What if you can start making money without having to work? Wouldn’t that be great to earn money while you are relaxing on a Caribbean beach?
Well, it is possible! Creating a passive income source that can allow you to support your finances is totally doable. However, generating a passive income is not as “simple” as some “Gurus” claim it to be. Making an additional flow of cash requires a fair amount of work, money, and time as initial investments. But, it can be worth that effort.
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Below, we have listed 5 popular myths about creating a passive income. If you decided to work on creating a passive income to support your finances, you can’t afford to believe any of these myths.
Passive income myth #1: You can create a revenue stream to go on autopilot
Even though it sounds tempting, this is one of the most dangerous passive income myths ever. No! You cannot set and forget your passive income stream.
Whatever the passive income stream that you have selected, it will still require your active presence to keep making money. For example, property rentals are one of the most famous passive income ideas. Let’s assume that you have rented out a property. Can you just forget about your property after renting it out? No, you will need to do the repairs and modifications to keep it attractive. Also, you need to answer the questions and reviews on online listing sites to provide personalized support.
Same goes for the dividend investments. You have to check for better options and the right investment opportunities constantly. You need to read the news publications to predict the future of your investments. So, it all requires the active involvement of yours.
Sometimes you can hire VAs (Virtual Assistants) and delegate your responsibilities. For example, I own a couple of online stores, and I have hired VAs to look after the functions of these stores. Even though it seems like a 100% passive income stream, I still need to check in with them to make sure that everything goes right. And, we need to continually fine-tune the process to anticipate the market changes and stay relevant.
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Passive income myth #2: All you need is a single source of income
Nope! Unlike your regular 9-5 job, passive income streams are usually unreliable. For example, let’s assume that you are investing in stocks, and you decided to put all your money into a single company. If that particular company does great, wow, you got rich! However, what if it goes down?
That is why you need to work on building multiple passive income channels to support your finances. So, if something goes wrong with one channel, you got another way to land on your feet.
However, when you work on multiple passive income sources, make sure not to exhaust yourself. When I first started working on building my passive revenue sources, I tried many different methods. I tried blogging, stock markets, online businesses and many other ways. After a while, I understood that I don’t have the capacity to handle all these channels at once. By doing so, I couldn’t provide enough attention to any of these channels. So, I was losing. Don’t let that happen too.
Carefully select and work on building a single income stream at a time. After you become comfortable, and after you create a system to handle that passive income stream, you can move on and work on another income stream.
Passive income myth #3: It doesn’t take time to build a passive income stream
People believe creating a passive income source can be done within a few days. However, I can assure you that it is not going to be that easy. It will take months, if not years, to create a revenue stream that will deliver lasting results.
When I started my first online store, I only incurred losses during the first two years. Likewise, you will face situations where you won’t earn a single dollar for a very long time. Many people abandon this process due to the same fact.
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I have seen some people get so inspired by success stories of others, and put in all their hard-earned money on a passive income source, thinking that it will generate an income from day one! It won’t work like that. So, make sure to invest only a disposable amount of money into creating a passive income source. Then, you won’t be pressed by time.
Remember, creating a passive income source is not a race! Needless to say, it will require a considerable amount of time for extensive research and planning to build a successful passive revenue stream.
Passive income myth #4: You need to come up with an innovative business idea
Sometimes, people believe that they need to have an innovative business idea to start a passive revenue stream. They think that becoming an entrepreneur or starting a business is the only way of generating a passive income.
Of course, if you can come up with an innovative business idea, or if you can become an entrepreneur, you can take higher risks to make a lucrative amount of money. However, there are many people who generate a considerable amount of passive income by investing in low-risk dividend funds and by putting money in savings accounts with higher yields.
People usually oversee those low-risk passive revenue sources as they don’t create higher ROIs. However, if you run the numbers, you would see that even a 5% return on investment can generate a considerable amount of income over time. Remember, consistency is the key!
Passive income myth #5: You need a lot of money to start earning passive income
How much money would you need to start a passive income stream? Many of us caught up in the hype that starting a passive income stream will require a lot of money. No, investing to start a passive revenue stream won’t break the bank
For example, if you decide to invest in the stocks, you can start it with as little as $1000. And, in some countries, even a $250 will do. If you decided to write a blog, like me, it wouldn’t cost you more than $15 per month.
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Of course, if you can invest more, you would be able to make more. For example, if you start an online business, and if you can spend a fortune on marketing, you can get a kick start for your business. However, even without that money, you can start small and grow over time. What really matters is the amount of time and effort you put into validating your idea.
Investing your time on doing the background work will enable you to use your limited amount of money wisely. So, you would be able to do better than those who invest more than you.
Debunk the myths about passive income
It’s time to let go of all these passive income myths that are keeping you from starting to generate a passive income. It is not easy to start a rewarding passive revenue stream – but it is not impossible.
Many of us are doing it, and you can do that too. Don’t overthink about your opportunities. Just start from low-risk opportunities and build up your confidence to go for better investments. When you do so, you can clear up all these misconceptions about passive income all by yourself, and pursue your dream of success.