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Passive income is not entirely passive- there is no free lunch in this world

The world today is moving towards passive income. Money making gurus are advocating earning passive income as the way to go- that you can make money while you sleep, play golf, go on vacation, etc.

Passive income is a smart way to earn money and should be the way forward compared to active income. Or it should supplement active income. Active income means that money comes so long as we work. Once a person could not work due to disability or being retrenched, the income stops coming in. Many people consider working in a large corporation as secured and all they need to do is to work till retirement. But as we have all witnessed the uncertainties- the economy crash made many top executives and sole breadwinners jobless overnight. There is no such thing as job security anymore.

The idea of passive income made many people develop the assumption that they need not work hard to earn a living- all they need to do is to figure out shortcuts and loopholes and they can more money in the bank.

no-free-lunch-in-this-world

Image credit: Brian Zaikowski of bztoons.com

This is the main reason why many people fall for various get rich schemes. People invest the little money they have after being convinced by talks and short cuts with minimal investment of time and money. Whenever you come across such schemes, please research more about it instead of jumping blindly to them. Google about these schemes- and make sure you don’t only land on websites that promote them. Go to forums, hear what others have to say. Then make your decision. Scams can masquerade under different name but with same modes operandi. Be an informed consumer or investor- never follow blindly what others say even though they are your relatives or close friends.

There are only a small tiny percentage of inhabitants on this earth that continue earning passive income from writing songs, recording albums and writing best seller books that are still evergreen for decades to come. For the rest of us, we will need to continue to work on our passive income stream- we need to continue update ourselves to remain competitive. If we sit idle and turned complacent, we would discover that our passive stream would quickly dry up.

Let me illustrate what I mean by giving you two examples:

1. Top Direct Selling Agent

To remain at the top, the agent or diamond distributor or whatever we call them have to remain competitive. No doubt she will not need to work as hard as the agents beneath her, she can now start living off passive income from her agents. But the diamond distributor would need to know her competition, develop strong leadership skills and keep abreast of current market movements and social technology trends and changes.. And she needs to continue to provide leadership by example- ie still need to have rich network of paying clients.

Instead, if she choose to relax and thought that she can retire young and rich, and go and play mahjong or shopping all the time, she would soon be watching her income slowly but surely dwindle. That is why many of the top direct selling agents still continue to work hard- they may not need to do 100 presentations a month to get 10 clients but nevertheless, she still need to know her trade in order to motivate and help her downlines overcome challenges.

An example is a friend’s brother- who is a top agent at Diamond level- he is now very rich because at one of the top of the sales chain in a direct selling company. But he never stopped- he continues selling his products, keep a good rapport with his customers and down-lines.

2. Top Bloggers

If you read top blogs, you will find that bloggers, especially those earning a comfortable income have to work very hard. No doubt if you monetize your blog, an article that you have written in 2005 would still be generating income via advertisement clicks. But you would still need to come up with fresh, original content consistently or outsource the writing to good writers. Else, your readers will move on to the many other great potential blogs out there.

Any bloggers who have many loyal readers would know that he cannot remain complacent or risk losing everything that he had worked hard for. And the world of blogging is more competitive than most business- even though it is not cut throat or that you have to cheat people to get rich. If there is a change in direction, a popular blogger would need to leverage on his existing reputation to launch his next venture.

Conclusion

In the end, the most important question you must ask yourself is what is your motivation in choosing a venture that will earn you passive income. Yes, money is a strong motivating factor but without genuine driving interest, it would not be possible to sustain and make long term living out of that venture. It is important to realize that in anything you do, do it well and put in the hard work required.

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