The Dangers Of Passive Income



It is a good article if you can overlook the writing based off the literal definition of passive.

I'm sure many real estate investors would consider their rentals passive but someone still has to collect the check, maintain the place, and rent it out when its vacant. Running websites is very similar to this, too. Nothing profitable, I don't think, is ever 100% passive except maybe collecting dividends from the stock market ?

The assumption behind this article is that if you aren't working on a single passionate project for 8 hours per day you 1: can't stay competitive, 2: you're out of touch with your customer base, 3: you can't put together solid teams, and 4: it's not your passion in life.

How many of you actually meet this qualification?

Thank you for the read. I enjoyed the section about leverage.
 
Nice read, thanks for the article. I like the writer's style, especially the first few paragraphs. So true, and yet, so pathetic.

Andrew Scherer said:
The assumption behind this article is that if you aren't working on a single passionate project for 8 hours per day you 1: can't stay competitive, 2: you're out of touch with your customer base, 3: you can't put together solid teams, and 4: it's not your passion in life.
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Don't think he was quite saying that. Just basically saying you can't expect to put in a couple months of work, then hang out on the beach for the next several years while $5/hour Indians take care of your business for you. You always have to be engaged, or else one way or another, your business will fall apart.
 
^^^^


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Winners don't look for passive incomes. They are engaged with their business, they eat sleep and breathe what they do.

Lots of guys out there make 6 or 7 figs and quit working. Fast money industry with more than its share of bullshitters and people who got lucky.
 
I think the best passive income would be from collecting royalties. If you watch Shark Tank I've see a bit of people get offered a buyout for their company and a small royalty % on each product sold. Depending on the volume they do, the person collecting that will probably be filthy rich.
 
AllBizNiz said:
I think the best passive income would be from collecting royalties. If you watch Shark Tank I've see a bit of people get offered a buyout for their company and a small royalty % on each product sold. Depending on the volume they do, the person collecting that will probably be filthy rich.
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Yeah that'd be nice to get royalties on a product that sells like crazy.
 
It's not about passive income for me. It's about financial freedom, and having the ability to work how much I want, and when I want, and without somebody telling me what to do. I enjoy what I do, so work is not really "work." If I have to take a week or month off from working -- I can do it. But then I'll get straight back to working, because I like it.
 
Andrew Scherer said:
It is a good article if you can overlook the writing based off the literal definition of passive.

I'm sure many real estate investors would consider their rentals passive but someone still has to collect the check, maintain the place, and rent it out when its vacant. Running websites is very similar to this, too. Nothing profitable, I don't think, is ever 100% passive except maybe collecting dividends from the stock market ?

The assumption behind this article is that if you aren't working on a single passionate project for 8 hours per day you 1: can't stay competitive, 2: you're out of touch with your customer base, 3: you can't put together solid teams, and 4: it's not your passion in life.

How many of you actually meet this qualification?

Thank you for the read. I enjoyed the section about leverage.
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What about those who have rentals that are managed by PM companies? I've known people who have owned rentals for 20+ years and done nothing but collect checks.

How about high dividend stocks? I average 15% yearly dividends from stocks, outside of my initial research I haven't done anything to maintain those investments.
 
Good read. I always bitched that my boss made too much money, so I started my own biz. Later realized how much work is involved. Passion is the only thing that'll keep you going.

I eventually sold my company to do online stuff. This whole Internet advertising requires an ample amount of elbow grease.

Special Thanks to WF community for tips & tricks to get started.
 
The issues he is identifying simply don't apply to most of the things that spring to mind when I think "passive income." Has anyone ever really thought of running PPC campaigns as fucking passive? Only someone who's never before done it. I mean, you can tweak a campaign and let it make you some money while it autodegrades, but how long will that last?

Passive income is income made on a recurring basis from an initial, or minimal ongoing effort. Real estate investing, non-action-junkie market trading, some basic forms of affiliate marketing (whatever is passing for MFA sites these days, I guess WP sites with Amazon reviews on them) buy-n-hold collectors' markets (which of course almost by definition means you're indulging a passion) etc. etc. etc. There's no dangerous fantasy involved, unless someone believes there is no tradeoff between effort/risk and reward. But that fantasy is pervasive in all aspects of self-employment -- look at what Orion is saying above. I think most people think that about their bosses at some point, until they go trying to run a business themselves. It's human nature to assume you are the only one who knows the deal about anything, even your own boss' life's work. The fantasy only becomes dangerous when you refuse to wake up from it.


Frank
 
schockergd said:
What about those who have rentals that are managed by PM companies? I've known people who have owned rentals for 20+ years and done nothing but collect checks.

How about high dividend stocks? I average 15% yearly dividends from stocks, outside of my initial research I haven't done anything to maintain those investments.
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The article was more about warning people not to buy into Tim Ferriss's 4 Hour Work Week myth as opposed to earning money off investments like rental properties or stock dividends (investments != business).
 
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