The other day I was having lunch with a good friend in a restaurant here in Kiev, Ukraine. After catching up on the usual stuff, we switched to business topics. I told him some of the things I’m working on. He shrugged his head and asked if this stuff was truly passive. I explained, that, yes, it’s definitely truly passive.
While he was still somewhat confused and unconvinced, I knew that it is something I must accept because most people are somewhat skeptical of this.
If there’s one term out there that creates as much confusion in the entire “location-independent” and “make money online” topics, it would be “passive income.”
These two words have been thrown around so much that, over time, they’ve taken a new meeting all onto itself. In other words, “passive income” no longer means what it originally supposed to have meant; it now means things like freedom and the chance to live in beautiful Rio de Janeiro while dating gorgeous Brazilian women.
It’s hard to fault the Internet for this. In many ways, guys like me are partly responsible. After all, it was guys like me who helped popularize this term many years ago and continue to do so today.
Additionally, lots of people have also been politicizing this term because, well, it’s a good way to rally people to your cause or get them to buy whatever you’re selling.
For instance, these days it has become popular to either say that passive income is “complete bullshit” or take the complete opposite side and claim that passive income is closer to God and is the answer to everyone’s problems.
This is a testament to how polarizing this term has become.
Does passive income exist?
Still, the question remains, does passive income really exist? Can you make money passively—that is, without actively working on it?
Of course, without all the bullshit and the snake oil shit.
Just the raw the truth.
The raw truth is that, yes, passive income does exist. But it’s a lot different than what most people think.
Everyone knows that famous big company in Redmond, Washington. It’s called Microsoft. As of this writing, Microsoft just passed Apple as the world’s most valuable company.
The co-founder of that company, Bill Gates, no longer works there. But he’s still getting richer every day.
Why? Because he still owns stock in the company. When the stock increases in value, he makes more money.
That’s passive income.
Though, that’s probably a rather extreme example. After all, not everyone is a co-founder of a multi-billion (almost trillion) dollar company.
Let’s say you start a business. It becomes successful. It grows to a point where it’s making decent money and everyone is getting paid.
The business is generating revenue from selling quality products to other businesses.
At this point, you’re still working on the business, so you’re not technically making money passively. Later on, you hire someone to run the company. At this point, although you’re no longer actively involved in the business, you’re still earning money.
What just happened?
Now, you’re earning passive income.
The purest example of passive income is a business. The entire point of starting a business is to have passive income.
When guys like me talk about passive income, we’re specifically referring to starting an Internet business. An Internet business can be any size and of any complexity.
It can be as simple as a one-page website that sells a certain product or service to a complex e-commerce store that either drop-ships products or fulfills them out of its own warehouse.
It doesn’t really matter.
The point is that there’s a store out there, on the Internet, “in the cloud” and it actively converts products and services into cash.
Of course, for this store to be successful, different skills must be employed such as marketing, writing, copywriting, design, programming, and sales just to name a few.
These skills correspond to specific departments in some big corporation.
It takes a while to get going
While passive income may seem the golden goose that forever lays golden eggs, there’s a caveat: it takes a time investment to reach this phase.
Unlike a regular 9-5 job, where you get paid a set salary from day one, with passive income, you need an initial time investment before you’re able to make money painlessly.
That time investment varies from several weeks to several years, depending on what you’re trying to do.
At the one extreme, you have the startup culture. I spent over ten years of my life in Silicon Valley working for all kinds of startups as well as huge companies. So, I know a thing or two when it comes to startups.
The purpose of a startup is to compress future wealth into a very short amount of time. So, you hustle for 3-4 years like crazy, expecting to make a good amount of money when the dust settles.
Then, if you’re one of the lucky ones who happens to actually build a successful startup (95% of startups fail), you can hopefully go public in few years and become a millionaire/billionaire.
On the other side of the spectrum, there’s the Internet passive income. You pick a topic, build a website in this area to address a particular need, monetize the website using some products or services, let it organically grow and then reap the rewards.
Unlike the startup scenario above, where you’re expending the maximum effort for the maximum reward, the website can easily generate anywhere from $500-$2,000 per month (usually much more) without breaking a sweat.
Regardless of how you slice and dice it, proper time must be invested before you’re able to wake up and have $100-$1000 deposited into your bank account.
If you ask me, however, I believe the initial time investment is very well worth it.
Of course, not everyone agrees. That’s perfectly fine as the world does need gravediggers, too.
The greatest force in the world
The ability to work on something for a set amount of time, unleash it onto the world and let it grow on its own is one of the most powerful forces in the entire universe.
It’s almost like you’re creating a unique organism from scratch that absorbs energy from its environment and grows on its own, all while spitting out passive income in the process.
That’s a hell of a lot different from the 9-5 system where you’re getting paid a fixed salary for continuous low-level work that results in you building zero capital and assets.
While I’ve had my struggles and failures, there few things in life that I detest more than sitting in some fluorescent office and engaging in continuous low-level work all while receiving a fixed salary regardless of my efforts.
But for people who live this life, things like “passive income” is a concept shrouded in mystery and fear. Whereas for most businessmen, it’s a natural outcome of their labor, for most 9-5’ers the fact that money can create more money is as a foreign concept as speaking Swahili.
But if freedom is what you want, mastering passive income is what you must do.
That’s because without passively making money, you don’t have freedom; you either toil for money (and not have freedom) or enjoy freedom while money passively gets deposited into your bank account.
That’s also why I work with a very limited number of people as part of the Maverick Mentorship program. The mentoring just isn’t as scalable as my other more passive-income businesses.
Interested in building your own passive, location-independent business? Want to avoid needless trial and error? Want to start off on the right foot under proper guidance?
Check out the Maverick Mentorship program. It has helped 100s of guys just like yourself to build their own business. Click here to learn more