Passive income is often touted as the ultimate goal for those seeking financial independence. The idea of receiving a constant stream of income without having to do any work sounds like a dream come true. However, the truth is that passive income is not entirely passive. Every dollar that comes into your life has some form of underlying time, effort, or activity attached to it.
Passive income must be built, bought, or in many cases still requires a little ongoing maintenance. For example, if you invest in dividend stocks, you will need to do research to find the right stocks to invest in and then monitor their performance. If you own rental properties, you will need to manage tenants, handle repairs, and ensure that your properties are in compliance with local laws and regulations.
So, is passive income a complete myth? Not necessarily. Having your “money make money” is the ultimate goal in all our wealth-building journeys. We should all strive for it. However, the end goal and the starting point are very different. To grow a money tree, you’ve got to plant the seeds and put in the work. We prefer the term “leveraged income,” which means leveraging your time, effort, or resources now in exchange for a long-term income stream later.
It’s important to remember that what you see on social media or from “influencers” is often just the flashy top side of the iceberg. You’re likely only seeing the results of their hard work and not the invisible underbelly. It’s easy to get caught up in the allure of “passive income” and forget that there is always a cost involved, whether it’s time, money, or effort.
In conclusion, while the concept of passive income may sound attractive, it’s important to remember that it’s not entirely passive. Building a reliable income stream takes time, effort, and resources. Instead of focusing solely on passive income, we should strive to create leveraged income streams that will provide long-term benefits. Remember, every dollar that comes into your life has an underlying cost, but the rewards of building a sustainable income stream can be well worth the effort.
What are you working on to create passive income? Investment properties? Dividend stocks? Let us know in the comments.
