50. Debunking Passive Income

So… you want to build a passive income online?

In this episode, we dig into the deceptive aspects of passive income and how it can harm individuals striving to earn money online.

The world of passive income is unfortunately flooded with misinformation and empty guarantees. We’re diving into what it takes to actually create passive income, and what the correct way is to refer to these money-making methods!

We share our personal journeys in creating passive income streams and emphasize the significance of building an audience, putting in the work, and establishing a strong foundation before embarking on passive income generation.

Join us as we debunk the myths and share the real secrets to building a successful digital nomad lifestyle.

You'll learn how to:

• Be critical of the claims of 100% passive income
• Recognize the damaging effects of misleading information
• Build true passive income, and what it takes

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Chapters

• 3:08 Passive income requires hard work.
• 9:15 Scalable income offers unlimited earnings.
• 11:10 Passive income requires effort.
• 15:31 Fight for what you want.

Transcript

0:58

Hello and welcome to the Profitable Nomad Couple podcast. This is a show where we share all of our secrets about building a sustainable location-independent lifestyle. We're Austin and Monica. We're a digital nomad couple here to help you develop an entrepreneurial mindset, ignite your passions, and develop a purpose-driven online business. Get ready for weekly insights and inspiring stories to empower you to live life on your own terms. So are you ready to unlock the nomad mindset and embrace a life of limitless possibilities? Let's dive in. Hey guys, today we want to tackle something that has been on our minds for a while. This is something that we've seen over and over again in people that we have conversations with. And it's a little bit of a soapbox that we want to hop onto and share some of our thoughts income and how we see it actually being more of a problem. Yeah. So this is actually a little bit of a controversial topic and we really want to share our take on how there's a lot of misleading information out there and how damaging it is and how much we have seen it be damaging to people who are trying to start making money online and trying to start their digital nomad journey and they're trying to really have that freedom that they're craving, but they're being fed all these lies and half-truths and false promises and it's really, really, really damaging their own courage and their own confidence in their ability to break free from the traditional nine to five and to be able to travel the world. So that's kind of where we're coming from on this episode. We really want to kind of start breaking the stereotype down a little bit and helping people realize that it, like seeing it for what it is, that it is misleading. It is a lie in a lot of cases and that you have the ability to be successful even if you've tried these things before and failed. That was a much better introduction than the one I gave. That was very well put, Monica. And we have noticed, I don't know, in the past several years there's been this rise of people talking about passive income and that's what everyone seems to be chasing after is passive income. How I think of it and how I define it and I think this is how a lot of people are thinking about passive income. This is money income that you don't have to work hard to receive. It's income that requires no effort on your part to earn or to maintain. It just flows effortlessly into your bank account. And maybe it takes a little bit of work to set it up, but once it's there, you know, people always talk about make money in your sleep and that would be the dream, right? If you could just wake up and have a new $3,000 in your bank account every other day. So I obviously understand why it's so enticing and why we want to chase after this and why we want to create something that's sustainable and continually brings in revenue without a whole lot of work. But when we hear people talk about passive income, for the most part, what we normally hear them talking about are things like creating a digital course, an online shop, digital products, ebooks, affiliate marketing, template shops, things like that. The problem is these things are not passive income. They require so much work to create, to maintain, and to continue selling. When you have clients or customers who have bought into these things, you have to continue serving them. For example, if you are selling a website template shop, you can sell to these people, but then what if there's a problem? What if they need help with something? What if there's a technical issue? You need to have some sort of support, some sort of email support where you can chat with them and help them figure out the problem. You're going to have to do continual launches, not just once when you create it, but multiple launches, probably multiple a year to continue selling these things to create that income. So I'm not saying they're not good ways to make money, but I do want people to know that they are not passive ways to make money. They take an extreme amount of work. And we know because Monica and I have tried some of these. We've tried creating an online course, we've tried affiliate marketing, and we put a ton of, I think for two months we worked on creating, two, maybe three months we worked on creating a course. We didn't do anything but create the course. And then we had all these amazing resources inside. We planned this awesome launch and we had a very thorough thought out two, three week launch strategy and not a single person bought it. Nobody was interested. And there's things that you can do to set yourself up for success when these things come. I mean, for example, if