passive income is a lie
Blog

Alamat Ng Passive Income

Ano Nga Ba Ang Passive Income?

 Passive income is earnings derived from a business that  a person is not actively involved in. Passive income is income that requires little to no effort to earn and maintain. It is called progressive passive income when the earner expends little effort to grow the income.  In short, kumikita ka kahit halos wala kang ginagawa.

Passive Income Examples

Income from rental properties are considered to be a passive income. Income from an online business that requires work upfront, but once it is launched and successful, it can run on its own without your day to day oversight is considered a passive income. Profit from stock investing is also considered by many as passive income.

I have a rental property in Subic. My sister has a number of apartments and condo units she rents out. It gives us good income but there is nothing passive about it. It starts from choosing/finding who will rent to constantly monitoring their activities. Setting up a person we can call if their are things needed to be fixed. Bayad ng necessary fees at taxes. Hanap ng maglilinis. Now it’s a lot better kasi may AIRBNB na but still a lot of work is being put into renting out a place for the income to be called passive. I have a lot of crazy stories about people who rented out my place but that would get us off the topic. When I see people in seminars describe income from renting out a property as a passive income I usually shake my head. They probably don’t have any experience on having a rental property. If you think you’re going to build a business where you can sit back and be passive, then you’re surely fooling yourself.

Income from e-books are considered to be passive income. You write it once, post it as available for download, and watch the cash roll in as people buy the book electronically and download it automatically. that is how someone with no experience in making an e-book would describe it. First, You have to spend months researching and writing the book. That’s only after you have a valid product idea based on your extensive knowledge of your target market’s needs, learned from years of directly working with them. Then you have to spend even more time learning all the technology necessary to create the book and implement the automated sales system. You have to invest in the cover, software, and monthly overhead to run the system. You also have to spend more time learning how to market the book, which involves implementing all the marketing tasks so people who need the solution contained within the book can find it. Then you have to answer customer inquiries when someone can’t download the book, and answer questions from paying customers after they buy the book. You still have to account for your sales by maintaining proper records, filing the company tax return, getting a government business license, satisfying trademark requirements, recording the ISBN number, battling copyright violators, etc.

Ebooks, membership sites, royalty income, and all the other models bantered about in the get-rich-quick / lifestyle-entrepreneur world are leveraged income models. They aren’t passive income.

Investing in stock market. I will discuss this one later.

 Passive income, like the unicorn and leprechaun, is a myth. It makes for great stories – and lots of sales, but it does not really exist.

Network marketing companies are built on this dream, seminar promoters have gotten rich selling it, and neophytes love the concept. In short, selling the passive income dream is big business. 

You can “set and forget” your revenue streams.

We all like the idea of not needing to do any additional work after setting up a blog or online store. But, real life is never so simple. Blog visitors expect new content on a consistent basis. People who enroll in an online class expect personalized support when they encounter a problem. The internet itself is constantly changing. Even when you delegate responsibilities, you’ll need to check in with your team to make sure tasks are being performed up to your standards. 

Youtube

How about income from Youtube? Look at how vloggers struggle to find new contents for their Toutube channel. There are a lot of efforts being put into the videos they posts. You often see this ads on Youtube where they say things like “And while I was playing pool basketball with my kids I made $5,000.” Great. But what makes it passive? The 100+ hours you logged before vacation to get the product sales page setup – without compensation? Now, earning $50 an hour.

No Business Runs Itself

They’re restaurants, shops, gas stations, landscaping companies, and roofers. Their owners are running around every day searching for more work, collecting overdue payments, negotiating better prices, and struggling to find good people to employ and retain.There’s nothing passive about any “passive” business. Investors who earn “passive” money from interest and dividends must stay on top of their investments, lest they suffer losses. Authors, playwrights, and actors who earn royalties must ensure that their art is still relevant and that they continue to produce new works in order to keep their prior works in the public eye. Property owners collecting “passive” rents must worry about repairs, maintenance, regulations, and other competing properties that could take away tenants or turn their income-producing asset into a liability. All of this takes work. None of it is as passive as it seems.

Everyone clamors after passive income. The thought of having money flow into your account, day and night with no effort, is intoxicating. Thousands of bestsellers have been written about it, but don’t be fooled, it is also very hard to do properly or quickly. In one way or another, most of us trade our time for money. Time is finite, therefore the income that you can earn from it will also be finite.

Stock Investing

Whew! This is hard for me to say but most traders/investors na “at loss” ngayon have this mentality na stock market investing/trading is a source of passive income. You just buy a stock, leave your money there and after few years you would be rich. That is so wrong! Stock investing/trading requires a lot of effort. You need to research. You need to monitor your stocks. When i say these things madalas akong sinasabihan ”Eh bakit si Warren Buffet naglagay lang ng pera niya at naghingtay (buy and hold) tapos gamit niya wonders of compounding ngayon bilyunaryo na siya” First of all Warren Buffet don’t invest in PSE. He does not like emerging markets as a whole. Look at the top 30 stocks sa PSE at ang company behind them. May isa ba sa 30 na yan na masasabi mo na globally competitive or may malaking market share globally to have that good room to growth? NONE! Secondly, Warren Buffet did not just buy and hold stocks. He did not just buy a stock and held it. He had insurance float to help him with capital and he gobbled up significant shares on stocks for him to have certain controls. I will one day debunked all these misconception about Warren Buffet. I’m a fan of Warren Buffet. He is like my version of a hero. When people attend eminars about stock investing for the first time they are being told that stock investing requires close to zero effort. The moment they started stock investing themselves they will for sure find out na that was a lie. Sa dami ng losses ng mga investors/traders ngayon we often joke nga na instead passive income eh passive expenses ang binibigay n portfolio nila.

There Are Only Two Kinds Of People Who Talk About Passive Income.

  1. The people who don’t have a clue what they’re talking about.
  2. The people trying to sell you something.

Passive Income is a lie. Its an illusion.

It pains me to see my fellow Filipino believing in this lie kasi I truly believe na matatalino ang Pinoy but marami lang ignorant or misinformed. What’s worse is hindi ito ang biggest na lie na pinapaniwala ang mga Filipino. It’s Financial Freedom.

Financial freedom is also an illusion. It’s a concept that many so-called experts want you to believe in so that you buy their product or system that promises to help you create passive income. Remember, just because you have a passive income stream today doesn’t mean you will have it tomorrow. Your “financial freedom” could disappear quickly. Instead of financial freedom dapat financial confidence ang tinuturo. Financial confidence means knowing you have the skills and the ability to make money anywhere, anytime, regardless of market conditions. You’re not depending on any external circumstance or vehicle to generate income. Financial confidence is true freedom. Once you have it, nobody can take it away from you. I will dig deeper on the illusion of financial freedom soon sa next blog.

Solution

I can’t just burst your passive income bubble and not offer a solution. Here are some things you could do to prepare you sa future/retirement.

Read the article here.

If you want to learn more about stock trading join our Facebook Group called Trader’s Lounge

Our advocacy is sharing ideas, experiences and knowledge to traders for FREE. We offer free Technical Analysis, Fundamental Analysis and Market Psychology learning materials for free. 

We also have weekly lessons over there. We created different trading strategies like MAMA which made a lot of traders profitable. Other trading strategies include FISHBALL, PAPA, CALMA and more. We want to offer OFW’s, Employees and all Filipino people a chance to learn without paying a cent. 

We also have a Youtube Channel wherein I myself discuss strategies and trading related topics. 

Come join us. Let us push free learning. 

One Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: