Is Passive Income Just A Buzzphrase?

Yes it is something that can be done, but not in the way people think

To me passive income is taking the time to create a product and write the copy. Then putting a JV Broker in charge of setting up my JV deals for automated traffic and sales. Then paying my wonderful support team to handle support.

So once the work is done and the right people are in place the income is generated without much else effort on my part.

I do have to check in on things and if a problem arises I have to tell people how to handle it, but I would say my business is 95% passive.

I have 4 passive income methods.

I do see your point, though, Luke. (And it's an excellent post; very thought-provoking.) In my opinion, a lot of the so-called passive income models are just hyperbole. I mean, even if you have to outsource a method, you still have to oversee the employee, monitor them, pay them, reply to emails.

Only way I've ever attained passive income models has been twice by luck, once by thinking out of the box, and once by reworking a method given to me.

Of course there's real passive income. Can you get that with online marketing? Of course. When you say the guy handing your fiverr gigs screwed up I think you got that wrong. You ruined that for yourself by not paying closer attention to what he was doing. If you want truly passive income you set a business into motion and then hire people to run it for you.

Look at all the fast food franchises in the world. Some franchise owners have dozens of outlets. And many of them don't go near them. They hire the management out and collect checks. And that's just one example. There are hundreds of thousands, if not millions of people that collect passive income.

Can you run an online business that way? Of course. It takes planning and and excellent management. There are lots of companies that specialize in offering business management services.

It can be a passive income, if you earn lots of money and put in your saving account, earn interest rate on your savings...

Make a ton of money from your online marketing efforts and invest them in mutual funds and dividend paying stocks.

To have life changing passive income though, you'll need a large amount of money to put into investment vehicles like this.

This is just a couple of many options you would have, but that is true passive income without having to work for it.

Just money making money.

People don't realize just how hard it is to create passive income.

It is definitely true that there arent "true passive income". There is however a marketing model called network marketing or multilevel marketing aka mlm.

Its not for everyone and definitely not easy but it is a simple approach to create a downline.

Once you found a few diamond in the rough you will get commissions from there on which I do consider passive income.

Passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of "unearned income".

In one of my networking business I have made a pretty amount of students I help sometimes just leads nd they provide me this passive income monthly

And the more I genuinely help in my business the more I seem to make.

Passive income is really just having a system in place to handle conversions automatically, and maintaining traffic on a daily basis, wether that be with SEO or PPC, the hard part is to master the traffic.

There are other ways too of course, but this is the simplest way to do it if you ask me, not easy, but simple.

One source indicates that passive income is this:

What Is Passive Income?

A little further down the page there, he talks about how passive isn't truly passive in that you might have to do a little effort such as checking emails.

I don't think it is absolutely possible to get 100% passive income with zero effort to maintain it. And, passive income is not guaranteed for life (unless it's an investment with a bank). And, even if you have an investment that is paying off, you are actually tying up your money in an investment (so that you can't use it otherwise) so that you can get a little percentage of money off that monthly/yearly.

There are wins/loses for every scenario. But, just getting as close as possible to no work is likely the best case scenario for most.

Yes I developed a passive income when I was bum marketing back in the day - but the traffic died out and in turned into past income.

Even if you hire someone to manage the process you've got to poke your nose in it once in awhile to make sure the person you hired is doing it right or not slacking off.

Don't think of it as passive and non-passive. Think of it as the return gained for the time spent.

If you have a business model that requires a lot of your time and makes $X/month, figure out what you're making per hour of your time spent.

Now, take that system and outsource pieces so that it takes less of your time. Your net income may go down because you've increased your expenses but it's taking less of your time to do it so now you're making more money per hour of your time spent.

That freed time can be invested in growing the system to improve the net return or in building another system.

Eventually what you were doing all by yourself for a return of $5 per hour of your time could be making a return of $100 per hour of your time and leave you more hours to invest in other things.

There are sites I've set up years ago that still make money although I haven't touched them in a year or more but even then I'd call that semi-passive because if you don't go in and update and maintenance the content, the links, etc, the results start to degrade over time.

Passive Income is not just a buzzphrase....I can understand that you will say it in a positive manner when It is working for you...

Well....If you have an investment and that is earning money at the end of a certain period of time...then it is certainly a passive income....

