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The Truth About Passive Income

By Edited Nov 13, 2013 3 1


You may here many people tell you that passive income is a great thing, and in reality, it is. Making passive income is a great concept. Passive income is

"Income derived from business investments in which the individual is not actively involved" [4486]

This means that passive income is income from an investment that you make, without being actively involved in, so if you invented a product and get royalties from it today, without participating in the development and marketing of the product, you earn passive income.  There are many ways to earn passive income on the internet. You could make an ebook and sell it,write articles,manage websites and much much more.  On the internet, passive income doesn't always work though. Sometimes you might earn royalties on a product such as an ebook or article, but if you are not actively promoting your product royalties might dry up. This is something, that few people consider when they talk about passive income. The truth is that sometimes you do have to become active.

Infobarrel is a great example of this. On  Infobarrel, one can write articles and post them on the site. Then when people visit the articles, Infobarrel keeps 25% of the ad revenue and you keep the rest. Many people will call this passive income but in reality, unless you are promoting your article, few people will see it and click on ads. This is a harsh reality for many. You may earn a few dollars if you just let the articles sit, but to make a larger amount of money, you must promote your articles. This is why, passive income is not always passive.

Another example of this is with a site called Webanswers. On webanswers users can earn money by asking and answering questions. If they provide an answer to a question that is helpful, the asker will award them an answer meaning that they earn 60% of the ad revenue from that page. This is how webanswers works. Some people say that the awarded answers you get provide passive income. This is partially true. Some of the traffic you will receive, Webanswers gives you, but if you really want to earn a lot of money from the awarded answers, like Infobarrel, you must promote your answers.


True Passive Income
It is very hard to find true passive income. You could always make something and licence it out and get royalties, but there is always a chance, that the product doesn't sell like it is anticipated to, and then you end up getting no royalties. This fact is unavoidable. In every thing, there is always a chance that no one will buy it. For some products like oil this in unlikely, but that doesnt mean it can't happen. This is exactly like writing articles, you could write an article, and maybe get a ton of traffic, but if you don't you will be forced to either accept little to no money or start promoting your articles.The key to getting true passive income is to make income off of a product that people need, like water. If you owned a underground well and you licensed it out, you would get royalties, there is a potential that the price of water drops, and your royalties decrease, but this is very unlikely, this is why If you generate passive income in a product that people need, you will probably earn income for a long long time.



Apr 29, 2014 7:59am
Thanks, nice wake up and something to put you on your feet!
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  1. "Passive Income vs. Residual Income." Passive Income vs. Residual Income. 23/2/2005. 11/07/2012 <Web >

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