It’s not hard to understand why many people dream of earning passive income. The idea of making extra money on the side is inherently appealing. If you don’t have to put in much effort (beyond the initial work of setting up a passive income stream, which is always necessary) to earn it, even better. That’s why this blog routinely highlights the many methods through which a person can earn passive income in smart and safe ways.
That’s an important detail to remember. Although it is definitely possible to earn extra money without much extra work, you can fall prey to a number of common pitfalls when developing your passive income ideas if you’re not careful.
That doesn’t need to happen. As you pursue your goals, remember to avoid these errors:
Believing Stories That Are Too Good to be True
The vast majority of people who earn passive income aren’t getting rich through the extra money they make on the side. This money can be helpful and provide for a more secure lifestyle, but it’s not likely to turn you into a millionaire overnight.
It is true that some people are said to have earned millions with “passive income” strategies. However, upon closer inspection, it’s clear that these millions didn’t actually come to them without work. Consider the example of Pat Flynn. He began realizing the potential of passive income when a blog he was writing became a hit with a niche audience. He monetized the blog through ads. Flynn also wrote an e-book that his customers would find valuable, using the blog to promote it.
He did eventually go on to become a millionaire. However, Flynn didn’t achieve this goal by resting on his laurels. He still makes money (and likely most of his money) by providing others with passive income advice. Flynn may have the reputation of a passive income millionaire, but he’s actually a millionaire because he runs a successful business. It’s not as if he set up his blog and then waited for the cash to roll in.
Luckily, he’s a genuine business owner who isn’t looking to exploit his customers. Flynn is honest about how much they can earn if they wish to make money passively. Not everyone is as ethical.
Again, many people want to earn passive income. Many others also recognize this. Thus, they promote products, books, programs, and more, claiming they can help customers earn six to seven figures with virtually no effort.
That’s unlikely to happen. In these cases, unscrupulous salespeople are usually trying to take advantage of their targets with unrealistic promises. Those targets waste money on programs or how-to guides that don’t yield the desired results. Rule of thumb: if a claim sounds too good to be true, don’t believe it. Trust your gut.
Abandoning Your Efforts Early
Earlier, this blog entry referenced the fact that you will need to put in work at least during the initial stages—and often thereafter, in the form of promotion and marketing—in order to develop a passive income stream that delivers consistent returns. This is important to remember and accept. Many people who could have eventually earned passive income fail to do so because they don’t realize how long it can take to begin earning extra money.
Let’s return to the example of Pat Flynn. He didn’t start his blog because he planned on monetizing it. Flynn began blogging because he was preparing for a notoriously difficult exam. If he passed it, he’d earn a certification that would make him much more valuable to employers. The blog was simply a tool he used to document his study habits and discipline himself. It only started earning him money after it attracted a larger following than he had expected.
In other words, it was a long time before Flynn’s blog turned into a reliable source of passive income. He had to continue writing it before reaching that goal. If you’re willing to put in that much work (and wait long enough for it to start bringing in revenue) you can also find success via a passive income stream.
Again, as this blog often points out, there are many ways you can earn passive income. Some people make the mistake of pursuing the first strategy that appeals to them. These people often fail to realize their goals. Why? Because they didn’t take the time to plan first.
This indicates another reason why patience is vital if you’re interested in making extra money on the side. You can’t rush into developing your passive income stream without a plan. You need to carefully determine what strategy is most likely to be effective, and you need to decide precisely what steps you will take to ensure your success.
None of this should discourage you from trying to earn extra money passively. On the contrary, it should help you understand that earning passive income is not only possible, but also much more likely when you don’t fall prey to these common mistakes.