In this special episode of the Fearless Business Podcast, Robin does some myth-busting around the recent trend of generating passive income.
If you go onto social media today, especially on Instagram, Pinterest and Tik Tok, you’ll find at least one video on ‘how to make money quick through generating passive income'. In the wake of the pandemic, of course, it may come as no surprise to you that it is a trending topic; people are looking for ways to generate extra income in a poor economic climate, and who can blame them? This is why Robin has chosen to talk to you to dispel the myth that you can become rich and successful through generating passive income.
In this special episode of the Fearless Business Podcast, Robin Waite does some myth-busting around the recent trend of generating passive income.
If you go onto social media today, especially on Instagram, Pinterest and Tik Tok, you’ll find at least one video on ‘how to make money quick through generating passive income’. In the wake of the pandemic, of course, it may come as no surprise that it has become a trending topic; people are looking for ways to generate extra income in a poor economic climate, and who can blame them?
This is why Robin feels it’s important to save listeners the trouble and dispel some common myths.
For those that don’t know, passive income is defined as income that takes ‘little to no effort to earn’. The most popular forms of passive income are:
These forms of passive income have grown increasingly popular over the last decade, and with influencer’s promoting how ‘easy’ they are. It’s clear to see why. Robin emphasises that for a lot of these ideas to work, especially where stock investments are concerned, you need to have a decent amount of money to spend upfront. This is why most passive income ideas don’t work, people that are looking to ‘make money quick’ are desperate for money and often in financial difficulty themselves. The most vulnerable can also find themselves getting caught up in pyramid schemes and dodgy MLMs leading them to lose more money than they had to begin with.
Okay, so stocks are expensive what about the forms of income that aren’t so costly such as affiliate marketing and dropshipping. According to Robin, the rule of thumb is that if these mediums sound too good to be true, they typically are.
Where you are not investing in money you are investing in time. The keyword here is promotion; to be a successful affiliate marketer, you’d need to 1. have an extensive, reliable network that you can promote products to and 2. be ruthlessly persistent. This is why you typically see celebrities or influencers with high engagement rates promoting affiliate links on their pages, as they know it’s a worthwhile investment for their time. They also probably have a social media team behind the scenes doing all the work for them, making it even more ‘passive’
This is also why ideas like dropshipping do not work. Dropshipping is highly competitive and has its own web of issues such as low-profit margins and legal dilemmas. However, the main problem with dropshipping is the turnover rate; don’t expect to be in the business for too long. As a manufacturer, alongside the costs of producing a product, why would you want to invest in someone that barely does any of the legwork? This is why most dropshipping ventures don’t tend to last that long. It’s unnecessary.
It’s the same with blogs, typically it takes at least a year full of outreach, articles, backlinks and SEO optimisation to have your blog receiving sponsored articles. When looking for websites to host sponsored articles, most companies opt for DA 30+ sites as it helps both parties rank higher in search engine results. To reach such a level requires a huge amount of dedication and time, which isn’t the best if your sole purpose is to create a blog site about money rather than something you are passionate about.
What’s also not spoken about with these passive ventures is the rate of income you receive from them and how much / often you receive it. For example, it took Robin years to write each of his five books and then years for them to build up and generate a decent amount of income through royalties.
Of course, you could be lucky, there is a slim chance that you could write a book and it can become an instant success. But the same could be said for any venture you decide to proceed with, you could invest in a massive spike of stock or all your Instagram followers decide to purchase through the link you are promoting. The issue is, nothing is permanent, and everything is oversaturated. One of the perks of living in the twenty-first century is that we live in the age of the internet; information is so widespread that anyone and everyone can set up their own “side hustle”. Unfortunately, the downside to this is that for every form of passive income you’ve set up, there is also a multitude of people doing the exact same thing.
When moving forward, Robin wants people to consider why they are wanting to start a “side hustle” in the first place. If it’s for more money, Robin states that you are better off getting a part-time job as with the amount of time and effort you will be dedicating you may as well set up your own small business. Trying to start a side hustle with no other form of motivation other than money also brings its own issues such as burnout.
If you are thinking about starting your own business. The Fearless Business Podcast has a great number of episodes, guest speakers and resources to set you on your way. You can also check out our blogs or our YouTube channel where Robin presents a vast amount of business ideas so you can launch your business successfully.
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