However, when it comes to passive income in the online world....then I agree with you with some extent....that it is not entirely passive.....You still need to take a regular view on your money system working properly or not.

For me, It is a passive online income stream....if it is giving me freedom to work with my own pace and time....with my own degree of effort...for earning a decent amount of money....

I think.....it will be different for every other person....

The only way I can think of that would be truly "passive" is collecting royalty checks...

I remember watching a show called 'How I Made My Millions' and a story that sticks out the most to me is the guy who invented the hugely successful 'Super Soaker' water guns...

He made his millions by getting I think it was either 1% or 2% on the gross sales of Super Soaker water guns...

Another possible way to possible "passive income" is to invest in business(es) as a "silent partner" but the drawbacks to that are that you probably have to invest a large sum of money AND trust that the person(s) running/handling the business know what they're doing and will be successful...

Is passive income possible? Yes. There is typically an action that needs to be taken in the beginning to set it up and there may be the occasional action of checking in to make sure that things are going smoothly.

There are was to make passive income online, if you keep those two things in mind. Ex. Write a book, set it up on amazon and do the initial promotion. You may have to send a boost of traffic occasionally if sales slow but other than that it is passive income.

Passive income exists. Passive income is simple to attain.

Here's my own definition of passive income:

1. You set up a moneymaking method.
2. It makes profit for an extended period of time.
3. No involvement after setup.

You'll have to excuse me if that isn't the formal definition. I must admit, if ever we covered this at university (I doubt it), I don't recall; I also don't recall ever feeling the need to look up a definition since.

The problem in my experience

I make more money when I have involvement in a moneymaking method. That's the key point I want to make.

Ah, but wait a minute . . . you're forgetting scaling up, GRM. Nope, thought of that. Of the passive income methods I use, I've scaled them up as much as I think possible. They do okay, but still not as much as some methods where I'm involved.

Which leads me to my overall point.

Passive income, the buzzword, sells e-books. I guess. I mean, I've never thought about it until today, but it makes sense, right? Anyway . . . onto my but. It sells e-books, but . . . should it be something you dream of attaining? In my experience, no, not really. Not, at least, until you have major capital to invest, because in my experience the passive income models require it; the really good ones.

I'm rambling. Sorry. Bit tired.

If you think about it, there are plenty of such models (in a minute, I'll brainstorm a few), but barring the 4 I use, I discard every other one simply because the profit-potential isn't enough.

Let the brainstorming commence....wayyyy.

1. Article Marketing & Syndication.
2. KDP (Kindle)
3. Many Viral Endeavors (here, people do the work for you, of course)
4. Autoblogs
5. Message Board Article Marketing
6. Video SEO
7. Many JVs
8. Authority Site JV (User-Submitted Content, like maybe Cracked.com)
9. Image Stock Media (ala iStock)
10. Pay NASA To Put Your URL On The Moon.

All of those things I could possess without requiring any of my involvement; yep, even setting up and owning a site liked Cracked.com. Edit: I don't own Cracked.com. Just an example.)

So far, I just do better when I take part. So far . . .

Yes... there is such a thing as passive income. Most people simply don't
know the formula or the basic requirements for developing it.

Passive income requires leverage. There are only three things in life
that are leverageable... time... money... labor.

Learning to leverage one of those will earn you a decent income. Learning to
leverage two of the three will enable you to live a very comfortable life. Learning
to leverage all three simultaneously is where passive residual fortunes are made.

I collect a very nice monthly check from a network marketing company I haven't
actively worked in about 20 years. Most of my downline have no idea who I am.

Yes... there is such a thing as passive income.

The only people who say passive income doesn't exist are those who have the wrong interpretation or definition of the phrase.

No one ever said that passive income has to be strictly 100% hands-free in order to qualify as being "Passive." It just means that indirect, irregular effort to maintain it is sufficient, as many of you have already pointed out.

That's the main problem with many people. They are under the mistaken assumption that, "if you have to do some work, then it's not passive." It's all very black and white with them.

I've said it before, I'll say it again: Wind Turbines!

After the initial set-up the maintenance is virtually zero. 25 year warranty.

When the wind blows they generate income. Tell me, how is that not passive?

Yesterday I was at a museum in Cleveland, OH. The Western Reserve Museum.

