Welcome all to my guest post. I would like to start off by thanking John for allowing me to post here. My name is the Studenomist and I run Studenomics.com. If you are a current student or a new graduate then Studenomics is the place for you. Too often do young people receive advice from the wrong sources, which leads to them not being able to lead a financially prosperous life. Studenomics is here to solve the pain by working on being a valuable resource for young people.
People are always asking the million dollar question; if passive income is so easy then why doesn’t everyone do it? The answer is very simply actually- passive income does require effort. Wait a minute, doesn’t that defeat the whole purpose of passive income? Wrong. Just because it is considered “passive” it doesn’t mean that setting it up is passive. People think that passive income should come with very minimal time and effort. When those people find out they have to work for passive income they are often shocked, but really what did you expect?
Today I will be briefly discussing the effort required to set up a decent stream of passive income. In case you are wondering the idea for this post came from an article I read over at Smart Passive Income called How to make extra money for almost doing nothing part 1. After reading the article I started to wonder why passive income isn’t as easy as it seems. Then it hit me and next thing I knew I was writing this article. Listed below is the effort required to set up a stream of passive income:
- Research – You must conduct proper research on the various streams of passive income to determine which one is best suited for you. Bad credit? Then investing in a rental property may not be for you. Short on cash? Then you definitely won’t be earning a killing off dividends. Excellent writing skills? Maybe writing a book or ebook is the best option for you. The research stage takes a ton of effort and dedication.
- Initial setup – This is the stage that scares almost everyone away so beware. After you have chosen your stream of passive income, whether it be dividends, rental income, blog, book, etc. you must now work on getting it off the ground. If you plan on writing a book or running a blog then boy are you in for a major shocker. You have will have to work for months and months without seeing a profit. Once you have completed that book you will have to worry about trying to sell it somehow. The amount of effort required at this stage makes you wonder if this so called passive income idea is even worth it.
- Maintenance – Congratulations you have somehow managed to survive to the point that you are actually earning passive income. Time to collect the money and retire early right? Well wrong again. Now you must put in effort to ensure that this source of passive income stays alive. If you are earning dividends you must watch out to see if the company has cut the dividend. If you are running a rental property then you will have to doing work on the unit. If you have written a book then you will have to update or watch out for competitors.
Yes I know this is a very general outline and you could probably come up with many other ways passive income requires effort. Do not worry you will see more on the sub subscribe to my RSS Feed.
{ 8 comments… read them below or add one }
Very well said! Getting to a point where you can earn money for doing nothing just doesn’t happen out of thin air.
Another key point is that the more work you put into it, the more money you can potentially make. It’s definitely related how well you research and your initial setup. Maintenance is very important, and I would also include optimization in there too.
Pat with SPI’s last blog post..I Guarantee You Will Read This Post, Or Your Money Back! Details about Guarantees Below
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Good post! And THANK YOU for mentioning the work on rental properties. I am a landlord and every time I see people talking about making easy money from rentals I grit my teeth. Not saying that it isn’t a viable way to make money, but if you are going to be good at it, there is a fair amount of work to be done.
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“Very well said! Getting to a point where you can earn money for doing nothing just doesn’t happen out of thin air.”
Dang…
Building passive income sources is incredibly frustrating at times, but I feel my efforts will pay off many times over in the future.
Blake’s last blog post..Book Review: Personal Development for Smart People.
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Great post, it takes a TON of effort up front, but all good things generally have a significant initial cost before you enjoy the blessings.
Thanks,
B
Brandon’s last blog post..Tips for surviving a depression!
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I think what is so tempting about passive income as a concept is that it appeals to the part of us that likes to sit back and do nothing. Your post helps us realize that we are going to have to be prepared to pay the price up front in order to enjoy the benefits that come later.
Steve’s last blog post..Break Up With Lack! Making Money During a Depression
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Now, there are some passive income streams that do not take a huge amount of effort to start or keep up. Two that I am most familiar with are ebooks (far easier than hard copy publishing) and writing for content sites (no hosting, code writing or site promotion needed).
Larger efforts will often pay off with higher returns, but don’t overlook the easy ways to generate residual income streams.
Maria @ Residual Income Web’s last blog post..Why Blog Earnings are not Passive Income (But I’m Still Blogging)
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without Effort there is no income …
there are many easy ways to earn money which i hv read on many other mmo blogs, but that work also needs some efforts in it and yea hard work pays in the end for sure.
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I don’t know of any farmer who is able to enjoy a harvest without some hard toil, preparing the soil, making sure the seeds are sufficiently watered, and even working the harvest. Crops don’t grow overnight, and it’s no different with the passive money tree
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