A New Perspective On Passive Income
I was recently talking to a few people who want to start earning ‘passive income’. They want to own an Amazon FBA business and sit back watching their products sell.
While passive income is a great goal, and sitting back and watching products sell will happen, their expectations were way off.
One guy said, “I’d like to be earning $30,000/month in 18 months.”
Another had slightly lower expectations, but also a tighter deadline, “I want $15,000/mo by the end of the year.”
They both wanted to start with $5,000 – $10,000, and they had no experience.
It’s hard to tell someone “I don’t think that’s going to work out.” Telling someone their goals aren’t reasonable is what old cranky people tell kids who want to become astronauts.
It’s especially difficult when the other influences they’re watching are the ‘get rich quick’ gurus on YouTube, selling a course that will teach them how to reach those 5-figure-per-month goals, on that timeline, and only starting with $1,000. (Well, $1,499… because you need to spend $499 on their course, of course.)
Beyond the actual achievability of these goals, I think these guys need a new perspective on passive income.
I don’t earn $20,000/mo, but after 2 years I do earn $2,000/mo from businesses that are relatively passive and that re-invest 80% of the profits back into growth. Anticlimactic I know and this income is nowhere near a ‘guaranteed lifetime annuity’. It’s shaky at best.
Having earned a little ‘passive income’ from businesses that, for the most part, run themselves… I’ve got a new perspective on passive income, and those big goals that attract just about everyone to the ‘make money online’ gurus.
Just $500 – $2,000 Of Monthly Passive Income Is Amazing
Earning passive income doesn’t ‘suck’ until you reach a 5-figure-per-month income. Especially when you’ve only ever worked for other people, ANY level of passive income is incredibly exciting.
I remember when I had my first product sale on Amazon. I sold a stick of spiral incense for $12.99 and netted ~$5 profit. After that, I sold just 3-4 units per day… and $15-$20/day never felt so good!
If you’re just starting to earn passive income, you are either already earning a living doing something else, or living at home with $0/month expenses. Your first dollars really feel like profit.
Once you’re earning $1,000/mo, you can’t buy a sports car (sorry) but you get your time back. This is huge. You can spend all day learning, you can spend all day sleeping, or… you can spend all your time growing new passive income streams. (In my case, launching new Amazon products)
You get into a virtuous cycle where for every 1 product that slows down, you launch 2 more to replace it…. Then you launch 5, then you hire some freelancers and launch 10 products with color variations. Even the occasional ‘crisis’ just slows you down a bit.
Most importantly… you see the upward path leading to $15,000/mo or even $30,000/mo. You know it’s far away and you know it’s going to take a lot more work and time, but you realize that you’re actually going to enjoy the ride up… whether it takes 2 years, 5 or 12.
If you’re just getting started in online business, be aware that your ‘big financial goal’ of hitting $10,000/mo, $20,000/mo, or $30,000/mo in passive income is probably much further away than you think, and far more difficult than the gurus who want you to act now and buy their ‘magic’ course will tell you.
But also realize that that doesn’t matter. You’ll feel your emerging financial freedom as soon as you’re earning just $500 – $1,000/month. You don’t need $30,000/month and a Bugatti… yet. 😉
I think one important detail people also forget to look at: the first $2000/mo are the most important and they feel the best.
Sure, every extra $1000/mo feels nice and it’s definitely worth reaching for. But $2000/mo buys you food, shelter, some savings, eating out here and there, time, and independence (you don’t have a boss!)
If you’re currently earning $0/mo, going to $2000/mo means a massive change in lifestyle. You go from no food, no car, no house, no independence, to having all of it (albeit shaky and basic.) However going from $15,000 to $16,000 barely changes anything. You go from expensive food, car, house, to perhaps more expensive car, food, and house. (Notice you also don’t gain more independence.)
Great Points!
I think, before you get started, when you are earning $0/mo, on your own time, relatively ‘passively’, you get this feeling that “if it’s not going to be huge, why bother?”
Having the big goal to aim at is good, but I didn’t realize just how great I would feel even when I got to a relatively small amount of ‘passive income’ that has at least been stable enough to last a few years now.