sorts of ways to earn extra money without doing a ton of ongoing work.
You Need to Have a Lot of Money
You don’t have to have a lot of money right now to start building a passive income stream that could pay off big in the future. You can start investing in the stock market for as little as $500 to $1000. If you’re dreaming of launching your own blog, you can find web hosting for under $10 a month. You can start building a course or write your own ebook with no upfront investment. No matter where you are financially, there are things that you can do right now to start building long-term wealth.
The Bottom Line
There are a lot of myths surrounding passive income. The reality, though, is that it’s a great way to build wealth and live a life you love – as long as you are willing to devote some energy to getting an income stream off the ground and maintaining it. You can earn passive income while working your regular job, traveling around the world, or even sleeping, but you have to be committed to making it work.
Whether you have thousands of dollars to invest or you’re looking for ways to generate passive income when you barely have enough money to pay your electric bill, there are options that are suited to anyone. Some passive income ideas are better than others, though, so be sure to dedicate some time to research to find out which ones are right for you. Once you get started, you can be on your way to enjoying the financial freedom you crave