Essentials: What is Passive Income?

Many people are interested in Affiliate Marketing because they think you can get paid for doing very little. Nothing could be further from the truth. You still need to work, and work hard. There are plenty of stories about 4 hour work weeks but the years of hard grind leading up to that lifestyle are often conveniently ignored.

Still, Affiliate Marketing is technically Passive Income. This is because you can earn your dollars while sleeping. It is really a matter of logistics. If anyone buys a product at any time using your affiliate link then you will earn a commission. The same goes for this website – ‘Wealth of Writing’. The bonus is that it can be from a link you published two years ago, or yesterday. You don’t have to be standing behind a desk serving your customer in real time.

Examples of Passive income

  1. Google Adsense
  2. Affiliate Commisions
  3. Ebook Sales
  4. Youtube Channel

I just want to make clear though that it ain’t all roses. So here’s a list of Positives and Negatives.

Positives of Passive Income

1. Passive income can lead to financial freedom

When you earn passive income, you can earn it any time of day or night, and from anywhere in the world. You do not have to be tied to a particular job or schedule. Once your passive income streams are set up, the money will flow into your account.

2. There is no limit on passive income

There is nothing preventing you from setting up a hundred different streams of passive income if you choose to do so. You can dedicate as much time as you wish to establish passive income streams, and once they are set up you can sit back and collect the money. You are not limited by the number of hours you work.

3. Passive income can come from a variety of sources

This means you can choose the options that appeal to you the most. You aren’t limited or required to do work that you genuinely dislike. You have the ability to choose the work that you love.

4. You can be your own boss

When you set up passive income streams, you don’t have to answer to anybody other than yourself. You can decide when to work and when not to work. You set your own hours, and you can decide the best way to do things without interference from anybody else.

In my opinion, those are some very good benefits – and good reason enough to take the time and energy to set up an Affiliate Marketing website. However, there is always a flip side with some risks and concerns.

Negatives of Passive Income

1. It takes Time and Effort

You have to dedicate significant amount of times if you want to get passive income up and running. All passive income is active at the beginning.

2. Passive Income Streams Don’t Grow Overnight

Even if you put in a lot of effort, it may take a while for passive income to become a stream. In fact, it may start off feeling more like a series of drips rather than an actual stream.

3. You Need to Diversify

To ensure that you have money flowing in at all times, you will need to diversify. A single source of passive income is not going to be enough to help you achieve financial security and freedom. To overcome this risk is to set up multiple streams of passive income so that even if one source stops, you’ll have others in a place that is still bringing you money.

4. You Can’t Compete Passively

Technically you can create your Affiliate Marketing website and walk away. But you would be a fool to. You need to stay ahead of your competition. You need to stay relevant. While you are sleeping or on your beach in Thailand others are grinding away – in your niche. And linked to this idea of continual work within your niche is the fact that you can’t maintain your tribe by switching off. Your customers need to know you still care about your product and them. Otherwise they’ll go elsewhere.

5. It Can Be Isolating

While it can be easier to get your work done from the comfort of your house, it often means you are alone. There is little camaraderie with colleagues. For those that are easily distracted the passive income lifestyle could mean disaster for their productivity.

 

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