According to the IRS, there are three categories of income: assets, liabilities, and portfolio.
Active is what it seems. You do income-generating activities from which you earn income.
Portfolio is also what it seems. You invest money in things like stocks, real estate funds, or other investment vehicles, and at best, your investment produces profit or income.
Then there is passive income.
The holy cow of network marketing companies and continuity/membership site experts.
The goal of every kind of overworked, low-income, self-employed person praying for a miracle.
Passive intimacy without work. You, on the beach, cocktail in hand, checking your PayPal account for sales every few hours. Or, better yet, you, on your couch, in your pajamas, watching GOT or House. Again.
I’ve googled a lot of content on passive income and while there are some solid possibilities out there, for example lending money for interest, many take a solid idea and execute it right away, like this one that admits you have to work ahead to get there. to be passive: “first you need to get off your ass and do something crazy, like write a quality 20,000 word ebook (crazy, not passive lol)”, but this is where it gets crazy: “but then you can sit back and enjoy watching PayPal sale messages pop up on your iPhone every morning as sale after sale happens…continuously and without any extra work. That’s really good stuff flavored with passive pina colada!”
There are some seriously delusional thoughts.
Let’s look at digital products. You write or create it once, set it up on a landing page, connect the cart, drive traffic, and head to the beach to pick up your moolah.
A well-done e-book or virtual program requires hours of research, writing, production, formatting, etc. Those hours cost your time, and during those hours you are not making any money. But okay, we can all agree, there has to be work on the front end, right?
Correct, but it does not end there.
Now we have marketing. If your landing page is optimized, your copy is great, and your ads are spot on (something that requires daily tracking, by the way), and your ebook, product, or program is targeting the right audience, you could see recurring revenue from this. evergreen produce.
Phew. We’ve done a lot of work so far and there are a lot of “if’s” from a marketing perspective. (If your landing page converts because you have conversion copy and the page is SEO optimized, and it targets an audience that wants what you have from you, and so on.)
And the marketing doesn’t stop if you want the sales to continue.
What about managing affiliate partners, returns, customer service? Even outsourced, there is still active participation.
This type of income, as you can see, is far from being passive but leveraged.
Leveraged is good. This is how businesses grow and, in our case, entrepreneurs, how we get out of the trap of capping revenue on the fee-for-service only model.
I don’t want to bring Debbie down, but part of my commitment to my clients and to you, my readers, is to bring the truth; illuminate traps, false gods, and naked emperors.
Am I suggesting not doing an e-book, virtual show, or continuity show? NO! (Well, I might in the case of the membership/continuity program, and I’m getting some experts together to break down the good and the bad and who should and shouldn’t and when. I’ll have details next week here.)
I suggest you examine your attraction to a marketing idea before you jump in. No idea will “save” a shaky business – sales is the exception here – and an idea that promises to “change everything” in your business is not likely to deliver on its promise. What it really requires will only be found in the type of mouse – that fine print at the bottom of web pages and print ads that give you the disclaimer.
Always read the type of mice.
And start researching leveraged income streams. Find out what it really takes to set one up and get started. It may not be passive, but it is income that requires less of you one to one or one to many. And that means more time to work on your portfolio or pina coladas.