If you have been reading finance books, or listening to financial coaches, you must have heard of the word "Passive Income". You see, it has been seen as the holy grail for personal finance. When you ask someone for the best way to have increased income, you will be told passive income, the best way to earn money without doing anything.
People have glorified passive income but for me, and I am trying to understand if it truly exist. I am not saying that there aren't ways of making money asides from the standard 9 to 5 job but most passive income strategies that are discussed are usually misrepresented.
Passive income is usually used to represent anything that is self sustaining over the log run after it has been setup as it doesn't require the active involvement of the person thereby giving the person more time to hang out, travel, and do whatever you want but this isn't true. When people mention passive income, they are either referring to investment income, or entrepreneurial income and when these approaches are discussed, it is important to know that these passive ways of income will not eliminate the effort required to make the money.
With investment income, it is required to own a certain amount of an assets in other to yield income, and this assets can be stocks, bonds, rentals, and so on. While you refer to it as passive income, you need to know that it requires money and a little bit of attention. You need to know that while some strategies are referred to as passive, some of them require money. They are rental, dividend, interest, and Capital gains and they require lots of money to get anything meaningful from it. If you expect to get a 7% return from these investments which is the average income made annually, to meet up your annual salary, then you must have invested millions.
If you are expecting to get money without investing time effort or money before having a continuous growth, then trust that you are not ready to get income from what you refer to as passive income. If you are depending on that type of income, then you need lots of money.
Other methods of income that is referred to as passive income are digital products, and this includes ebook, online courses, or any other services of value that are sold online. With this, efforts still need to be invested into them, so there isn't basically anything free called passive income
In the quest for passive income, it's vital to dispel the notion that it's a free ride to financial success. Whether through investments or digital products, every avenue labeled as passive requires an upfront investment of money, time, or effort. Understanding the true nature of these income streams is key to managing expectations and navigating the path to financial growth.