Residual Income: Why ‘Passive Income’ Is a Big, Fat LIE…

Ok, residual income is a reality, and ‘passive income’ is a lie. Yup, I said it. All the online business marketers fervently promoting passive and residual income streams, touting that you can make $10,000 / month online with tiny involvement, are drastically minimizing the process.

Get it correct; 10, 20, 50, 100k+ a month are not unrealistic; as a matter of fact people are making millions per month as we speak. This article will teach you how to be creating residual income in the correct ways.

You can get tons of online business ideas with the right guidelines in my S.P.E.E.D. acronym HERE, so that residual income is actually attainable.

Where the myth lies is in the regurgitation that creating an income can be “passive”. There is no such thing as something for nothing and the law of cause and effect always reigns supreme.

No matter what you do, you cannot avoid the paradigm of cause and effect. Some will get discouraged at this fact, but those willing to run marathons for success only get excited.

By correctly leveraging the math of compound interest and the laws of cause and effect, you will become willing and conscious to the effort that must be put forth for you to achieve the “passive” side of business.

Residual Income is a Reality. Pure ‘Passive Income’ Doesn’t Exist:

I said it; passive income isn’t actually real or attainable in the traditional sense.

Here’s what is real:

  • 90-hour-work-week income
  • Grind-late-wake-up-early income
  • Obsessed-with-your-craft-and-improving-income
  • Focused, directed action towards the attainment of goals income
  • Can’t fall asleep, too excited, planning and strategizing income
  • Networking with winners above you income
  • Studying something every day and applying it income

These are the pre-requisites to making something anywhere near passive. To make one thing successful, it will take so much focused dedication.

Like I mentioned in my article on market sophistication, People with scammy-sounding copy headlines like: “Make 10k/mo. In Your Pajamas” and “The ONE Secret Way to Earn an Extra 20k/mo. From Your Side Business” sound scammy for a reason.

Many times these programs come from “gurus” that make more money online from teaching you how to make money online than they do in any real business…

It’s imperative to take a step back and look at it from the marketer’s point of view.

Understand the first cognitive bias of the mind: the reward/punishment bias. This states that we are always looking out for our best interests and avoiding pain and punishment.

Do you think that these marketers are looking to help you make that money, or do they target the demographic of lazy, low-income people that want a quick fix?

Again, these amounts of money per month, and far more, are absolutely possible… I know people doing these bigger numbers, and they’ve been killing it. That part is not the bone I have to pick with passive income…

However, the slogans and headlines are suggesting that it will be easy and fast, and you can set up shop to make five-figures a month passively, very soon.


To get to the point of passivity in any business, you must lay the foundation.

Laying the Groundwork For Passivity

Everyone wants their ideal lives, but not everyone achieves them.

Almost everyone wants to know how to make passive income, but very few know how to achieve this. It’s because it only comes after a ton of hard work, patience, and learning your craft. You learn a bit every day, and contribute to that end goal.

Only after these actions compound are you in a position to make passive income. It becomes passive if you have the right prerequisites for a passive sales machine, and you have already done (and continue doing) what it takes to build that machine.

Even if it takes years to build your machine, you’re still light years ahead of those running on the hamster wheel for money.

By setting up a machine that pays you, you are preparing your future step by step, and gaining an advantage over the ones that will remain working until they die.

Some people still don’t have enough money to retire after 50+ years of work. That is sad. This is because they have never built a machine, expanded it with employees, and stepped back to manage it.

The people who do have this kind of money and retire before 30, have built their system, hired employees to run and manage it, and now take a third person perspective while they grow and invest in it.

“They don’t work in their business; they work on it.” – Robert Kiyosaki

By taking this voluntary and somewhat detached position, they don’t need to always be at the office or shoulder the grunt work.

Someone will post on social media for them. Fulfill orders. Hire out. Acquire new leads. Design new products and ad campaigns. Create product packaging, images, website code, and so on…

When you’re the top creator, your systems are set up to scale and grow. You buy others’ energy; you buy others’ time.

Spending five or even 10-15 years building your machine for scale and growth is still a worthwhile endeavor, because there will come a point that you will be free from a lot of what you used to need to constantly monitor.

