2 Major Myths About Passive Income

You may have heard the term “passive income” thrown around in the online business space. It’s become synonymous with a lifestyle of earning high income while traveling the world, or not having to work and watching sales come in overnight.

I am sure you’ve seen the video ads on Facebook where the person is talking in front of their Lamborghini, or walking into their multi-million dollar home. Most of the time they are talking about how to earn money online and making “passive income.” 

What is passive income? Find out 2 major myths about passive income so that you can finally know the truth.


Sometimes it can be difficult to understand what passive income actually is because they are just wowing you with the fancy cars and lifestyle. That is why I wanted to share with you 2 major myths about passive income because this term has been misunderstood and misconstrued online.

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There are incredible benefits to creating passive income streams in your business. I know, because 85% of the income I earn in my business is passive. But I want to take some time today to set the record straight about what it really takes to create regular passive income in your business -- because it’s not quite as hands off as it seems.


What is passive income?

Before we can really dive into some myths around passive income, I think it’s important to clear up what passive income really means. 

By definition:

Passive income is an income received on a regular basis, with little effort required to maintain it.

This means that it is income that you aren’t constantly working at every single day to make.

Examples of passive income in your business could include:

  • Affiliate Marketing
  • Book Sales
  • Digital Downloads or Product Sales
  • Paid Email Courses

With passive income, you create something and then continue to make money from it, without having to actively work to generate that money every day. This doesn’t mean that there isn’t any work involved, it is just minimal.

The opposite is active income where you are trading time for payment. It’s non-recurring and require significant work to be paid for the time you spend. Examples include: coaching, consulting, freelance work, or even sponsored posts.

Passive income allows you to create a revenue stream and the systems around it to keep it working and even growing to scale your business further even at times when you are not physically doing the work, which provides more freedom and flexibility.

Now that you know what that means, let’s talk about what it doesn’t mean.


Myth #1: It isn’t actually passive.

People dream of passive income as a way to make money while not actually working at all. It’s seen as a ticket to freedom for the rest of your life. 

This is easily the most common misconception about passive income, and, honestly, most of the marketing around passive income is responsible for this perception. However, passive income does actually take effort.

You can’t just “set it and forget it.”

It first takes effort to set up the passive income stream and create the systems that keep it running. Then you will continually be marketing and refining those systems to keep it going and earning the revenue you desire. 

Passive income does take active time, but often that time is worth it because you are able to scale that effort by serving more people at one time. 

The work you put in now is laying the foundation for future income and success. It relies heavily on your systems and processes that you have in place, but you will have to still monitor, edit, and update to ensure the system is working properly. 

I like to refer to this as leveraged income instead of passive income. I earn money month after month because I am able to leverage the traffic I get to my site, or leverage the systems I have in place. 

You can look at an example of how I do this here: How I Earned $9k From 1 Blog Post .


What is passive income? Find out 2 major myths about passive income so that you can finally know the truth.

Myth #2: Passive income is easy

Whether it’s an affiliate link, a digital download, or course, passive income is not as simple as putting it together and watching sales roll in. 

Just like anything else you may sell now or in the future, it takes time to evolve an optimized sales process for your products.

This often means that you need systems. With systems in place, you can earn money on autopilot, but they have to be good systems. 

You have to be intentional about the content you create, the marketing checkpoints you set up, and the sales process you put into place to make sure you are making it as simple as possible for your audience to purchase.

Making sales every day means making sure you are driving traffic to your site every day, getting email subscribers every day, and having payment processors and systems that seamlessly plug into every other step of your sales process. It takes intentionality in the setup and testing to refine the process to maximize results.

After you have refined the process you will learn what needs to be done to maintain the revenue stream, but it is not something that just happens overnight. 

No matter how many Facebook ads you see or passive income sales promotions, just understand that a lot of work went into it. I don’t want to discourage you, but I don’t want you to think that it’s just an easy thing.

In the end, passive income -- or as I prefer to call it, leveraged income -- is an incredible tool to grow your impact and income at the same time because you can leverage your expertise in a new way.

So while it takes time to create these leveraged income streams and continue to make them effective, it pays off in the end by allowing you to have freedom and growth in your business without trading dollars for hours.

Have you been considering passive income for your business? Why or why not? Share with us in the comments below.

Addi GanleyComment