We all know the drill. You log into Instagram, see the girl who travels the world funded by the passive income she earns working 17 seconds a day, and begin to wonder… Am I going about this whole business thing all wrong? Maybe I should create a digital product, course, or e-book. I get it. Making money after only putting in work up front sounds amazing, but there’s more to the story or everyone would be doing it. So, whatcha waiting for? Let’s dig into the truth about passive income.
Passive Income vs Scalable Income
Is passive income truly passive? Or is it just scalable? Well, let’s break this down. Your goal is to put in work up front to create something that can be sold to more people without you having to directly trade your time for money. For many creatives whose entire operation is a 1:1 service, this can feel a lot more passive, but friends, it’s not…
The truth about passive income? It’s not passive. It’s scalable. So yes, you can put in that work upfront and sell it to a limitless number of clients without theoretically adding any additional work per sale. And there’s value in that – don’t get me wrong, but in order to scale that income, you’re adding on an additional arm to your business. An arm that will require customer service, marketing, and all the things your 1:1 service currently requires.
Now can you get this to a point where a team does a lot of these tasks for you? Absolutely, but given the average conversion of a digital product to be 3-5% of the total audience size, it may take a hot minute before you reach that level. So, let’s talk about why you’re even considering this type of revenue to begin with.
There Are Better Ways to Deal With Burnout
Often times, business owners come to me on the verge of giving up. Their business is doing well, but because they lack systems & processes, they’re exhausted. They think that creating a digital product will be their saving grace, but they don’t realize how much effort actually goes into getting that off of the ground.
For some business owners who are genuinely thriving & are just looking for a way to help more people and work less while doing it, scalable income may make sense. But then there’s the burned out, broken down, tired souls… Those business owners already have so much on their plate. Adding an entire new aspect to their business isn’t going to be the cure.
Instead, those business owners should focus on setting up systems, looking at what’s “not working for them,” and “niching down” (according to Matt of Harmony Wealth). The problem isn’t that they don’t love what they do, but that they’re not doing it as efficiently as they could be. If they can fix that, the need for “passive” income, and all the complexities that come with it, kind of dissipate.
How To Leverage Your Business to Build Wealth
If scalable income isn’t the right answer for you and your bandwidth right now, what is? Matt lends his unique perspective on how you can build your wealth without spreading yourself too thin using the power of compound interest. This is something he helps his clients with and while he still won’t call it “passive income,” it’s as low effort as it gets.
Come Back to Your Why
“First, ask yourself why you want to make a change.” This is the advice Matt gives us… In a world of shiny object syndrome and trying to keep up with everyone and their mother on Instagram, it’s important to press pause. Ask yourself what’s driving your need for a change? Is it true desire & passion to reach more people? Or are you just exhausted and looking for a lifeline?
Scalable income can be a great thing – um, hi… hello. I use it! – but only if it’s born from the right place & makes sense for your goals / bandwidth. If you are going to build that part of your business, start slow. Invest small portions of time and money to make sure your audience actually wants what you’re selling before you build the whole thing. No use in building an entire funnel if you don’t even know if people wanna dive down it!
The Truth About Passive Income
The truth is… passive income isn’t actually passive at all. While it, if leveraged properly, can absolutely help your business grow, it needs to be done in a strategic, aligned way. To listen to our full conversation and get the links mentioned throughout, head on over to your favorite podcast player!