Is passive income a real thing?

Image Source: Shutterstock

The world would be a perfect utopia if money grew on trees or if people could earn money without doing any work. However, the real business world is different, and there is no such thing as a genuinely passive income.

Some might assume that billionaires do nothing to earn enormous amounts of money, however, there is little truth to that notion. On the contrary, everyone has worked hard to reach where they are, even if now they seem to be working lesser than before.

What is passive income?

Passive income comprises all profits that require little or no invested time in work.

Different experts have different takes on passive income. While some professionals think rental properties and partnerships are a source of passive income, others argue that investment portfolios fall in that category as they do not require a lot of work.

A proper financial definition of passive income would include all the factors mentioned above, including bonds.

But in recent years, financial experts have expanded its definition, and the term now encompasses Airbnb rentals, selling educational products (e.g., English courses online), online ads throughout social media platforms, and affiliate marketing.

However, most of the things that are considered “passive” are all but that, as they include a lot of BTS (behind the scenes) work that some may not recognise.

Examples of passive income

Let us say that an individual rents the investment property via Airbnb or similar renting platforms. A lot of people might just presume that providing space does not require any work, but they are wrong.

Before putting an online ad on Airbnb, one must clean the whole place and click eye-catching photographs. Although one does not need to put in a great deal of effort on small details, the most successful properties on Airbnb are the ones with nice visuals and tidiness.

Moreover, landlords need to purchase material things like towels, bed sheets, soap, dishwashing detergent, and so on. The more amenities, the better. In addition to taking time, it also involves money that is not guaranteed to come back.

Once guests live at the property, the landlords need to pay attention so that they garner good reviews and excellent recommendations for the guests.

All this work may not seem like a lot to someone who is doing a 9-5 job, but they need to realise that Airbnb landlords mostly work full-time as they need to maintain their property. Now, does it still sound that smooth?

Image Source: Shutterstock

RELATED: Is Airbnb profitable?

Another good example would be recording podcasts and videos for YouTube.

Most successful YouTubers and social media influencers were compelled to quit their full-time jobs due to the time-consuming process of recording.

Coming up with fresh content ideas, following trends, spending hours on the scripts and recordings - all that work goes in a video as short as three minutes.

Chloe Morello, a critically acknowledged make-up artist, committed her entire business career to social media and filming make-up tutorials.

In some interviews, she explained how she spends four hours to film one make-up look, and four more hours to edit the footage. Filming one video for eight hours does not sound less strenuous than sitting in the office and doing administrative work for eight hours.

DO READ: How did Chloe Morello make her way to social media stardom?

Is passive income real?

After defining the term and illustrating it with a couple of examples, it appears like passive income is a myth. Every job, no matter how easy it may look, requires time and money invested in the business.

As mentioned before, all the people who are now billionaires worked tirelessly to build their business empires. They might not spend long hours in the office, but CEOs and founders still need to maintain the business policy and take complete responsibility if things go south.

All things considered truly passive income does not exist, so do not expect that money will appear in your account out of nowhere.