Myths About Residual Income
March 6, 2012 7 Comments
It is the dream of every millionaire wannabe – to get rich quickly and with minimal effort. We want to win the lottery or get a big inheritance. Barring that, how about some residual income? We can go to sleep while money keeps flowing and flowing into our bank accounts.
Residual income can certainly help you become a millionaire, but there are many myths that will keep you stuck wanting to be a millionaire without actually becoming one.
Income is Passive and Takes No Effort
Earning money while you sleep means you don’t have to do any work to get it, right? You sleep while the money keeps rolling into your bank account. That’s why it is called passive income, because you can be passive.
One of the aspects of human nature is that we tend to minimize work other people do while we exaggerate our own efforts. We see other people with their wealth, and think that it must have come without much effort at all. The media and the public, even the wealthy, make it seem so easy, that it becomes hard to remember that there is effort, initially and ongoing to acquire and maintain wealth.
The truth is that residual income does take work. There is the initial research of choosing the right residual income source. Then there is the set-up. Let’s say you are choosing a rental property. You either have to make or find the money to buy the rental property. Then you have to find the right rental property, negotiate the contract, and attend the closing. Even then, you have to keep up the ongoing work of collecting the rent and fixing up the property. You have to pay the loan and the real estate taxes, and meet the building code requirements. It really isn’t as easy as making money in your sleep.
Here’s another example. You can buy a business and hire a manager to run it for you. Of course, building a business may have been cheaper, but it may be easier to buy an already established business. Once you hire the manager, you will still need to monitor him to make sure he doesn’t run off with the money or start his own business and take off with your customers.
You Have to Buy the Right Book, Attend the Right Seminar, or Take the Right Class, or Join the Right Program
You’ve seen the offers – come to this hotel and we will give you a seminar about how you can get rich quick and easy. We will even give you a free gift just for attending.
I fell for one of these offers. As a poor person, and before the internet, I had no idea about how to get out of poverty and join the wealthy. I figured I would be willing to give up a few of my hard earned dollars to become one of them.
I attended one of these seminars, and it turned out to be a sales pitch to attend a class, and buy some books. And let me tell you, they make it very hard to return the stuff and get your money back. Very hard.
If these people were so rich doing what they were trying to tell us to do, then why are they wasting their time telling us how to do it? Why sell books and seminars?
If anyone asks you to give them money so you can make money, run. Run fast. Sure, they may have some tips, but you can find the information for free online. If it really was as easy as they say, they wouldn’t want to share the information with their competitors, which is what you would be if you followed their plan.
It Takes Money to Make Money
This is sometimes true. You can’t earn interest on money unless you have it to invest, and you can’t buy rental property until you at least have a down payment and good credit rating. But there are many ways to get residual income that do not involve an up-front cash payment.
Giving money to a person or company in hopes that they will show you the way to income while you sleep will not help. That money will be put in their pockets, and you will come out poorer than you were before.
Build It and They will Come
There are people who understand that residual income takes a lot of hard work at the beginning. They set up a business or write the great novel, and then go to sleep waiting for the money to come pouring in. All of this takes a lot of work. But the money doesn’t come rolling in.
Once the business is up and running, or the great novel is written and published, there is additional effort that must be made in the form of marketing. You have to get the people with the money to know about your endeavor, and you must make them want to try your product. And you have to keep them coming again and again to keep the business viable in the long run.
Why Residual Income Myths Prevail
The reason residual income myths prevail is that they do have some truth in them. There are people who have made lots of money, and have residual income sources. There are programs you can join that will help give you a step up to get there faster. There is information about how to get residual income that can be useful.
Before starting on the path of residual income, you have to make sure that you have the right information and have a reliable source. You will have to understand and be willing to do everything that you will be required to get your endeavor going, and be willing to take the steps to keep it running. Then you will have to take all of those steps. By then, you will be really tired, and hopefully by then, will be able to earn money while you sleep.
I agree with all your points, which are stated very well. In addition to no. 4, I would say that you have to produce something that people want to read. A bad novel, for instance, will do badly no matter how well it is marketed. Some people expect to make money with articles about their pet getting sick, or other personal material, which is unlikely to be sought by a wide aduience.
In a very real sense, marketing begins before you’ve even written a word, in that you need to find out if there is a market for what you’re producing.
All of this information is so true! People need to know it is just not as easy as they think it will be. A lot of people going into their respected profession believing at some point the money would be rolling in with little or no effort. Wrong!!
HA if only it were this easy!!!
So true. This should be taught in school…Scam101. Everything in life that is worth anything takes hard work, commitment and persistence. Nicely put.
I’m glad you mentioned the seminar thing because I too went to one of those things before college thinking I would get some good advice about getting financial aid to pay for school but all they wanted was to sell me an expensive and unnecessary service. People should be aware of scams like this.
hard work > luck
you mean to tell me it’s not easy? well i’ll be damned xD