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Making money while you are hanging out with friends or even while you are sleeping. It sounds impossible, right?
Creating passive income streams is not easy, but it is certainly not impossible.
Here are the top passive income myths dispelled.
Myth: Creating passive income streams is fast, easy, and effortless.
Reality: Many self proclaimed “experts” try to sell you a dream with this one, so that you can buy into one of their get-rich-quick schemes. They know that everyone would love to see quick results with the least amount of work and resistance – so these “experts” try to appeal to our lazy side. However, generating passive income does not happen overnight and usually takes months or even years of dedication and hard work before anything comes to fruition.
Myth: Generating passive income is a myth.
Reality: I believe this one came about as a direct result of the above myth. I am almost certain that some people, unfortunately, bought into one of those get-rich-quick schemes and have been so discouraged from the lack of results that they no longer believe that generating passive income is even possible. I am also fairly certain that some people are just so turned off by the upfront costs (i.e. time, work, and money) that they convinced themselves that passive income streams do not really exist.
Myth: You need a significant amount of money to create passive income streams.
Reality: Yes, it usually takes money to make money and some passive income streams do have a high upfront financial cost. However, there are many passive income streams you can create, without breaking the bank, such as starting a blog, buying dividend stocks, or building a smartphone app.
Myth: Rental properties are the best source of passive income.
Reality: Rental properties are one of the most sought-after passive income streams – probably because they are easy to understand, can yield a high monthly income, and there is the potential for the properties to appreciate in value. However, rental properties are not without issues. Some common issues include bad tenants that are either late or do not pay their rent checks, months or even years of vacancy, and expensive upkeep and repair costs. For some people, who are fortunate enough to never have any of those issues, then their rental properties may be their best source of passive income. However, for those who have to deal with any major issues, their rental properties can be absolute nightmares and can even be causing them to lose money instead of making it.
Myth: Once you set up a passive income stream, you can just sit back and never worry about it again.
Reality: Even though passive income is income that will keep coming in even when you are not actively working for it, it does not mean that you can just set it and forget it. For example, if you created a smartphone app, you will still need to maintain it by making sure that your app is compatible with any new smartphone software updates. You may also need to spend some time and money, every so often, to advertise and market your app.
Hopefully, this article gave you a clearer picture of what passive income is and isn’t and will help you set realistic expectations.