Imagine having multiple passive income streams that inject money into your bank account with little to no work on your part.
Sounds great, doesn’t it?
It is true that anyone can set up passive income streams and use them to earn more.
However, before you rush into anything, there are a few common myths about passive income which we need to dispel first.
1. Myth: The harder you work, the more you earn.
Fact: A passive income allows you to create something once and earn from it for years to come.
If you’ve spent your adult life working for others, it naturally seems self-evident that time spent working = money.
If you put in X hours, you get Y dollars (or pounds, Euros, Yen etc..).
This is how an employee thinks, but not an entrepreneur.
To build passive income streams, you have to embrace the fact that this isn’t how it always works.
You can create something once that people will buy over and over again.
Every time someone new buys, you get paid.
The more attractive your creation, the more it will sell.
The more it sells the richer you become.
So while you may have to work very hard to create your product, the ongoing sales require little or no extra effort on your part.
2. Myth: It takes money to make money.
Fact: You can set up passive income streams with very little overhead.
If you’ve ever considered starting a business, you’ve probably encountered the problem of start-up costs.
It does take some investment to start a new business.
But there are many passive income models that require very little upfront investment.
Online marketing and advertising are very inexpensive compared to the offline equivalents.
If you sell digital products, there’s no need for warehousing and shipping.
3. Myth: You can set it and forget it.
Fact: Passive income streams usually require some maintenance.
The basic idea behind passive income is that you set it up once and then the money flies into your bank account.
While this is mostly accurate, there is still some maintenance work along the way.
You may need to create content on a regular basis and update your strategy to match changes in the market or your customers’ tastes.
You’ll also need to interact with your audience to build and maintain relationships.
Always remember the golden rule; The easiest sales to make are to your past customers.
As long as you continue to create new products, there is always a portion of your past customers who will continue to buy.
4. Myth: You can start earning today.
Fact: This business model is a long game that takes time before you’re earning a full-time income.
There are very few “get rich quick” schemes which work.
There are even fewer which will produce a reliable income over a sustained period.
You can’t set up a passive income stream in one weekend and start earning a meaningful amount on Monday.
One downside to this business model is it takes time to build an audience who are ready to buy.
Before many people will buy online, they need to know, like and trust you.
It takes time to build that trust, but it can be done.
Once you have gained trust from your audience, you might manage to earn a few hundred dollars of passive income a month.
Then gradually you will build more products and develop more income streams.
Month by month your earnings will grow to a level when you can consider quitting your day job.
5. Myth: Just plug and play and start earning!
Fact: It takes work upfront, but this work will pay you back later.
Be wary of anyone who is offering a plug and play method of making money.
The internet is full of people offering to sell you their proven, foolproof method of instantly earning money – even while while you sleep.
There is only one person who is going to get rich from that scheme, and guess what, it isn’t going to be you.
Setting up passive income steams takes time to get it off the ground.
The time you spend at first does pay you back eventually when the system can run on its own.
Setting up a passive income and finding success takes some time and hard work.
But once your system is running you can continue to grow it at your leisure, creating more and more income streams as you go.
It’s a long game, but the eventual return on investment is well worth the effort.
When you apply consistent, incremental effort to creating your passive income streams you can eventually quit your full-time job.
If you already work freelance, then you can use your passive income for retirement, investments, or as a buffer against economic uncertainty.