At lunch, I walked to the park. Saw a hot dog vendor, talked to him. He was a disabled vet who has been doing this for some time. Does NOT own the cart, just does everything. His boss, whom he loves, pays him a hourly rate and a per purchase bonus. Enough to keep him working for the last several years.

Across the street, the Wade Park VA, another hot dog guy, only he owns his cart..

He too has been at it for years. M-F 10 to 2 ish. Four seasons. But lots of time off in Winter.

One guy a hands on owner, another, ABSENTEE.

Another story, his name is Steve DiMarco, a businessman in Rochester, NY. Steve has owned businesses and franchises. He told me about his secret little cash cow, which turns out to be a pretty well known secret for many people.

Steve bought 10 Nut Warmers (actually LEASED them, so no out of pocket expenses). He placed these at golf courses and bowling alleys. He did a route on Saturday morning for a couple of hours. His average weekly income averaged between 60 and 120 dollars per week per unit. He had 6 of them in force, the other 4 at his own Nut Cart stand in a arena. He hired people, and at one time had 16 employees.

The only reason he went to the golf course or bowling alley was to stay in touch with the people there, a high school kid could have filled the nut warmers with the pre packeaged nuts.

So, bottom line. 600 dollars in cash per week for a couple of hours of "work". It fits my definition of passive income. Although, when I was in Real Estate I did participate in a Partnership, we had a general partner who did all the work, we just split the profits.

Lots and lots of ways to get passive income, both the IRS defined one, and my work a few hours to get a nice chunk of change.

ANY Warrior could set something like this up, "work" a few hours on the weekend and have the money they want to invest in IM. What many Warriors lack is an understanding of the real world, and how it operates...

where LEVERAGE (as noted in a thread) and LEASING and partnerships and all sorts of things live....

and some APPLY real world methods to this Online or Internet Marketing too. I do think PASSIVE INCOME is a Warrior Forum buzz word...not much real world experience behind how it works.

But, however YOU define it, make it work for you.

gjabiz

Passive income must be intentionally planned for, with every strategy one pursues in IM or elsewhere. What most people do is adopt a very time intensive, active work earning method that requires their direct involvement at most critical steps, then wonder why they are not achieving passive income.

Kiyosaki, in the Cash Flow Quadrant, described this problem of "S" quadrant people (self employed business owners) trying to build to passive income when all they've done is set up a system where they own their job. They run their own service, but still commit themselves to be the direct laborer delivering the service. They ARE the job--if they don't work the PC each day, or come to their office, no money gets made. Passive income involves creating a "C" or "I" quadrant business system where the work is automated, delegated or outsourced, so one does not have to directly work on it much of the time.

While active labor is necessary at first to set up the passive system, or serves to gain immediate earnings or 'working capital' to sustain one for the interim, the long term goal should always be passive income. Even non-ambitious wage slaves who pursue a normal job career understand this concept when they pay into an IRA. Those in business just want the passive earnings to happen before the retirement years.

So, Luke, does all this info make you think about retrying that Fiverr gig?

Find a way to do quality control on the process and you could revive your set up with multiple Fiverr gigs.

Well, I earn money passively. Meaning whether I'm working or not, money rolls into my bank account. But that doesn't mean I can stop working. I work my butt off every single day. And if I stop working, my earnings will eventually dwindle down to nothing. It might not happen for quite some time, but it would certainly happen. So I would say "passive income" is entirely possible. But making money without working your butt off is totally unrealistic.

Some awesome suggestions in this thread

Also, to the guy who said wind turbines. yeh, that's pretty good. My parents built there house whih is powered by a wind turbine. They don't sell energy back to the grid, but if they did it would be a good passive income.

Honestly, when it comes to my money, I don't think I could ever be 100% passive. There is always going to be some sort of checking in to make sure things are going well or as planned, etc. Whether that is checking in on management, numbers, a VA, etc. But doing 5% of work while you make a living is much better than anything else I can think of.

my three grandchildren have a totally passive income, they got their granddad to set the site up, then put in a manager who gets 80% of the profit.

They then sit back and take 20% totally passively.

If you did that on several sites you'd make a very nice passive income

Some income that I can think of where "passive income" is concerned...

