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Most People Misunderstand Passive Income. It Keeps Them Poor.

by | Mar 28, 2022 | Entrepreneurs


Jerks love to rip apart the idea of passive income.

I should know. I’ve written about it plenty. Some schmuck in the comments always gets their g-string in a twist. I see it on other people’s content about passive income, too. Their criticisms are wrong.

Let me explain so you can earn passive income and eventually reach financial freedom.

Passive income equals survival

Passive income badasses piss normies off.

The thought you can get money to make money, or not have to work as hard, gets the hamsters stuck on the wheel, upset. I sympathize with them.

I thought passive income was garbage too.

So I stayed working in a bank and getting a safe salary. That was until a steamroller came through the office and flattened the incomes of what my boss called “dead wood.”

Passive income isn’t about solely getting rich — it’s an insurance policy to keep you safe during hard times.

The great debate over passive income

The critics hate passive income because they say “everything requires work.”

If it requires work then it isn’t passive, they say.

Take writing online. You can earn royalties from platforms, or start a paid newsletter, or sell eBooks. Each idea requires work upfront, so it’s technically “active” work.

But once you do it for a while a lot of that work starts to compound. You make money while you sleep from the work you’ve already done. Then you make extra money for the new work you might decide to do.

Critics will say “well, that’s not passive income.” BS. It is.

They miss the point

Everything in life requires work.

No one is dumb enough to think they can just sit on the beach and earn millions doing nothing.

This lesson applies to real estate too. Many of the Youtube real estate swindlers tell normies to buy property and get access to that sweet, sweet passive income that’ll buy them a trip to Hawaii and a coconut bikini for them or their partner.

Yes, real estate is passive income. But it requires active work TOO.

You have to learn about how mortgages work. You need to understand interest rates. You have to work out ROI. You have to get good at knowing what locations are a wise choice to invest in. You’ve got to go to inspections of properties. And you’ve got to deal with the dramas of being a landlord.

So the greatest passive income stream in history (supposedly) is technically active. Nice.

Don’t choose lazy

Passive income isn’t about sitting on your ass and getting free money for doing nothing.

The point of passive income is not to work as hard.

The term “passive income” should be replaced with leverage. Making passive income online gives you leverage so the same amount of work produces exponential amounts of money over time.

That’s what happened to me.

I own an online academy. Some of the business is automated, meaning while I sleep students get offers or opportunities to bundle products — passive.

But when I launch a new course it requires a lot of active work upfront. Some of my courses have live workshops too. They require active work.

If I programmed my brain to hate passive income and think it was impossible, I’d never have found this life-changing opportunity. I would never have learned that my family roots in traditional education had relevance in my life.

Expect to work. Some of that work will make you money while you sleep.

Learn to love work

Active work scares some people.

They want passive income because they hate what they do to earn a living.

Not me.

I never want all my income to be passive. I like waking up and sharing ideas with students and writing online. It’s my version of freedom.

Just like school taught us to hate learning, traditional jobs have taught us to hate working.

The advantage of work you do online is it can help you love working again. You can see it as art, not work.

Using passive income to become wealthy

Not understanding passive income keeps you poor.

Passive income should be the foundation of everyone’s income. Otherwise, you put your hands in the mercy of a corporate beast and hope they don’t eject you from next fortnight’s payroll.

I’ve been close too many times to losing my one income source. That’s why I became obsessed with learning about passive income.

You can learn about it on Twitter, Youtube, or Reddit by simply searching for it.

I find Ali Abdaal has the best advice on passive income and I watch everything he says about it to get ideas. You can too.

Closing Thought

Passive income is just a label.

Don’t get caught up in petty definitions that make you miss the bigger point and lead you to become poor.

Passive income can change your life. It acts as an insurance policy. It allows you to do less work. It gives you leverage online. It adds diversification to your income streams in case a big scary recession happens later this year.

Everything requires work, so nothing is 100% passive — get over it!

Use the 80/20 rule: Go from 100% active income, to 80% active income and 20% passive income. That’s how you get started.

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