Why 'Easy Money' Isn't So Easy: The Truth About Passive Income

Akhil Sharma - Dec 18 '23 - - Dev Community

We've all heard about the dream of making money without breaking a sweat. Passive income promises just that – earning cash effortlessly. But before we get too excited, let's dig into the simple truth and find out if it's as easy as it sounds.

The idea of making money while you sleep sounds amazing, right? But the catch is, the road to passive income often needs a lot of work upfront. Whether it's starting a blog or investing in something, you've got to put in the effort first.

Active nature of passive income:
Passive income, surprisingly, can be quite active initially. Rather than an instant reward, it involves putting in work upfront before the income becomes truly passive. It's not about avoiding work altogether but about delaying when you get paid for it.

Risks:
Passive income isn't risk-free. Investments can go up and down, and things change. For example, if you own a rental property, it needs care and attention. Stock markets can be unpredictable, so thinking it's all smooth sailing is a bit of a stretch.

Keep an eye open:
Even so-called 'passive' stuff needs looking after. Renting out a place? You've got to manage it. Running an online business? Regular updates and new stuff are a must. It's not like setting it up and forgetting about it – you need to keep an eye on things.

NO days Off:
Thinking you can set up a passive income and then go on vacation forever? That's not how it works. Successful folks will tell you that it's not a 'set it and forget it' deal. There's ongoing work to make sure things keep going well.

Need Active Management:
One major misconception is the idea that something can generate income without ongoing management. In truth, most passive income sources require continuous management to keep the money flowing.

The claim that passive income is a scam stems from the fact that it often requires a substantial upfront investment, ongoing management, or both. Remember, there's no such thing as a free lunch.

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