Creating multiple streams of passive income is a wise business decision but don’t be fooled by some of the myths around this topic.
Do your research objectively and learn how to read between the lines of promises people make.
This sage advice is often correct: If it sounds too good to be true, it probably isn’t true.
Myth #1: Creating passive income is quick and easy.
Anyone who has worked to create a product, write a book, create a niche website, or even promote affiliate links will tell you this myth is false. You’ll always have to do work at the beginning and the amount of work and how long it takes you will vary considerably depending on your income stream. Anyone promising you overnight riches is out of touch or trying to sell you a scam.
Myth #2: You can set it and forget it after your passive income stream is set up.
This is only true if you hire a project manager to manage the daily marketing and promotion plans for your chosen income stream. But even if you outsource the daily management, at some point you still need to evaluate if updates are needed or if it’s worth the ROI (Return On Investment).
Myth #3: If you create it, it will sell.
This is a take on the famous line from Field of Dreams, “If you build it, they will come.” It worked well in the movie but in real life, you can’t just put up a sales page or publish a book on Amazon and wait for the sales to roll in.
Organic search traffic is always nice but you’ll reap far greater profits if you actively market your products on social media, to your email lists, at live events, and with creative advertising campaigns.
In the internet world with millions of products and websites, you have to work hard to make your products known. If you don’t toot your own horn, nobody will know what you have to offer.
Myth #4: You need large amounts of capital to create passive income.
Again, this depends on the type of income stream you choose to create but unless you want to start flipping houses, online income streams do not require huge amounts of capital.
Take a look at Pat Flynn of Smart Passive Income. One of his business models which contributed to his earning over $5 million was to create niche websites. Today you can start a website with a very inexpensive domain purchase and an equally inexpensive web hosting package.
Even if you want to self-publish a book on Amazon, you’ll invest more time in getting the manuscript ready than you will to actually publish.
One bonus tip: Try to focus on one income stream at a time until it becomes profitable. Once it makes you a consistent income and you have a process in place for managing it, start to research your next income stream.
Also remember that not every idea will be a grand slam. If an income stream isn’t performing as you had hoped, go back to the drawing board or retire that idea and move on to the next.
Next week I’ll share my three tips for creating a positive mindset.