Passive Income Myths Vs Reality

Tune in or read the blog version below!

Location Freedom and Building a Life Abroad in Brazil

Hello, my loves and welcome back to another episode of the Wanderlover Podcast. We just signed a one-year lease here in Florianópolis, Brazil. It feels surreal living in this house right on the beach, and I am so thankful for my online business to be able to give us the location freedom to get another citizenship and choose where in the world to do so.

We love Brazil because not only is there amazing surf, amazing food, amazing people, there’s also great healthcare, doctors, and medicine. And also it’s a great opportunity for Leven to learn another language. And being an international family, having a global mindset is so important.

Plus, I love how the seasons are opposite to New York and England, so we can spend half the year in the Northern Hemisphere and the other half in the South for an endless summer. People have asked what I envision for the future for my family, and I honestly could do an entire episode about this, but right now, I honestly don’t see us staying in one place for the whole year.

Maybe six months and six months, or 4, 4, 4. We’ll see. We rarely plan months out, and this is the first time I’ve signed a one-year lease since 2015, so it’s a big move for us, but it’s a step outside our comfort zone and it’s going to be so good. Since Leven was born in February, we have traveled from Rio to São Paulo, Florianópolis, New York, London, Cornwall, Switzerland, France, back to Rio, and now Florianópolis again.

As you can imagine, I am just craving the stability and having a community of like-minded entrepreneurs, new mothers, and surf-loving families around us. Through the past six months of maternity leave, I have been living off passive income and getting to spend my days however I want to with my little family.

I often forget what day of the week or month it is, which is possibly the best thing because I remember the days where I would dread Mondays and spend my entire week just waiting for the weekend. And when I look back to that chapter of my life, it’s never something that I want to experience ever again. I never want to be dreading any day of the week. I don’t want to be looking forward to just two out of seven days, and I just love being lost in living that I forget what day or month it is. I truly think that is the whole point.

The Truth About Passive Income

So today we are diving into one of my favorite topics on this show, passive income. It’s a buzzword that gets talked about in a lot of the online business and travel spaces. I remember when I first learned about it, though, I knew I was going to achieve it – making money while you sleep, waking up to sales notifications, money deposited into your bank account daily without you having to trade your time for that money.

I’ve built my business to generate passive income consistently, which has been a godsend during maternity leave (read the full blog here on how i prepared for maternity leave as an online business owner), and I’ve helped so many clients achieve the same. But there are so many myths out there that make people think either it is too good to be true or that it’s going to be instant and effortless, or that it’s not possible for them.

Today, I’m going to share the most common myths I hear about passive income from my community and from the online space and the reality behind each one. So if you’ve ever wondered what it really takes to build passive income streams, then this episode is for you, and I truly hope that by the end of this episode, you make one step towards achieving your passive income dreams.

Myth 1: Passive Income Means No Work at All

The first myth I hear is that passive income means no work at all, and that you literally do not have to lift a finger. I really wish it were true, but that is majority of times not the case. Maybe if you are, let’s say, a trust fund baby, and you came from wealth and you just live off of dividends – fine, that’s another case. But if you’re like me and you didn’t come from money, then the truth is that every passive income stream requires some type of work, whether it’s upfront work, like creating a digital course or writing an ebook, or ongoing work like maintaining a rental property or updating your marketing systems.

So I hate to break it to you, passive income doesn’t mean no work at all. The key difference though is that you’re not trading your time for money in the same way as a traditional job or a traditional salary. Instead, you are basically front-loading the work so you can reap the benefits over and over again in the future, think of it as creating a system or a machine to be able to generate passive income.

I have recorded an entire episode around this called the Pyramid Parable that I think illustrates this concept so well. It’s episode 161 if you want to go back and check that out. But if you think about it as planting the seeds, one day you get to reap the reward.

Myth 2: You Need a Huge Amount of Money to Start

Another common misconception is that you need a huge amount of money to start—you need thousands or even millions of dollars just to get started. And that is super sad to me when I hear, because some people don’t even give it a shot. They think that they need to come from money or have a lot of money to begin with.

And yes, although some avenues like real estate or dividend investing require capital, there are so many online business models that give you passive income that cost almost nothing to start. For example, affiliate marketing, blogging, YouTube, digital downloads, print-on-demand products. These can all be started with minimal financial investment.

What matters more is your creativity, your consistency, and your willingness to learn. If you don’t have the financial capital, you can invest your time and leverage your creativity and experience. But basically, there are so many ways for you to learn how to make it possible for yourself without needing a huge amount of money to start.

And more often than not, when I work with my clients, it ends up turning out that when they get serious about creating these systems for passive income, they have the money. They just need to cut back on some other luxuries in their life or reassess what they are spending their money on, because it’s so easy for us to just say, “Oh, I don’t have the money,” when in reality it is, “I am not putting my value on creating the system right this instant.”

But when you do make it a priority, you see everything else that you can cut back on momentarily to then give you the freedom in the future. And what I want you to firmly believe is that it is possible for you. You do not need to come from a huge amount of money. You do not need to come from a huge wealth of experience. You are able to learn.

Myth 3: Passive Income Is Instant

The next myth is probably one of the biggest myths I see online, especially with so many clickbait titles like I made $10,000 overnight while doing nothing. The truth is that passive income takes time because again, you need to be building and creating that system in the first place.

