Passive income, like renting out property, is not passive.

Financial porn bugs me. The latest version of financial porn filling my feed and annoying me centers on “passive income.” Let me vent my annoyance.

The Problem With Passive Income

These articles and posts claim to offer various ideas for generating meaningful income with little or no work.

The problem is, all the ideas involve either a) work, b) having spare money to invest, and/or c), meaningless returns.

Two big ideas dominate these. One is renting out property either by being a landlord or AirBnB host/ The other is operating a money-making website or blog. These are not passive endeavors. I’ve been a landlord and a blogger for years. Each involves active and ongoing participation.

Passive income posts also encourage readers to invest money to generate returns. This activity is closer to the spirit of passive income. However, it assumes and requires that you’re already generating free cash flow. How else would you amass capital to invest? Inheritance, maybe. Plus, if you are withdrawing income from your investments, you’re missing out on the power of compounding, which most people need to help build their wealth.

Finally, these posts flog various activities that look pointless to me. These include getting paid a few dollars for taking online surveys, giving algorithms access to your inbox, and other simple online activities. These still require you working at your computer, the amounts that you earn from these are paltry, and the privacy you surrender is significant. Also, it reminds me of the adage about online life: if you can’t figure out what the product is, then you’re the product.

If you enjoy any of these activities that also generate some money, great. But don’t get sucked in by the false promise of “passive” income.

 

(Image courtesy of WikiMedia)

Passive Income Is Not Passive
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