1. Rental Income - Hire an estate management company to handle tenants issue (eg. repairs) and this can be almost handsfree passive income. Caveat: You need to own the property or collect a monthly rental that exceeds mortgage + estate management fee.

2. Interest Income - Self explanatory. Deposit $45,000 in a FD account 4% p.a. and you can be looking at $5 passive income per day. Chump change as you can normally earn more than that if you invest your $45k in a business or creating a product and sell. But, this is passive income that we're talking about here.

3. Investing For Dividends - Again, self explanatory. You invest in solid companies and collect dividends quarterly, semi-annually or annually. I would look into index fund though. Where I'm from, there are banks / brokers that offers regular savings plan that you can start as low as $100 per month which can be used to purchase small quantity of shares from index funds or blue chip companies.

So, is passive income just a buzz phrase? No, I don't think so. But, many fail to realize that it takes time / money / labour to create the passive income.

It's very possible to set up passive income streams because it boils down to how you set up your business structure.

It's the difference between being self-employed versus being a business owner. Some business owners choose to outsource everything, including hiring a business manager to keep an eye on things.

For some business models, you do a lot of the hard work upfront, set the right people and right systems in place, and then let the money roll in.

From experience, it's not an easy thing to do, but it's very possible.

RoD

In my offline and online experience, "passive income" equates to what we call an "annuity" in the financial services. It takes work (money in the case of an annuity), and then based on that work, you get paid on a regular basis for a certain amount of time.

Passive income takes work to set up. You can do it yourself or you can buy the work, but it takes time and resources. I think most people understand that, but what they often forget is that unlike an annuity, it also takes time and resources (usually) to maintain or increase that passive income.

Yes, there are books and songs and other types of products that generate income with seemingly no effort on the part of their creators. That's so rare and takes SO much upfront effort for many years, an easier route is to commit to a small amount of "maintenance" work and see your work pay off with regularity, even increasing.

Clearly there are methods like eBooks/Kindle, YouTube channel advertising, CPA, etc that earn substantial residual income for a long time with low maintenance work. Pick the proven channel that you're most interested in, focus on it, and reap the rewards.

Good luck!

Maybe the more ideal solution rather than completely hands off/passive income is to find a way that is half the work of active income. In this situation active income would be money that is obtained from a regular, real world job or services type business or from a gig site where you complete freelance work for others.
One type of nearly hands free business is an online retail store. Other than advertising, you would simply login daily to ensure that orders were filled (requires a few mouse clicks) and sent to customers. This would work best if you were a drop shipper, dealing with other suppliers rather than packing the items yourself. It's not passive as in you still have to work some and it's not residual but it's less work and still earning very well.

I don't think anything is truly passive. How can it be so? Let's say we have a blog and we fill it with great content, promote it highly, monetize the blog throughout, there's high traffic to the blog with lots of conversions, making $xx,xxx and then we go off for 3 to 6 months on a vacation without doing any work on the blog or without hiring any other people to work for the blog. Will it be in the same state after 6 months or make the same money after 6 months. Definitely not, so I think there's nothing called passive income.

In my mind... passive income is what you make of it. Can you go on vacation for a weekend without monitoring everything in your business? If yes, and your business still makes money.. thats a type of passive income.

But this idea of taking 15 minutes to set up a business and walk away... 100% a pipe dream.

Thanks!

Jeremiah

One of my business' is about as close to passive as i can get it. I literally spend a day a month on the business for 11 months of the year and probably a fortnight once a year. It ticks over nicely and brings in decent amount of money. The products never need updating and every year there are thousands of new customers wanting the product.

I've just about got the ppc sorted so dont need to test that anymore and have the autoresponder sequence close to perfect. I could or should spend more time on it but a its working fine i see no need.

It took two years of testing and trading to get to this point during which i have expanded from one product to 10. Each product took time to put together to make sure that i was offering quality to the market but still only cost about $15 to produce (if you exclude my hourlie rate).

So yes its possible i could actually leave this to run on its own and it would continue to generate income however i know that when i get involved i can drive performance up at key points. This i believe has only been possible because the business was created to run this way in a very specific niche in my choosen market.

The answer then for me is with planning and hard work you can all but do it.

It really depends on how you define "Passive Income".

Setup + Forget = Passive Income or Setup + Less work= Passive Income.

Look at WF, it is a passive income.