- Jan 15
- 6 min read

PASSIVE INCOME - A concept misunderstood by majority which keeps them in poverty.

"In an age of infinite leverage, judgement is the most important skill." - Naval Ravikant

We need to have some additional income or passive income because we already know that a recession is imminent, and that inflation is at its maximum level.

A passive income tells you that you can be successful at something else outside of your work experience, education, or your parent’s selfish wants for your life.

A passive income enables you to say, "I can use my existing skills to find a few customers who will pay me for them, rather than assume I have to settle for one safe customer (boss/company) who will innocently take advantage of that position for profit.

So, this is the right time to understand the basics of passive income to achieve financial independence and sustainability.

1. Passive income equals survival

The thought you can get money to make money, or not have to work as hard, gets the hamsters stuck on the wheel, upset. I sympathize with them.

I really did not know about passive income before 2020 and covid. So, I stayed working in my corporate job and getting a safe salary. Then I was getting pressured to do more due to Covid losses at the cost of resignation from other colleagues. In the end I had to resigned.

The goal of passive income is to provide you with security in difficult times, to get rich. The benefit of having numerous sources of income is that you will always have a way to get money when you need it most. You have a method that, if necessary, you can expand upon with extra time thanks to a second source of revenue.

2. The great debate over passive income

The naysayers despise passive income because they believe that "everything involves labour." If it requires work then it isn’t passive, they say.

Take writing online. You can earn royalties from platforms, or start a paid newsletter, or sell eBooks. Each idea requires work upfront, so it’s technically “active” work.

But once you do it for a while a lot of that work starts to compound. You make money while you sleep from the work you’ve already done. Then you make extra money for the new work you might decide to do.

Critics will say “well, that’s not passive income.” Sorry!!! It is.

3. They miss the point

Everything in life involves effort. Nobody is naive enough to believe they can earn millions of dollars by doing nothing but lying on a beach.

This principle also holds true for real estate. Many of the real estate scam artists on YouTube encourage regular people to purchase real estate so they may access the sweet, sweet passive income that will enable them to purchase a trip to Hawaii and a coconut bikini for themselves or their partner. :)

Yes, real estate is passive income. But it requires active work TOO.

You have to learn about how mortgages work. You need to understand interest rates. You have to work out ROI. You have to get good at knowing what locations a wise choice is to invest in. You’ve got to go to inspections of properties. And you’ve got to deal with the dramas of being a landlord.

Therefore, the largest passive income source in history is technically active. Nice.

4. Don’t choose lazy

Passive income isn’t about sitting on your ass and getting free money for doing nothing. The point of passive income is not to work as hard.

The phrase "passive income" should be substituted by leverage. By generating passive income online, you may leverage your efforts such that over time, a certain amount of work will generate exponentially more money.

That’s what happened generally to all those new promoters of Passive Income.

You need to build some audience traction, then content or business is automated, meaning when

the creator sleep viewers consume the content.

But when creator launch a new digital product, it requires a lot of active work upfront.

If creator programmed his brain to hate passive income and think it was impossible, it would never have found this life-changing opportunity. Expect to work. Some of that work will make you money while you sleep.

5. Learn to love work

Active work scares some people.

They want passive income because they hate what they do to earn a living.

Ideally you should never want all income to be passive. Just like school taught us to hate learning, traditional jobs have taught us to hate working.

The advantage of work you do online is it can help you love working again. You can see it as art, not work. The point is to follow your curiosity. See where it leads you.

6. Using passive income to become wealthy

Being ignorant about passive income keeps you in poverty.

Passive income should be the foundation of everyone’s income. Otherwise, you put your hands in the mercy of a corporate beast and hope they don’t eject you from next fortnight’s payroll.

I’ve been close too many times to losing my one income source. That’s why I became obsessed with learning about passive income.

You can learn about it on Twitter, YouTube, or Reddit by simply searching for it.

“Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep. An army of robots is freely available it’s just packed in data centres for heat and space efficiency. Use it.” - Naval Ravikant

7. Second Future Customer

A regular job is your first customer. You get one deposit into your bank account. A passive income may start out with zero customers.

You don’t need a lot of customers. You need a way to help a tiny amount of people who are willing to pay you something. Creating content around your passion is the best way to find customers. Content is a magnet for people who believe and are interested in what you believe.

How to Maximize Your Passive Income

Make it your habit. Work on it for the same duration every day.

See humans before they become customers.
Invest at least 20% of the passive income you make in assets, so you don’t have to work your face off for the rest of your life and trade time for money.
Educate yourself along the way. You don’t know everything. The best passion is the one you master through prioritizing learning.
Wear your passive income loud and proud. It’s okay to have a passive income.

10 specific steps how to build passive income.

1. Find the intersection between your interests, valuable skills, and problems you can use them to solve.

2. Develop an offer, create a means of distribution, connect to a simple payment processor

3. Consider the eternal markets - help someone look/feel better, make more money, have better relationships, find a deeper sense of purpose, or some combination

4. Build your offer and prioritize the following:

Focus on transformation (outcome) first, features second.
Build for someone 1-2 steps behind you, or yourself 1-2 years ago.
Identify ONE THING the offer should do to make it worth their investment (minimum viable result).
Limit your offers focus to 3 core benefits people can expect (magic 3).
Discard a "building for" mentality, adopt a "building with" mentality.
Create a minimum viable offer (imperfect prototype) that you improve with your customers/client’s feedback.

5. Build a personal brand starting with one primary channel, focused on studying and implement 3-5 creators on your chosen platform. 6. Prioritize making genuine connections with creators on a similar journey as you - seek out people you can mutually thrive, vibe, and expand with. 7. Start thinking early about expanding your reach and getting the most out of your ideas with a fractal-based content system (a fractal is a system that infinitely repeats itself in patterns). Using a tree (trunk, bough, branch/twig are all patterns/fractal of each other) as an example:

Longform (trunk, depth of idea) - newsletter, blog, YouTube
Midform (bough, key points of idea) - twitter threads, IG carousel, linkedin post and carousel
Shortform (branch/twig, width of idea) - tweets, shorts, animations, tiktok

8. Think of your fractal-based content system cyclically - it can function in reverse (single tweet does well, turn into thread, turn into in-depth email) 9. Develop like an artist (rely on study, inspiration, and insight to create) but implement like a scientist (rely on systems, frameworks, and repeatable actions to stay consistent) 10. Stay action oriented - you don't need to be perfect; you just need to produce. Just get started.

Conclusion

Simply put, passive income is a title. Avoid getting bogged down in little definitions that cause you to overlook the greater picture and make you poor. Your life can be changed by passive income. It functions as insurance. It enables you to work less. It provides you with online sway. Your income sources become more diversified in case a severe, terrifying recession occurs later this year.

Everything requires work, so nothing is 100% passive — get over it!

Use the 80/20 rule: Go from 100% active income to 80% active income and 20% passive income.

That’s how you get started.

“If you don’t find a way to make money while you sleep, you will work until you die.” - Warren Buffett

Thanks for reading and before you go…

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