Mark over at 45N5 has suggested that passive income is a myth, and is not really something tangible that we can work towards. (great website by the way)
I disagree. I think we differ on a technicality here, and are basically mincing words up a bit. Let’s have a look:
Mark takes the stance that most people pushing passive income as a lifestyle are actually working their tails off, either creating new businesses or new content on websites or managing online campaigns or whatever. He argues that even if you start a business and then hire someone to run the business, you still have to “manage the manager.” Makes sense.
There is also the idea that if you are earning passive income from investments and interest or dividends, that is not truly passive because the initial money for the investments had to be earned in the first place (presumably through work). So even accumulated interest has it’s roots in work and labor.
Does that mean we should not pursue passive income?
You can do what you want, I’m going to keep chasing this goal! In fact, I feel that I’m already there, as I have investments with Vanguard online that grow over time and also websites that continue to generate residual income for me (though admittedly, I still work on the websites).
I agree with Mark’s thinking in that no income is truly passive, you always have to do some initial work to set up a system or provide some level of value so that you can eventually profit from it. But I still believe there is value in shifting our mindset from “hours of labor for a straight wage” towards “creating something of value that can pay over and over again with time.” There are plenty of money making ideas out there that can bring in continuous income once you have a system set up and in place.
For example, a freelance writer that cranks out articles for 10 bucks apiece or whatever, they could possibly be putting that same creative energy into a website of their own to eventually build up a potential asset.
What do you think? Is it worth changing our mindset and pursuing passive income? Or should we simply find what we love to do and take what money we can get for our efforts?