Many people seem to believe that passive income is a myth.
It doesn’t seem that way to me. Every single morning I get to wake up and enjoy the wonderful feeling of looking at how much money I made while I slept. I get to do the same thing after every weekend and every holiday.
So that hardly suggests that passive income is a myth.
But in reality, the issue is much more nuanced, and that’s what this article is all about. We’re going to look at how realistic it is to establish sources of passive income, and examine some tried and tested methods.
Money while you sleep CAN be a reality, but it usually comes with a LOT of hard graft.
Easy Money While You Sleep? The Harsh Reality
Broadly speaking, there are two types of passive income:
Passive Income from Investments
Some people are fortunate enough to earn passive income from investments, such as property and share dividends. Others earn it from things they’ve created: websites (like this one), books, courses, products etc.
The crucial thing to think about is just how passive the income really is. Dividend income from shares you own may be truly passive. But let’s say, for example, you own a property that you rent out as an Airbnb.
From the outside looking in, that could seem like easy money, but there’s the maintenance, the legalities, the cleans between guests, the unfair negative reviews. If you own a handful of such properties, you could well find that maintaining your “passive income” is a full time job. That’s not passive at all!
And let’s also address the fact that you probably had to work very hard to buy the investment property or the shares in the first place. Of course, that’s not always the case. Some people are born into wealth and may even have passive income before they’ve done a moment of work – but they’re probably not the target audience for this article…
Passive Income from Products and Projects
Similar caveats apply to the type of passive income I make myself.
I make passive income from this very website, and from others I own. But building up a money making website takes a LOT of work. For each new website project, I work thousands of unpaid hours and write hundreds of thousands of words before I see ANY meaningful income. Furthermore, for every one of those hours, I have literally no guarantee that the venture will work. For every successful site, there are far more that fail.
I also make passive income from a book I published. That feels rather different. It brings in money every month, even though the project was finished nearly ten years ago. I don’t think I’ve had to spend any more than a couple of hours keeping tax forms up to date since the book was published. As such, that kind of income does feel truly passive.
BUT – and this is the important thing – my wife and I had to work on that book for months before it was ready to publish. We had to do the draft, the edits, the cover design, the formatting, the initial promotion. And, just like the websites, we had to do all of it without any guarantee that we’d sell a single copy. (Thankfully, we’ve sold thousands – in fact way more than we ever expected to – but we’ve also had projects that have unexpectedly flopped.)
The message here is a simple one: passive income is NOT a myth, but unless you’re lucky enough to be born into wealth, you rarely earn massive income without a LOT of up-front (and often speculative) work.
Why Do People Fall For the Passive Income Myth?
Despite the reality described above, many people still seem to think that there’s passive income for everyone. They think that if they keep browsing the web, the “secret” will eventually reveal itself.
Over the years I’ve had loads of emails from people, literally saying things like “I want to know how to earn passive income, I need around $2000 per month.” (These emails almost always feature atrocious spelling and grammar, and rarely say “please” or “thank you,” but that’s for another rant!)
While it’s easy to sneer and wonder what planet these people are on, it’s not quite as straightforward as that.
The internet is littered with websites whose entire business model is based on convincing people that this stuff is easy. I started HomeWorkingClub specifically to provide a more realistic alternative to those sites (more on that here.)
There’s a much repeated theory that “the only people really making money online are those teaching others how to do it.” That’s really not the case, but it is fair to say that the truth is somewhere in the middle.
It’s no wonder that sites that make the lofty promises are popular (and often more successful than this site!) After all, “passive income is possible but it’s really hard work and you may well invest loads of time and still fail” isn’t as compelling as “Make money while you sleep! Get started today!”
WIth this in mind, I don’t judge the people still fruitlessly searching for “the secret.” Lots of skilled marketing people work tirelessly to make people believe that secret exists.
How CAN You Make Passive Income?
With the harsh realities out of the way, and the knowledge that the answer to “is passive income a myth?” is “no, but…” let’s move on to the more actionable part of this article.
Of course, the easiest way to make passive income is to be born into wealth and handed a bunch of shares and a property portfolio on your 18th birthday! But let’s assume that doesn’t apply to you.
Here are some ways to establish the kind of passive income I have, provided you’re prepared to do the up-front work involved.
Authority / Affiliate Websites (Blogging)
There is a reason why most home working sites include content on creating blogs: Many people make an extremely good income from them, and you can blog about anything, which means you can potentially profit from your hobbies and passions.
