Myths are everywhere and in every aspect of our lives from culture, to tradition, health, to relationship. In the midst of these said cooked up stories that we expect to be true, there is always the truth and it is that truth that usually give us a clear path to understanding and knowing the right thing to do. In finance, there is one aspect that is entrenched with myths, and it is the area of passive income.
When you ask anyone about a financial advice including those who do not have any financial literacy, they never skill the get a passive income part making it look like a holy grail to become financially successful. The believe is that all you have to do is to put that money somewhere and begin to sleep or spend the entire day in a vacation house while the money keeps printing itself but this is not how it works in reality. Actually, about 80% of the people I have spoken with believe that passive income is the magic solution to financial burden but their believes are misleading and the earlier they work on this, the better for them.
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No income is completely free of work because you have to do one thing or the other to keep the money coming. Passive income can be seen as a planting an Orange tree which is certain to give fruits all through a person's lifetime but then a lot of work is required to keep the plant alive from seed to its fruit producing stage. If those stages are not properly done, then a person might not find any tree there when they expect to start enjoying passive fruit producing.
With the illustration I just gave, think about any form of passive income you have and tell me which you would not require any form of effort either mentally, physically, or skillfully even after you might have spent your money. If you are doing house or commercial rentals, your work isn't done immediately you sign the papers rather it is just the beginning because you need to get tenants, you need to do repairs, you need to perform maintenance that relates to services. Put this same act of putting in effort into other types of passive income that you know including writing, investing in stocks, creating an online store, and many more.
If you are familiar with social media, then you must have come across online financial gurus who sell the believe that passive income is going to get you rich quickly. They do this because they want to sell something else to you especially a course. None of these people became rich by having a passive income instead they made money selling courses to people, doing adverts, and revenues from social media platforms.
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If passive income was the quickest way to make money, then investing in stocks should have made everyone a millionaire or billionaire but this is not so as the S&P500 gives an average of 10% profit annually which means that in a year, if you put $100, you are likely to get $10 additional and with this, it is not a quick way to make money. Passive income has to do with making money slowly but sustainably.
Another lie that people sell themselves is that they are not taking much risk with their passive income whereas in reality it is the complete different. When you hear of a business or investment without Risk, then you should run away as far as possible because every business and investment comes with risk and you should be willing to take the risk.