As human being you naturally want more of the things that make you happy. One of those things is financial freedom and never having to worry about how to make ends meet each month. Another goal in life is to be able to reduce your working hours so that you will be able to spend more time with your family and be an active participant in your children’s lives. In a perfect world, you would do as little work as possible while earning enough to support the lifestyle that you and your family want. This is where passive income can play a role.
People have been spouting good things about passive income. The internet has allowed people to earn a supplementary income through writing eBooks, doing Clickbank, and earning revenue from ads placed on their blogs and websites. Some even claimed to have quit their regular jobs and have just focused on passively earning enough to support their lifestyle.
Is that really possible or is it just a fairy tale? Here are some reasons why some experts believe that passive income is just too good to be true.
1. Does passive income really exist?
This is the question that is foremost in everybody’s mind. Does the idea of passive income really exist in this world? Is it truly possible to earn money without doing little or any work at all? To a point, there really is passive income such as collecting rent money or earning from investments other businesses. However, it is believed by having little involvement with these revenue streams, you are sacrificing the potential to earn a much higher income. With little involvement comes little control. This increases the risk factors of these streams.
2. It takes more work than you had initially estimated.
Being an internet entrepreneur or a freelancer takes a lot more work than you think. It’s not a sit back and just relax job. The truth is far from that. Those who make a living off the internet may take years before they can get to a level where they can enjoy a regular income from online work. It does take a lot of work to set up a blog or a website, to maintain it and drive enough traffic to it. Building a reputation and status of credibility takes years. If you are selling a product like an eBook, having it on the market is not the end of it. You have to promote it and use some savvy digital marketing to convince people to buy whatever it is you are selling.
3. Some passive income streams need large capital infusion.
Let’s say you want to have to enjoy the freedom of simply collecting rental income and living your life from that revenue. You have to first invest in the property. Buying properties that you can rent out takes a lot of money. You will definitely max out your savings and may have to take out a loan to be able to afford the price tag of these properties. If you want to be a silent partner in a company, you would have to put up a stake in that company. This is not a get rich quick scheme.
4. You open yourself to the risk of some financial loss.
Risk is inherent in anything you do. However, with the idea of passive income comes little control over money matters. You may actually put yourself in a position of higher risk. When you invest in a property, you do not know if five years from, the value of that property will be more than what you paid for it. If the industry tanks, your investment will lose value. For internet entrepreneurs, you might have to give your first eBook or application for free to gain a following. The man hours you spent on that will not be compensated.
5. You can get scammed.
The desire for a get rich quick scheme has opened you to scammers. These people will prey on your dreams and goals. Thus you can see so many passive income ideas on the internet that are cleverly disguised scams. The financial world is riddled with Ponzi schemes as well. It’s a vicious cycle, but that’s life.
What Do You Think?
Do you think that passive income is too good to be true? Have you successfully used a form of passive income to increase your wealth?