Passive Income Growth & Maintenance

Streams of passive income are attainable in a sense, only after you’ve built the system. Notice how I’m drilling this systematic approach into your skull? Good, just wanted to make sure you were paying attention.

Streams of income that don’t require your direct attention can not long thrive and grow, because they’re only passive in the sense that you don’t need to physically be there to keep making money.

If you’re striving towards daily growth, there will always, always be something you can do to further your efforts. If you decide to slack off a bit, you’re losing potential money to opportunity cost.

By knowing there is much more to achieve and acquire, we will not long wish to stagnate and keep earning the same amount without that next-level growth. There’s a difference between taking time to celebrate your recent accomplishment, and slacking off.

It is here in this delicate balance of GROWTH and MAINTENANCE that we are the happiest.

We’re not always happy when we actually reach our goals. When we strive for them with all we’ve got, we are.

So by this definition, we can only have hands-off, passive income for a short period of time that dictates how much we earn for how long. The market is always changing, there are always new competitors entering the space, inflation is steadily creeping upwards, and the production of paper money only increases.

This drives down your currency’s value over time, no matter what country you reside in. Not to mention nothing is secure; countries leave the alliances they formerly held, and other history happens before our eyes daily.

This means your money streams need to be evolving constantly, not passive or stagnant.

Take your financial destiny into your own hands and don’t leave anything to chance, because like you, others are primarily out for their self-interest. Do not allow someone to destroy in one fell swoop what you’ve worked so hard to build.

Let’s take a look at what passive actually means:

“Passive – not participating in something actively; inactive. Not involving visible reaction or active participation.”

For something to be truly passive means it must be stagnant. There’s nothing new being created, and it just coasts.

You don’t want your income to be passive. You want it to grow. Simple.

So instead of having the goal of passive income, being able to relax all the time and not having to work, consider setting up systems that will pay you 24/7 and allow you the freedom to create what you actually want.

Detached, uninvolved income has never been my goal.

Income without my constant effort, freedom to create what I want, enabling me to enrich others’ and my own experience here, has. I love working, but it must be on something I have passion for, am excited about and believe in.

The thing is, we must figure out ways to still be making money, while we pursue how to flip that into more money. An income stream is only passive so long as we don’t want to grow it to the next level. That requires allocating resources and capital in the necessary directions.

Worse than that, this sort of stagnant, “passive” income is not steady; rather, it’s decreasing in value. Creating residual income is all about making something that can sustain you long term, and duplicating the process. Nothing about this process is passive.

For the reasons mentioned above such as growth potential, keeping your finger on the pulse, and inflation, your income is declining every second you’re not working on boosting it. The opportunity cost you pay by relaxing will not be felt immediately, but when it compounds, you will. In the future, when you look back and see everything you could have done, you’ll feel it.

Don’t be fooled.

Understand the difference between assets and liabilities. This goes for time and money.

Set up the correct structure so you can live whatever life you want and always create the next thing, or the next addition to your current thing.

Build valuable products for people, solve market needs and continue to better your income structure in efficient ways.

Creating Residual Income For Real [Long-Term] – Controlling Your Own Company

The fastest, most secure, and most direct route to wealth is being an investor in the sport of business.

Whether it’s a holding company, a brand of physical products, a software company, an investment firm, or an SEO-consultancy, if you built it your own way and are at the top, you will remain able to move, grow, and succeed.

I am not talking about being self-employed; I mean investing in the growth and success of your company, its people, and the brand message you portray. Something worth learning is the cash flow quadrant, which is a bit out of the scope of this article.

You will never understand how to create residual income by being self-employed, or an employee. These foundations are not set up for this.

See Robert Kiyosaki’s cash flow quadrant below:

creating residual income

People who have jobs never get extremely wealthy or make passive sources of income. Self-employed entrepreneurs are often so busy working in their own business that they don’t have time to scale or step back and let it grow without their constant involvement.

Creating residual income streams requires you to step back, evaluate, and delegate.

That said; the route to passive income is an investment of time, energy, and money into paths that allow you to earn money while you sleep, play with your kids, or work out.

