Passive Income Online: Myths, Lies, and a Strategy that Worked

Passive Income Online
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Between WPBeginner, my Facebook messages, and the contact form on this website, I get at least one email a day where someone asks me about making a passive income online. Having made millions online, I’m still baffled by this concept of online passive income, so I decided to take a look at where these online passive income myths and lies are coming from. After I debunk those, I’ll talk about passive income opportunities and a strategy that I’ve seen working over and over again!

Since we’re talking about Passive Income, it’s best that we start with a definition. According to Wikipedia:

Passive income is an income received on a regular basis, with little effort required to maintain it.

Notice the emphasis on the word little effort (subjective term).

What does that really mean? Are those “experts” talking about online passive income explaining this “little effort” part?

I started to look around for resources that could be misleading people about building passive income online.

After a simple search, I came across a Forbes article about a blog, a Udemy course on “making money online”, and several list articles covering XX best passive income opportunities.

Some of these opportunities included creating eBooks, affiliate niche websites, blogging, membership websites, offering consulting services, building software, putting up website ads, etc.

Having SUCCESSFULLY and PROFITABLY done basically all of the above, let me explain how none of these are passive income, but rather can be great active income sources.

Online Passive Income is Bullshit

Yup I said it. Anyone who says otherwise either don’t understand the concept of passive income or is lying to make a quick buck by selling you one of their products.

Let me explain.

You see it’s not as simple as writing an eBook and it’ll sell on its own. Because in order to sell, you need traffic which requires regular work.

Creating affiliate niche websites and earning money while you sleep can happen, but only because you worked all day writing content, building backlinks, engaging with your audience, being part of communities. That sure doesn’t sound like “little effort”.

Same goes for membership websites, creating software, doing regular podcasts, blogging, and basically any online venture that I know of.

Now don’t get me wrong, you can definitely make money online (lots of it). But like any other business, it requires a lot of hard work, timing, and perseverance.

Passive Income vs Online Income (The Illusion)

I think of passive income like the definition says: recurring income generated with little effort. I have a few passive income sources:

  • Interest from my bank account
  • Dividends and Interests from my mutual funds portfolio
  • NNN lease payments from several commercial real estate properties

These are true passive income sources because they require little to no effort.

So why do people confuse online income with passive income?

In my opinion it’s because of the flexibility and freedom that running your own online business offers.

Freedom #1 – You get to make money even when you sleep. This can be done in other businesses too – just hire people. Some online businesses allow you to do this without hiring anyone.

Freedom #2 – You can work from anywhere in the world as long as you have internet. Meaning you can go on unlimited vacations as long as you work. I call these workations and they’re fun.

When you’re used to of a 9 to 5 grind, online income sounds amazing – and it is!

But it’s not easy and it takes a lot of work.

Those who’re making 5 figures, 6 figures, and even 7 figures a month didn’t do it overnight. They’ve been working hard for years and continue to hustle every day.

I emphasize the word every day because it’s not passive. When you work 40, 60 or even 80 hours a week making a kick-ass living online, it’s NOT PASSIVE!

Heck even when you work 20 hours a week to make a recurring income online, it’s not passive income. It’s called a side job or a really good paying part-time job.

My strategy that works

Over the years, I’ve been blessed to build several successful online businesses.

You’re probably wondering why did I write this long rant? Well for two reasons.

First because I got tired of answering this question. Now every time someone asks me about passive income, I’ll send them to this post.

Second, because I want to better inform new users. Whenever you hear the word online passive income, QUESTION IT!

Ask them about their workflow? the amount of hours they work? Do your due diligence.

You’ll find one of the two things:

Those who are somewhat legit will quickly turn around and explain there is no such thing as 100% passive income. At that point, you know they were just using “passive income” as a buzzword or don’t fully understand the concept.

The others are same-old make money online scam.

I hope this article helped you understand the true definition of passive income, and why I don’t think you can make passive income online.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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16 thoughts on “Passive Income Online: Myths, Lies, and a Strategy that Worked

  1. Thank you for writing this.. i am tired of answering this question over and over again!
    i will redirect everyone asking this question to your post for sure..

  2. Hi Syed Sir,

    After investing around one and a half year in various successful online business ventures, I agree with your views about online passive income. It takes lots of hard work, efforts and time to build a successful online business than usually people think.

