Why You Need to Stop Wasting Your Time Chasing Passive Income

by Martin

“I don’t want to work 12-hour days. Why would I work all of the time? I want passive income. I want to enjoy life and not work.”

Does this sound familiar?

Ever since the 4-Hour Workweek book came out a few years ago, everyone that read the book has been chasing passive income. I personally enjoyed the book and have it on my desk for reference. I just don’t like the philosophies it has instilled into 20-somethings that are now chasing this passive income dream.

I wanted to take some time today to tell you why you need to stop wasting your time chasing after passive income:

You need to make some money first.

I introduced a freelancing challenge last week for a reason. Before you can make passive income or create a muse, you need to make some money first. This means that you need to increase your active income before you do anything else. If you’re not making any money now as a college student or your income is low in your years post-college, then your primary goal should be to make more money in general.

When starting an online business or getting income from freelancing, you need to work for it first. Once you work for your money, get a service that people care about, and build some savings, then you can worry about passive income.

You won’t get rich quick.

“Our goal is simple: to create an automated vehicle for generating cash without consuming time. That’s it.” — Tim Ferriss

If you’re trying to get rich quick, you should probably stick to trying to win the lottery or to hit it big at the casino. The idea of starting a business that makes thousands of dollars per month passively while you can focus on your sand castle building passion is inherently flawed. When trying to build passive income, you need to immerse yourself in the field.

For example, for you to help someone with freelancing, you have to first become a successful freelancer yourself. You can’t build sand castles all day while you passively grow your freelancing business. I’m not saying it’s impossible. I’m just saying that you won’t get rich quick from chasing passive income. Especially if you’re afraid of a little work.

You need to stop being delusional.

“The week that Tim actually works a four-hour work week will be a cold week in hell. Tim got to where he is by being an insanely hard worker.” — Penelope Trunk, a critic of the 4-Hour Workweek

The other problem with passive income is that there are far too many delusional people. There’s nothing wrong with a little work. You need to stop being delusional about creating $20,000 a month in passive income. You need to make $20 first.

You have to take action.

Instead of chasing perfection, it’s important that you take action. There are many passive income opportunities that don’t require a ton of money to get started. You might have to work a little harder though.

A perfect example here is publish eBooks on your own blog or submitting content to Amazon for Kindle. You have to take action. You have to research a topic, write the book, format it, publish it, and then promote it like crazy,. Action is needed.

At the end of the day I totally support passive income. I’ve already established a few sources of passive income that I’m proud of. I just want to stress that you need to work a little first. When you build yourself up, you can invest your time and money into passive income sources.

Are you chasing passive income blindly?

I hope you enjoyed this piece!

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{ 14 comments… read them below or add one }

1 Edward Antrobus

My main issue with 4HWW has always been Tim Ferriss’ attitude about it. He finds loopholes to exploit rather than making the effort to master something.
But you hit the nail on the head with this post. Most passive income streams aren’t really passive at all.

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2 David Weddell

It really depends on how someone defines “passive.” Specifically, Tim Ferriss may define it as not having to work 9-5 in an office somewhere, he is able to set his own schedule to write, make appearances, speeches, etc. I would also imagine he spends a huge amount of time researching for whatever is next for him.

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3 MD

That’s true. I imagine that there’s plenty of work involved, just like there is with any project.

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4 Ryan OLoughlin

I’m actually re-reading the 4HWW right now! It’s packed with value, but it’s just his marketing gimmick; he probably works harder than most people ever will. He is just trying to sell it the masses who hate their jobs and want to travel around the world. So I guess you have to take his title and arrogance with a grain of salt. Good point about people who want to make their first $20,000 in passive income, Martin. You have to focus on your first $20, first. And you have to take action. A lot of people think they are going to read this magical book and that’s all they have to do to make money….

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5 MD

Good points Ryan. It’s interesting to see how we all interrupt the book differently. One friend took it that he doesn’t need to be involved in small startup companies that plan on doing 12-hour work days because it’s not passive income.

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6 Dollar D @ The Dollar Disciple

The 4HWW has definitely spawned about a billion blogs who blog about blogging and passive income.

But you’re definitely right: you have a work at it. You could even go so far as to say that setting up a passive income stream (and maintaining it) is a job in itself. There’s very few sources of passive income which require little to work and these usually require money instead (which itself represents previous work).

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7 MD

Yep you’re right. Passive income has become a popular topic. I’ve researched it in great detail. You won’t make any money if you’re afraid of work.

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8 Twister

I agree with guys above.
In my opinion 4HWW is inspiring people. They start to think about their’s life and possibilities to change them. This is similar as with the books of Robert Kiyosaki. Everything seems to be easy when you are reading a book. But when you want do some action…

If you want to make passive income you have to work hard and smart on the beginning, there is no other way. But on the end it’s worth to do that!

Regards and good luck.

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9 MD

Thanks for your first comment here.

Have you been working on passive income?

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10 Twister

That was a pleasure!

Yes, I’m working on passive income all the time. I’ve got little success but it is more like Ryan said – the first $20 ;)

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11 Manu

Passive income is the goal of everyone. Eventually, age takes its toll and you cannot continue working actively. However, you make a good point, work is still involved to get there, as it can take years to build assets that generate passive income, and even then they all require follow up.

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12 Sandra Davis

Ah, MD, I wish there were dates on your posts/comments so I could tell how fresh they are.

Good article though, and you’re dead right that passive income does not come over night or in large doses at first. More like the drip of a tap rather than a flood! At least that’s how it’s going for me. Perhaps some day it will grow into a trickle, maybe even a stream.

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13 MD

Thanks for your visit Sandra. Oh and for the dates, I took it off because I don’t want you guys to avoid a post just because it’s older.

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14 Sandra Davis

I thought that might be the reasoning behind it! From all the interactions you seem to have with your readers, I probably shouldn’t worry about the liveliness of the site.

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