Donald Gayhardt

Donald Gayhardt - A Leader in Financial Services for Underserved Consumers

Spotlight – Pitfalls to Avoid When Creating Passive Income

Spotlight – Pitfalls to Avoid When Creating Passive Income

As this blog has often pointed out, earning passive income is by no means impossible. Some of the most financially successful people in the world insist that earning money on the side through various passive income streams is one of the most essential means of building wealth.

However, it’s important to realize that, as is the case with any form of building wealth, when you research passive income ideas, you will likely come across people making promises that they can’t keep. Everyone wants to make more money. Some people know this and use that knowledge to their advantage—and to the detriment of their customers—by offering services or products that will not yield the financial benefits that they claim.

You need to ensure that you’re familiar with the signs that they may be too good to be true. Again, while it’s entirely possible to earn passive income, you’re more likely to succeed if you avoid some common pitfalls. The following are a few examples that you should keep in mind:

Promises That Are ‘Too Good to Be True’

Can you get rich from a passive income stream? Technically, yes, but it’s unlikely. While a few select people have earned millions from basic passive income strategies, they’re the exception. Also, if you read more about these people, you’ll learn that they typically turned passive income strategies into businesses that they actively run. They’re not actually passively earning millions.

It’s more likely that you’ll earn enough passive income to make your life easier. Perhaps you’ll be able to more comfortably pay your bills thanks to passive income. In addition, passive income can provide you with more freedom to enjoy some extra luxuries. You might even earn enough passive income to justify quitting your current job and pursuing a career that you enjoy, although you’ll need to honestly assess whether that’s a smart move before making such a decision. You shouldn’t expect to become a multimillionaire when you begin developing passive income ideas.

Thus, if someone offers a service or product, such as an online course, claiming that they can make you rich via passive income, you probably shouldn’t believe it. A promise that sounds too good to be true typically isn’t.

Plan Ahead

Passive income isn’t necessarily money you earn without putting in any effort whatsoever. In the long run, yes, a passive income stream can provide you with a steady source of extra money while requiring very little work on your part.

That said, regardless of your strategy, setting up a passive income stream that succeeds will take time. For instance, if you plan on making extra money by selling a self-published ebook online, you need to initially perform market research to ensure that there will be customers who will purchase this type of book. Then, you need to write it, while also planning and implementing a marketing strategy to ensure that they know it exists.

On top of that, once you reach the “hands-off” phase, many passive income streams will still require some degree of management. To continue with the aforementioned example, you’ll need to consistently monitor your sales. If they start to drop off, you might need to implement another marketing strategy. For instance, you might also regularly promote your book on social media in order to ensure that sales don’t drop off in the first place.

While making passive income doesn’t need to involve a lot of work, it does require some work. That’s why you shouldn’t trust anyone who claims that you can earn substantial amounts of money with almost no effort. While these promises might sound appealing, they’re not based on reality. Someone offering passive income training services is more likely to be trustworthy if they’re honest about the work that you’ll need to undertake.

Conduct Research

There are many entrepreneurs who’ve succeeded in earning significant passive income and who now make money sharing their strategies with others.

You simply need to conduct research about the people offering these services before you begin to consider giving your money to them. Along with reading reviews and testimonials from their former customers, you need to confirm that they’re actually as financially successful as they claim to be. If you’re going to pay someone for advice on how to make money with passive income, you need to be certain that they actually know what they’re talking about first.

Once again, these points shouldn’t discourage you from developing passive income ideas. They’re instead intended to help you boost your odds of success.

Copyright 2017 ©