you have no audience, if you have no one that's listening to you before you launch these things, you're not going to have anybody to sell to. Yeah, I mean, these things just take work and they take time. Yeah. And I think that's part of the really damaging thing about these stereotypes that's being passed around is some people are able to launch a course and have it be really successful. For example, Tony Robbins, if he launches a course, of course, a ton of people are going to line up to buy it, right? Jenna Kutcher, you know, there's so many people who, if they launch a course, they barely have to do anything to get people to buy it. And that's because they have already built up their business. Because they have already built up their audience. They've already proven their worth. They've already done all of the work ahead of time. They've laid the foundation. And so it becomes this really damaging lie that we start to believe that anybody could launch something without a ton of work and just make a butt ton of money from it. But that's just not true, right? And Austin and I are living testaments of this. We honestly, we poured our heart and soul into this course that we created. We were super excited. Everything we knew we were pouring into it. And I mean, it was probably a good like two to four months where we wouldn't make any money in our business because we were creating this course. And we really believed that after this course launched, that it would pay us back for the time that we spent. And the thing is that it often doesn't unless you've already built your business up around it. And I heard, I mean, we learned from Dean Graziosi about course creation and all these things. And the thing he said that really makes all the difference is that after you've created your course, your job then is 90% of the time to be marketing that course. So even if you're making money off of a course, you need to be actively going in and marketing it 90% of your time. That's what your full time job is, is marketing this course. So you're not going to just be an overnight success like after you publish this course and people aren't going to come. You need to go out and find them. Yeah. Let's not build it and they will come. People think about set it and forget it or one and done. But it's hardly if ever like that. And I think Monica, you started to talk about this already. But what we've seen in our clients and in people that we have conversations with who are interested in this is they have these hopes that they can create passive income, which I mean, we've already talked about what people think that means. And then they jump into it and then they're super disillusioned by how much work it actually takes or they put money in, but then they don't get the return that they wanted. So they start to believe that whatever course or program sold them this idea of passive income, it's not working for them. And maybe there's a different course, like maybe there's something wrong with the instructor or the coach or whoever taught them this. And so they bounce around from program to program and course to coach and they keep searching for this passive income because the ones that they've tried haven't been the right fit for them. Well, that's because it doesn't exist and they keep searching for this thing. It's like trying to chase the end of a rainbow. It's not there. And so you're never going to catch it. Yeah. And I think actually the more damaging thing that happens is eventually you start to blame yourself and just think that I'm not cut out for making money online. I've tried all these things. I failed at all these things. None of them have worked for me, but supposedly it's working for other people. And so then you start to doubt yourself and just think, oh, well, maybe I don't deserve to live that life. Maybe I don't deserve to make money. Maybe I'm not able to make money. I'm not skilled enough. And it's just a really big spiral of like hit to your confidence over and over and over again because it's not working. But here's the thing is it was never set up for you for it to work. So it has nothing to do with you and your effort and everything to do with the way it's been framed and the way that it's been talked about. Yeah, definitely. So what's the right way to think about this? I think there's two different things. One is these income streams like the ones we mentioned, digital courses, online shops, template shops, affiliate marketing. What these things are. This is something that we learned from Elizabeth McCravey. I'm not going to take credit for this, but she calls these things scalable income. So this is a one to many model, meaning it doesn't matter if you have one person by your course or if you have 500 people by your course or 2000 people by your course. It's the same amount of work to create the course and to launch it. And then it's just, I mean, there is a small level of if you have, you know, 10,000 people in a course versus two, there's going to be a little higher level of support to give those people. It doesn't really matter how many people buy it. You do it once and you can scale it. So that is definitely something that you can create something that's a very smart way to to do earn the most amount of money for the work that you put in is to create something that's scalable. You have with these scalable incomes, you have the potential for basically unlimited earnings without your time limitations. So that's the benefit to this. Yeah, I think that's a really good point, Austin, is that these things aren't inherently bad. In fact, these can be a really good addition to your business. These could be a really smart way to make money and make a lot more money without the limitation of your personal time. But they are not passive. So the danger of these is not the act of creating this course or this