    I’m also inquired about these stuffs many times but thankfully, I usually let them know reality by saying straight forward ‘no’ as well as how much hard work I put and what my working hours are ! However, now my work in helping them understand would be easy as I too can now send them to this page. ;)

    Thanks for sharing your experience with us.

    Best regards,
    Rahul Dubey

  3. We share the same sentiments. My friends here in Kenya think that I make money online by simply sitting in the house everyday. I get a good laugh when I see the shock on their faces after I explain the hard, consistent and persistent work that is required to make money online

  4. But come to think of it, do we still have any phrase like ‘passive income’ in modern world?

    I learned from experiences you work hard to get returns in everything you do. For instance the bank interest and others you made mentioned of, you think those are also passive?

    Syed, you saw hell to load your bank account (in which you’re now reaping interest from), so also others. Are you telling me you have stopped saving money in your bank account because of the interest you receive? Everything these days involves lots of hardwork to get returns.

    ‘Passive Income’ never existed, it was ignorantly used rather.

    • Yes, I worked hard to earn the original investment. The idea of passive income is that if I leave that money in the bank — I’ll continue to get recurring income with very little effort.

      That logic doesn’t apply for online businesses because you have to continue to do the work.

  5. Totally agree, but what would you call the income that you make from “previous work” then. Say you work a 9 – 5, and make 700/week. You know that’s always the case, that’s your salary.

    But if you were to spend the same time (working online) writing new content/building trust, and all the other stuff you mention, and the content continues to bring people long after it was published. Then, that content produces income and it’s somewhat “passive” — or what would you call that? Recurring? It is income generated with little effort, especially if it happens repeatedly long after the content was published.

    You keep building the content and relationships, but the value of what you produced remains high for a long time, so in some sense, that seems passive. Especially if you spend time “building it” now and then reap the benefits later.

    Or what would you call that type of income?

    • I understand why you may think that income is passive, but it is not. The truth is that income will only last as long as you keep working on that website. When you stop, it will slowly diminish as your organic traffic will drop.

      However if you keep writing new content, build new relationships that allow you to stay relevant in the industry and get backlinks (in other words keep working), then you will continue to increase your traffic / revenue.

      The exponential growth is due the nature of online business, but it is not passive by any means because it quickly declines should you stop working.

      Now that we’ve established that there is work that needs to be done, let me explain why it is not recurring.

      Recurring revenue is defined as revenue that is predictable, stable and can be counted on in the future with a high degree of certainty.

      That’s not the case with blogs because your revenue is not predictable. It’s actually quite dependent on your search engine rankings which strongly correlates with the amount of work you put in (building backlinks, producing new content, etc).

      So you want to come up with a name for this kind of income? I think it should be called online income :)

  6. Great post!

    I’m 70. Switching from working with clients in person to online. Teaching myself to create websites (WP ET Divi), creating online learning programs, and about to get into affiliate marketing of the parenting academy I’m developing with some experts.

    I built an advertising company for 30 years and discovered the difference between building a business and creating a job from which you can’t get fired. That said, I’m interested in doing things right but quickly, given the theoretical time I have left in this world.

    As I started on this journey the last 3 years, I was seduced by shiny objects and have spent many hundreds on $47 offers that sit silently in my online file. Many will never see the light of day, many will become obsolete before I get a chance to use them.

    So I was glad to read your ‘rant.’ And you have my encouragement to do more.

  7. Hi Syed,

    Nice article.

    Whenever I read such articles or online money making videos / tutorials and what not, I always wondered how I come I am not able to achieve it, maybe I am too dumb to have ever achieved it. As I have been working online since 2010, and so far I never got such opportunity that I have earned money with “Little Effort”, how come they claim its possible, so now I know its just a scam to sell their ebooks, their memberships and so on.

    Thanks for the article, its really really helpful, as now I can focus on my usual hard work schedule and can focus on it knowing its the only way forward.

    Cheers.

  8. Syed, great input. Loved the BS comment as I agree that whenever people hear the word passive they immediately equate it with the following:
    Online Business = Lots of money + hard work
    [- hard work] = passive or little work
    Online Business – hard work = Lots of Money
    In other words Make Lots of Money by having an Online Business that requires No Work form your part.

    • Thanks for dropping by Porfirio and sharing your thoughts. Out of all folks, you definitely know how money is made :)