When you provide value to people, charge them for it, have an automated system to collect it, and make the business work for you 24/7, you’ve created what most refer to as passive income.

Just know it’ll be a hell of a road there.

Is it easy? No.

Is it worth it? Of course.

If you want to get to where you do exactly what you want for a living, lead the ideal life that you always wanted, and don’t need to work another day in your life, the way to do it is to hire yourself out of your business.

Get really good at training your mindset to be a heat-seeking missile, and pick up the business skills that you need to learn like marketing, copywriting, sales funnels, advertisements, content, product development, and much more.

When you hit that passive level of comfort, don’t think it means smoking cigars on Persian rugs in plush offices while your employees toil away, but it could.

It just means that there’s no reason for you to be doing everything as a one-man show when your company requires growth. At a point, it becomes impossible to do everything alone anyway, and it will stunt your growth.

For now, I’m operating as a one-man show, and I outsource many things to others that I don’t want to spend time on. This allows me to focus on what I want to build long term, while making money to fund and scale it.

Long term, it will require many more helping hands and employees to get the level of content, ads, and marketing out to the millions.

But, if you looked at my life, you could say I make passive income. I just don’t want to spout that everywhere because I know how much it takes to create systems that bring money in all day and all night.

For instance I just checked, and I made some money while I was typing this article for you.

I’ve uniquely designed my days so I can wake up, go here in the morning for grounding:

creating residual income

…and balance my negative ions for health, come back, drink some coffee and get writing, or growing my E-commerce ventures.

My day is ideal on this path because I designed it exactly how I wanted, by creating it in my head first, and executing it.

I decided how I wanted to live, put the pieces together, learned every day, and the results have paid off. This is also just the beginning. By always having a student’s mindset and applying new insights, I have been able to progress constantly.

This allows me to be an owner and investor of my own business, leverage other people’s time, not constantly be in work mode, and build what I choose.

It’s possible for you as well, should you decide to build your machine!

This Is Not Taught In School – You Must Learn It On Your Own

When I say on your own, this can be from mentors or your own reading and investing in programs, books, and courses.

For a fact, this type of learning about business models, filling specific and relevant market needs, marketing them, and becoming the owner of a business is not taught in school. In fact, it’s one of the reasons why I dropped out of college in the first place!

For some reason, society tells you to go to school so you can get a job. Why? Why does no one tell you to start a business that earns passive income, so you can create jobs?

Successful businesspeople create life according to how they want it, help people support their family through paychecks, and make money for their own at the same time.

No one will simply come along and teach you this stuff and help you apply it, which is why you’ve got to be self-reliant for your results, and take responsibility.

It will be hard and will challenge you, but on the other end you develop into a much more resilient and capable human being. A richer, more resilient and capable being, I might add.

Take the plunge and the necessary steps to succeed, and you can have whatever you want.

Be careful because all “passive income” paths do not lead to real wealth.

Choose one that can set you up with income for life and has massive potential to grow, scale, and thrive under your control, without the need for you to constantly run along on the hamster wheel.

Recognizing you need passive income can be a start on the path to attaining it.

But not knowing how to start or what to focus on will kill the dreams of 99% of people wishing and hoping.

One of the hands-down, absolute most important skills you need, (if you want to develop passive income online) is Direct Response Marketing & Copywriting. Learning from people like Gary Halbert, Dan Kennedy, and David Ogilvy.

(HINT: This article on market sophistication is a great start)

This is considered salesmanship-in-print, and when you get good at it, you can sell products on autopilot, with your copy doing the selling for you, while you sleep.

You can set up systems that bring in relevant leads on autopilot. You can use copy again to automatically convert those leads to products they want.

Leveraging e-mail copy, that follows up automatically (bringing YOU residual income) will also be a cinch, when you’re good at writing.

It’s somewhat like having a salesman in front of your leads, 24 hours a day, round the weeks and months… to sell the products that will put money in your pocket every day.

Learn exactly how to earn passive income with stellar copy in my new Ultimate Copywriting Guide to Selling Anything Online [Vol. I]

Click below to learn more.
Ultimate Copywriting Guide to Selling Anything Online