affiliate marketing or whatever you end up doing. That itself is not inherently bad. It's your mindset going into it because you've been sold that you can do it once, set it up once, and then it's going to take care of you for the rest of your life. And that's not how it works. So we just like just to get really, really clear, these are really good things to include in your business eventually. But this is not what's going to start making you money tomorrow. Yeah. So the two things that I mentioned, I mean, one way to look at this is to to reframe your thinking and instead of thinking of it as passive income, think of it as scalable income. But then the other thing we wanted to mention was to like honestly just challenge this idea that you can make money without effort. Who in the history of ever has made has become successful, has made money without putting in work, without effort, without discipline. Like it doesn't work that way. That's not the way the world works. You have to put in time, you have to put in your, you know, your hard. They paid money off of somebody else's effort. Yeah. I mean, there are exceptions like earning an inheritance from somebody. like anything worthwhile, anything that's worth running, that's worth growing like an online business or any online income stream, it's going to require effort and time, years even to build it up and turn it into something successful. Yeah. I just want to kind of like interject here and say, I do believe there are kind of more legitimate passive incomes that would include investing in stocks or bonds or maybe real estate, like depending on how you have it set up could be a little bit more passive if you have like a property manager or something like that. And these are things that are more like you put money into it, hoping you get money back. So instead of like maybe the currency of time that you're spending on it, you're actually putting currency like money into it with the hope that your money grows and you get it back. I would even challenge that idea. Like in order to make money from these types of things, real estate investment or stocks and bonds, like the work comes from the research and years of education, learning the right and smart investments to make. You're not just going to wake up and become the world's best day trader. Yeah, I mean, that's fair. I mean, day trading itself is not passive, but just there are examples that maybe fit more into that passive income model. But I mean, it could be argued either way that they're not actually as passive as we would like them to be. So the truth behind running an online business is that you have the ability to be super successful, but it's going to take some time to get the momentum going. It's going to take some time to build up your audience. It's going to take some time to build up your product or your service or whatever it is. And it just requires your effort and your dedication and the amount of success as possible for you is equal to the amount of effort that you're willing to put into it. I love the story about Messi, who is possibly the world's greatest soccer player. He is a fantastic soccer player. And he, when someone was asking him like, hey, like what, you know, how does it feel to be an overnight success? This is what he said. It took me 17 years and 114 days to become an overnight success. So a lot of times we see people being wildly successful. We look at Jenna Kutcher and we're like, man, that was easy for you. Or we look at Tony Robbins or Dean Graziosi or all these people who are making millions of dollars every year. And we're like, wow, that was so easy for you. But we just see the tip of the iceberg. We don't see everything underneath that laid the foundation for them to be that successful. And so it just takes effort. It takes work. It takes determination. But every single person has the ability to do it. Every single person has this potential within them to be making more money than they already are in their business. Yeah. I mean, you're not going to see all of their late nights and long weekends and all of their failed attempts. You might hear about one or two, but there's a lot of failed attempts behind all of the success stories. And part of the hard work too is failing and then getting back up and continuing to try. Yeah. So if there's one takeaway we want you to leave this episode with is to be critical of the claims of 100% passive income. We want you to recognize that there is effort. You can make money from doing almost anything online, including the marketing courses and all of these things that are generally advertised as passive income. But you do have to work at them. So make sure you're being critical of that. Kind of reframe your mindset around it. If you've tried these things and failed, you're not alone. We have also tried these things and failed and it's not, it has nothing to do with you. It just, you just got to reframe your mindset around it and really like put in the work to do it. There is literally no end to the amount of success you can have if you are willing to put in the hard work. And so that's just what we want to leave you with today is just to encourage you to fight for what you want and to go after it. And just so that you know, I'm 100% confident that you can do this. Thanks so much for joining us here on the profitable nomad couple podcast. We appreciate you listening to us today. If you enjoyed this episode, share it on Instagram and be sure to tag us at awesome and Monica Together we can inspire others to embrace a location independent lifestyle. And while you're there, we'd love to connect with you. So make sure you follow us for more tips and inspiration on living your dream location independent lifestyle. Until next week, remember that you have the power to shape your own path. So stay curious, stay adventurous and stay connected.