The myth of 'passive' income

Passive income doesn’t exist.

No matter what some internet marketer has told you, income is never truly passive.

All income is just more active, or less active.

With each stream of income operating on a different time horizon.

Take freelancing for example. The income is very active — you’re only earning money when you’re sat down doing the work. And the time horizon (the amount of time it takes to earn money) is very short — you can practically make money straight away.

The problem with freelancing is that you have no leverage. If you’re out sick there is no income.

Compare that to selling an online course. You create the course once and sell it multiple times. This type of income is less active than freelancing but it’s never fully passive.

After you’ve made the course you still need to do marketing, offer support, and update the content.

The time horizon to being able to make money from an online course is also longer — you need an audience who trusts you, something that doesn’t happen overnight.

No form of income is ever truly passive but there are many types of less active income.

Often the best path is to diversify between active and less active income, building an antifragile portfolio.