The concept of Passive Income, can be explained, using an example of a bank account.
If you invest money in a term deposit, it provides a guaranteed rate of interest. This means that each month or at the end of the deposit term, you will make money for doing nothing. You can say the same about savings accounts in a commercial bank. You invest a certain amount and then after a period you earn interest on your investment. Without doing anything more, after you have deposited the money, you earn new money over time. This money you are earning is passive income.
While you sleep, you are earning money; and in some cases, you have immediate and direct access to it. Think of it like your money tree. You already did the work; planting, watering and now, as with nature, it keeps growing more and more new leaves for you….your money.
Now you are probably not wealthy enough to live off of your investments – few people are. But what you can do is to invest your time (and a little money if necessary) to create something of value that you can sell many times over.
So is passive income, money you make without any work?
Yes and no. This is certainly untrue if you are looking to generate passive online income. There is always some work to do upfront. This may be creating a course, setting up a lead funnel and so on. If you are successful with your passive income strategy, then after a while, your project will start making money without any work from you. You certainly will not have to work as hard as someone that relies on active income. Active income is where you basically trade your time for money. Millions of people do this every day when they go to their jobs.
Overnight success is very rare
There are always exceptions to everything, but it is rare that a passive income strategy will provide you with a lot of
money quickly. One of the main reasons that people give up on the idea of passive income immediately is that they
put a lot of effort into creating a product and it doesn’t sell fast enough. You need to be patient. It could take a long time for your passive income ideas to take off. You will need targeted traffic to your offer and lots of it to make decent money. So the advice is not to give up your day job and wait until your passive income overtakes the money that you earn from your job before you think about quitting.
So is there any risk involved?
It depends on how much you invest to start off. On the positive side of things, creating passive income streams need not cost a lot of money (if anything), so if you do have a few failures along the way, then you can just learn from them and move on.
Why Online Passive Income works
Many people will tell you that passive income doesn’t work and is even a fantasy. But the truth is that many website
owners are earning small amounts up to vast amounts every month. You need to bear in mind that several passive income models can bring you additional revenue. The more passive income streams you set up, the more money you can make. Some of these are:
- Creating your product
- Promote other products as an affiliate
- Google Adsense
- Native Ads
- Selling ad space on your website
And a lot more…
It is very unlikely that if you were to adopt a multi passive income stream approach that you would not make any
money. For passive income to work, you will need to drive as much targeted traffic to your website as possible.
The bottom line is that passive income does work. Like any business model, you will need to test and tweak to get the
best results. It is not a miracle so be careful about the hype. Avoid spending money on anything promising you a huge fortune overnight, via passive income methods. Treat it as a long-term money-making venture, and you will
probably succeed.
Remember, a slow start is better than no start