If I had a nickel for every time someone said to me that they were launching a new offering for passive income, well…
…I’d be as rich as Amy Porterfield!
Whenever someone asks me about passive income, I always have the same response:
If you build it, they will not come.
That’s because what the gurus like Amy don’t tell you, is that building a viable passive income stream is anything but quick or simple. In fact, I’ll give you an acronym to help you remember exactly what it takes: TIRED.
T – Time
I – Investment
R – Resources
E – Energy
D – Determination
So today, I’m going to debunk the most common passive income streams to demonstrate how they are anything but passive, with the goal of saving you from potential disappointment and frustration.
- Membership Businesses
You’d be shocked to learn how many hours and years I’ve put into building The Upside into what it is today. Ask any of my peers and they’d say the same thing about their membership businesses.
Membership businesses are not set-it-and-forget-it models.
Membership businesses take a ton of investment, time and resources to attract an audience, provide constant value to paying members, and retain them renewal after renewal.
Believe me, there are no shortcuts here. This business model is anything but passive so don’t do it unless building community is your true passion in life.
- Digital Courses
Yes, The Upside has a digital course and it’s still wildly popular. However, when we were first building it out, we invested more than $100k and 18 months to bring it to market and build an audience for it.
You can create the most kick-a$$ digital course that ever existed in your vertical. But that won’t be enough to get people to actually buy it.
Be prepared to host dozens of live webinars (and sell hard on them), build a large newsletter audience, post 3 – 4 times per week on social media, and invest in an ad strategy.
Personally, I found all of this to be terribly exhausting and unaligned.
Only after I built an audience and reputation for the course over many years did I switch it to evergreen–a true passive income stream.
- Paid Downloads
Again, you’ll need to market the hell out of these in order for anyone to actually buy even one. Instead, consider making your downloads free (like we do!) to provide value to those who need what you offer and to build up a newsletter audience.
Remember, unlike social media, you own your newsletter audience and it can never be shut down or taken away from you. It also builds equity in your business and can turn into sponsorship revenue if it grows big enough.
- Paid Newsletters/Gated Content
There are several experts out there who have a paywall to access their weekly content. So, let’s do the math: if they charge $4.99/month to subscribe and they have 5,000 subscribers, WOW, that’s $25k/month in subscription revenue. Amazing!
But ask any of these experts what it took to get to 5,000 subscribers, or what it takes to manage their subscription business, and they’ll tell you it’s anything but passive. It’s a main part of their business, not a passive side-supplement to their consulting firm.
Look, at the carnival, there’s always that one person lugging around the human-sized stuffed teddy bear. Clearly, someone was able to magically loop the plastic ring around the glass jug spout.
But just like winning at a carnival game, it’s pretty rare that someone creates a passive income stream without putting in years of blood, sweat and tears to do so (plus a sprinkling of good luck).
So next time you want an easy way to build a passive revenue stream to supplement your consulting business, just remember:
If you build it, they will not come.
And ask yourself: Is this the business I really want to build and am I willing to put in years of effort to get it to a place where it could become passive?
And always remember that I have your best interests at heart. So please, don’t fall for the carnival game!