Just how “passive” this kind of income is is debatable. Running my sites is pretty much a full time job, although I also manage to make time for freelance work. But successful sites do still make money “in the background.” I’m able to walk away from my sites when I’m on holiday, for example, and they continue to earn.
Here are some resources to check out:
- Our article on how to create a profitable blog.
- My Patreon Blogging Group. This community follows the progress of my latest new blog. I share video tutorials, updates, and explain exactly what I do and why, when getting a new blog off the ground. I’m even open about the traffic and income. If you’d like to join, you will gain instant access to all of the material I’ve already created, with more added every month.
- Michelle Schroeder-Gardner’s Making Sense of Affiliate Marketing course is created by a blogger making over $100,000 per month (a lot more than me!) Check out my review here.
As I said earlier, the income I have from a self-published book feels truly passive now, and writing a book is another way to earn from something you enjoy.
Publishing a book very much “front loads” the effort. Once a book is “out there” you really don’t have to do much, although there is plenty of marketing involved. While this is all good from a passive income perspective, it also means you need to be willing to “take a punt” on your book being a success – and, in reality, comfortable with the fact it may not be.
- My recent guide to self publishing a book – based on a second book I’ve been working on recently.
Create Courses and “Info Products”
Course creation is booming right now, helped along by a huge trend for home learning that shows no sign of abating. Once again, it’s a way to make money from the things you love. There are successful course creators out there focussing on everything from cupcake baking to dog training.
In terms of where this falls on the “passive income scale,” I’d say it’s somewhere between blogging and writing a book. As regular readers will no doubt know, I have my own course called Freelance Kickstarter, offering a realistic introduction to the world of freelancing. I spent many months working on the course (as I discuss in this podcast episode).
As with many passive income ventures, I had no idea how successful my course would be, and had to do all of that work with the hope that it would pay off. Now the course is complete and selling, the income does feel largely passive, but not entirely. I provide support to the students, have to deal with billing and accounts and – most significantly – I have to ensure the course is kept up-to-date and relevant.
Creating courses is not “easy money,” but it’s an exciting option – and your course can be about literally anything.
- Teachable – The platform I use to create and deliver my course. The company provides some GREAT training materials via it’s “Teachable U” section, available to all subscribers, taking you right from coming up with a course idea to marketing and selling it.
Other Passive Income Ideas
Above, I’ve concentrated on the main ways that I, personally, earn passive income. Very much in the spirit of HomeWorkingClub’s values, I prefer to focus on things I know are tried and tested.
Having said that, there are many other ways to earn passive income. Here are a few you may want to think about:
Renting Out Your Car / Driveway / Parking Space / Spare Room
Very much the Airbnb model, this isn’t entirely passive, as you will need to handle bookings and customers, but many people make “passive” income from renting things out when they’re not using them, and there are dozens of apps and online platforms to facilitate these things.
Building a Patreon Community
As I’ve said above, I have my own Patreon community for aspiring bloggers. However, I wouldn’t describe mine as a passive income source – I create exclusive content every month specifically for my group.
However, many creatives, artists and musicians build a community around what they do, offering their fans early access to new material in return for a subscription fee. We could debate how “passive” this is all night long, but it’s an option.
Design Clothes and Merchandise
Another passive income option where you do the work “up front.” Sites like RedBubble and Society 6 allow you to design everything from T-shirts to tote bags, and then earn money when people buy them. The platforms handle everything from production to order fulfilment and customer service.
All you really have to do is the designing, although in reality you’re only likely to sell a lot if you also find a way to effectively market your items.
Sell Stock Photos
Yet another option for those seeking to make money from a hobby. There are lots of sites that allow you to upload photographs, and you’re paid a commission if people choose to buy and use them. Once again, there’s up-front work in taking and uploading the photos – but for those who see photography as a hobby, it probably won’t feel like work.
Find out how to sell your photos online.
We’ve really only scratched the surface in this article. There are plenty of other ways to earn passive income, although many of them do require you to have some money to invest in the first place. I’ve intentionally concentrated on things that require time and effort rather than money.
So, after all that, do you believe passive income is a myth? Let me know in the comments.
Founder of HomeWorkingClub.com – Ben has worked freelance for nearly 20 years. As well as being a freelance writer and blogger, he is also a technical consultant with Microsoft and Apple certifications. He loves supporting new home workers but is prone to outbursts of bluntness and realism.