5 Passive Income Myths You Should Know About

Having a steady passive income stream that lets you live the life of your dreams seems too good to be true.

But is it?

The answer is two-fold. In many ways, the answer is yes, it is too good to be true, yet at the same time…

Well, it is complicated.

Go online for any amount of time these days, and it is virtually guaranteed that some smug, smiling face is going to advertise a method of generating that passive income that will lead to a life of luxury.

They will go on to tell you about how quickly and easily you can be earning a passive income. I’m afraid for most of us this just won’t be the case. It is the first myth we shall cover.

1. Creating a Passive Income Stream is Easy

Let me tell you a story, a story of a self-published author who earns a passive income from book sales and a few webpages. He has a good lifestyle; he works when it suits him and plays when it suits him. Sounds great, doesn’t it.

However, the keyword in the above paragraph is ‘work.’ He works when he wants, but that doesn’t mean he doesn’t work hard. He spent years writing his first book in his spare time. When he published it, he spent months tied to his keyboard pushing it.

He took to social media with a vengeance and studied every blog on bookselling. He wrote hundreds of emails, and slowly he gained sales, and his author webpage started to bring in a separate income stream, which led to more webpages.

The point here is ‘Rome wasn’t built in a day.’ Creating a passive income takes graft.

You get out what you put in, and in my own case, I achieved it without any great capital outlay.

This leads us to debug the next myth.

2. You Need Capital to Create a Passive Income

Having a chunk of capital behind you certainly helps. There are no two ways about it. More doors and schemes are open if you have the start-up capital.

However, there are living proofs that this doesn’t need to be the case. I didn’t have any large funds to invest in; I wasn’t able to play the stock market or the Forex game. But what I did have was a vision and the ambition to achieve it.

When no capital is available, it can be substituted with hard work, diligence, and persistence.

Many passive income ideas don't need huge investment. For instance, starting a blog, writing an ebook, selling your graphic designs, and the list goes on.

Set out a roadmap, plan how you are going to earn that passive income, and work toward it.

It may take time, but the rewards are there for the taking. And once you have that passive income, you can just sit back and let the money roll in, right? Well, I’m afraid no.

3. Maintaining a Passive Income takes no Work

Let’s consider a couple of examples.

First, let’s go back to the start of this article and consider the people that pop up all over the internet with promises of $20,000 a month earnings from the comfort of your own home. They are likely going to sell you a course that they earn their own passive income from.

If they aren’t popping up on YouTube selling their product, they won’t sell their product to earn the passive income.

In any case, you can visibly see the results when you do not put the same effort in. After taking a holiday, for instance, there will a visible slump.

The point is you must keep working at whatever method you are using; if you take your eyes off the ball, things can change quickly.

That product you were affiliated with, may suddenly be out of fashion. Or all that SEO work you did to rank your websites could be undone with a quick change of Google algorithms.

It further leads us nicely to the next point.

4. Adaptability is King

Or, to put it another way, financial confidence is the attribute you should be striving for. To obtain financial freedom requires financial confidence.

To maintain a passive income in a rapidly changing marketplace means being able to adapt your business model quickly to maintain your income. This requires financial confidence; most people who earn healthy passive incomes do so from multiple income streams and by always watching for the next big thing.

Financial confidence means making the right decisions at the right times. To achieve this requires almost total immersion, not just in current projects, but in an understanding of the mechanisms that drive them and where they are getting driven to.

Financial freedom cannot be achieved without financial confidence to follow the right paths.

Of course, following different paths means not putting all your eggs in one basket, a point we will consider next.

5. One Income Stream is all you need

This is perhaps one of the most common myths and probably the most dangerous. By tying yourself to just a single source of income-you are leaving yourself exposed and vulnerable.

Wise investors don’t just invest in one company; they play the stock market and hedge their bets.

The exact same applies to passive income, if you put all your eggs in one basket, you are asking for trouble. In my own experience, I quickly realized that.

I began to blog on my author site and set up different marketing ideas, it was just a trickle at first, but it was income. So, having a natural medicine background, I set up another webpage and began to blog about herbal and natural food subjects, another trickle of income.

To maintain a healthy passive income diversification is crucial.

Wrap Up

First, let me point out that although reading these myths may put some people off getting started creating a passive income, please don’t.

The point is, it isn’t as easy as it is often portrayed. But what it is, it is a great, fulfilling, and fun journey.

You can start small as a side hustle and create it as a passive income source with your hard work and persistence.

For many, passive income is a myth; it requires work and diligence. But what you get at the end is a freedom that most people can only dream about and an achievement that is yours and yours alone.

I love what I do, I love the freedom it gives me. It’s what I work for.