Most likely, you’re not seeing behind the scenes of the thousands of hours it took to build the system, or how many email list subscribers they have, or how much capital they invested, or how many team members they hired to leverage all of their time and create the system faster. You have to put in the effort to set everything up, to grow your audience, and to market your products or services.

For many entrepreneurs, it takes months or even years before their income becomes consistent. So although you can have a quick win here and there within the next month, building up consistent passive income will take time. Once it is running, however, that’s when you really get to experience the magic of waking up to sales notifications consistently while you are traveling or spending time with your family.

Or in my case, when I’m out at a surf and I come home and I wake up to hundreds of dollars in sales. I’ve seen it over and over again though, the feeling is honestly addicting. Like when you make your first sale that isn’t tied to your time, it’s fully automated and digital. It feels like an adrenaline rush, and you prove to yourself it’s possible.

So most of the time, although it’s not consistent in the beginning, you really gain that motivation to make it consistent and you know that you are able to, because if you can sell one, you can sell a hundred, and you can sell a thousand. Like I remember when I was working in corporate and I got my first sale online. Although it was a physical product, I was still like, “Oh my God, I can do this,” and the rest is history.

That’s when I started experimenting with so many online business models and I stuck with the ones that were literally not tied to any location, not tied to my time, and that is what I teach inside all of my programs. So if I can do it coming from corporate, you can too.

Myth 4: Passive Income Is Completely Hands Off

Myth number four is that passive income is completely hands off forever—that once you set it up, you never have to think about it again. And while it’s true that it requires way less daily effort and almost no effort sometimes day to day, you still need to maintain your systems and there is an upkeep that requires you to be in the business.

Algorithms change, markets shift, and sometimes your audience evolves. So whether it’s updating content or refreshing your offers or just adjusting your strategy, there’s always going to be some level of upkeep if you want your income streams to keep performing.

And this goes not only for online business, but even with investing, interest rates and economies are constantly changing. The only constant is change. So you can’t rely on set it and forget it forever. Even my real estate friends who have passive income from their rentals (checkout my interview with digital nomad & real estate investor Matt Bowles here) , it’s never completely hands off. They need to manage it. They need to make sure everything is up to date, and if you do set it and forget it forever, over time it tends to deteriorate. So it’s always in the back of your mind in some way, shape, or form.

Myth 5: Only Tech Geniuses Can Create Passive Income

Next, another myth which isn’t as common, but I’ve definitely heard it once or twice in the past few months. is that only tech geniuses can do it. And this is such a limiting belief from people who think that they don’t have the skills.

The reality is that with all the tools and platforms available today, anyone can build passive income streams. You do not need to code an app or invent the next Facebook. If you can write, design, share your expertise, or even just be consistent on social media (or learn how to be consistent on social media), you can turn those skills into scalable products, affiliate partnerships, or content earning ad revenue. You can read about all the income streams I have in The Wanderlover here.

You can outsource things you don’t know or learn the skills yourself. You can constantly be learning. So if you think that you need to be in a certain industry or have some kind of tech background, that is simply not it. I’ve helped clients upwards of their fifties and sixties build up these systems themselves. So if they can do it, not growing up with all the technology, you can as well.

And I think that is the main point I want to get across: do not let any limiting beliefs hold you back. Do not tune into these myths because a lot of times they’re not even true.

Myth 6: Passive Income Automatically Equals Financial Freedom

And the last myth is that passive income automatically equates to financial freedom—that this is the North Star. Once you have passive income, you’ve automatically made it and you’re financially free. That is not the case.

The truth is passive income is just one piece of the puzzle that buys you your time freedom, location freedom, and financial freedom. But you also need to manage your money wisely and diversify your income streams and think long term. I come from a finance background, I studied it in college, and I know that if you don’t focus on managing your money wisely, you risk creating another job for yourself, and it’s just structured differently.

I personally know a few people who are making tens of thousands a month, but then they spent it all, and then when the online ecosystem shifted or the economy shifted, they lost it all and they were scrambling for the next best thing. You never want to end up in that position. So be wise with your money once it is yours.

Financial freedom, whether you are working for someone else or whether you have your own businesses, comes from pairing passive income with intentional planning, savings, and investment strategies. Even if you make a lot of money at your job, if you don’t manage it right, you’re just living paycheck to paycheck. Or if you’re trying to keep up with the Joneses and you’re just purchasing everything and spending everything you make, you’re not going to be financially free.

So this is the same exact thing with passive income. You can be making so much, but if you’re not savvy with your money, it’s not going to give you that freedom. You’re constantly going to be in that hamster wheel of trying to make more and spending more than you earn.

The Reality of Passive Income and Transformation

So the big takeaway here is that passive income isn’t a magic button. The myth is that it’s easy, instant, and hands off. And the reality honestly is that it takes upfront effort, it takes smart systems, and a long-term mindset. If you’re looking for a quick win or a quick system, you’re going to be disappointed or give up too early.

So I just want to break it to you that it is completely possible for you, but it just might take a bit more time and effort than you think, and that is okay because when you do it right, it has the power to transform your lifestyle. It’s what’s allowed me to travel the world, work from anywhere, spend time with my family while still growing my income, and be fully present with my baby. I promise that you can do it too.

And if you would like to set up a discovery call to just see where you’re at, how we can make this a reality for you, feel free to reach out to me at Wanderlover on Instagram.

Thank you so much for tuning in today. If you love this episode, please take a screenshot, share it to your Instagram stories, and tag me @thewanderlover, and I will see you guys in the next episode. Have an amazing week, my loves.

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