The Truth About Creating A Passive Income Online

Creating a passive income online is something that you probably have heard of. Many business opportunities use the idea of “creating a passive income online” to sell you their systems. It works because I’m using this trick too. But does passive income really exists?

In this article, my goal is to share with you some essential truth about creating a passive income online. I know most of you are more keen to learn how to create a passive income online. I’ll talk about it in future. But before I do that, it is important for me to cover some grounds and get your mindset right.

Passive Income Doesn’t Exist!

First of all, I need to get this straight – passive income doesn’t exists, at least not according to what most newbies define as passive income.

Most people define passive income as “making money without having to do anything”. If you are one of them, you will be very disappointed when you realize that this is not true.

Do you realize that whenever you get into an opportunity that ‘claims’ to give you a passive income, you end up being overwhelmed with lots of sh*t and often have to work like a dog? That’s when most people give up.

Truth is, there is no such thing as making money without having to do anything. If such opportunity exists, it’s most likely a scam (unless you’re talking about putting your money in the fixed deposit).

So what is a passive income then?

Here is my definition of a passive income – “A passive income is an income system that does not trade time for money.”

If you go with my definition, you are less likely to be disappointed and more likely to succeed because you’re prepared to work hard to create such a system.

Once you get the definition right, all you have to do is spend most of your time creating different streams of passive income and spend less time making money.

“Huh, what are you talking about, Kenneth?”

If you understand what I am talking about, good for you. If you don’t, let me explain.

Most people spend time to make money. One obvious example is working for a monthly salary. Some other less obvious examples include the following activities:

– Staring at the computer screen to trade the stock market or forex.

– Selling products in Ebay (unless you have plans to turn it into a system).

– Posting ads to sell Clickbank products (unless you have plans to turn it into a system).

– Providing freelance services such as graphic design, article writing etc (I hope my freelancers are not reading this!)

If you are pressured for money, yes, go find a job and do some part-time freelance jobs. But if you want to be rich, spend most of your time creating different streams of passive income.

You need to understand that making money and creating a passive income are two different things.

Creating a passive income may not make you money, although the ultimate goal is to make lots of money passively. When creating a passive income, you are creating a system that does not trade time for money and in the process of creating this system, you may spend more than you earn.

Many people can’t get pass the idea of losing money before making money. That’s why most people fail to create their first passive income online. On the contrary, those who are ‘lucky’ enough to create their first stream of passive income online will continue to create the second stream and third stream because they’re used to the idea of losing some money before getting it all back, multiplied. Another reason is because with their first passive income established, their risk appetite is higher and they are more willing to lose. The last reason is because they are more experienced now.

If you’ve just started out, go find a job to make money. But don’t spent too much time on it. Take 3-5% of your monthly income and most of your spare time to create a passive income online. Online opportunities cost much lesser than offline opportunities and 3-5% should be enough for you to learn the ropes. How soon you’ll see your first passive income established depends on how fast you learn and how hard you work.

Get your definition of passive income right and spend most of your time creating a passive income online. Once you’ve created your first passive income, go on to create the second, the third and more streams of passive income. This is possible since you don’t trade time for money with these systems. This is the sure way to make a fortune rather than just making a living.

36 thoughts to “The Truth About Creating A Passive Income Online”

  1. Good point Kenneth. Everyone needs to realize that passive
    income does not mean no work. It takes work to set up the
    system. That said, once the system is set up,(work and time),
    the system makes the money,(no work or time). A good example
    of a system to make you passive income…
    Check it out. Set up a system!

  2. Excellent point Kenneth! It is refreshing to see the truth spelled out about making money online.

    People need to realise there is actual work involved.

    I give a free membership to learn how use Craigslist, Safelists and more ways to make money online that actually require work also.

    Get your free membership!

  3. The promise of passive income is a lure to bring in the suckers and it works. What I prefer is LEVERAGED income, where I do have to put in 10 or 15 minutes a day and then I reap the rewards of hundreds of hours of collective effort from team members using the same plan. This only remains stable if they receive a similar reward with your help.

  4. Hi Kenneth,

    Great point about passive income, I totally support your definition.

    In fact the last few years I have spent tons of time and resources to build a complete system and it does require work to put into it to get the most out of it. So I know what you are talking about exactly. I am glad I risked my resources, capital and investment of precious time and energy to build it, now life is much easier and more enjoyable as I am building my assets and knowing what to do.

  5. Hmm. Common sense. One MLM I was in was Avon. I was told that all people that stay in one plan for more than a year and work it, earn money and are successful. I see they same with being persistent in building income streams online. You hit the nail on the head, square.

  6. Hi Kenneth,
    You are ‘Spot On’ about money and passive income not being ‘quite’ the same thing. As far as setting up systems to do the tedious part of the work for you on autopilot, I have a great selection of tools and scripts that do just that over at

    Another great method of building passive income is to use giveaway events and set up an autoresponder with some review emails in it. Give them a freebie and then they get five or ten review emails for products that you are promoting.

    Mark Hultgren
    IM-REI Giveaway

  7. Thanks, Kenneth, I totally agree with you. It’s very true that people have the wrong idea about passive income and thought they need not do anything to make lots of money passively .. They just can’t believe that they need to lose some money creating passive income system before they see money coming in… I like yr post, and have just put it at my blog. :)

  8. The difference between active income and passive income is somewhat like the difference between planting vegetables and planting fruit trees.

    With vegetables, you get to prepare the land, sow, fertilize, water, harvest and sell them within weeks, but you have keep doing it or your income stops. That’s active income.

    With fruit trees, you prepare the land, sow, fertilize, water, but you have to wait 3 years before it starts to bear fruit and you can harvest and sell it.

    What’s the difference then?

    Well, the difference is you need only to do it right once! After the fruit trees bear fruit, you just have do a little maintenance (like watering and adding fertilizer) and you get all the fruits you want! This is passive income.

    Willy Lim
    The Financially Free Advisor
    InterNETwork Marketing in Asia

  9. This is a good read. I especially like your definition of passive income about not trading time for money. That was right on it.

    One of the ways I generate passive income our through my paperback and ebooks and yes there’s work that has to be done. However, using your definition I too am in a position to generate passive income.

    Because I see so many writers, authors and self-publishers who don’t know how to market and promote their book they may want to read BOOK PIMPING

  10. Your post is very informative. And coming to my view, it is very true that people have the wrong idea about passive income and thought they need not do anything to make lots of money passively…

  11. Great post. I see passive income as having fun doing something you love to do and earning great money from it at the same time. When your having fun working and socialising with others and earning great money at the same time it becomes an all round wealthy experience…. Lets face it no one wants to work but we do want enough money for our families whilst trying to have a great time….

    All I have to do now is try and find a way to earn money whilst playing tennis on my wii..

  12. Found leadsleap by checking online job scams. Great info.
    I finally got wise and googled scams on these sites promoting
    excellent profits. Thanks for having site available.

    I have a website, but no scam here, just trying to get going
    on income. Anybody needing any self-defense products?

  13. Conducting a search via Bing, I came across your blog once more. Although your original post was written a few years ago the information is still right on time.

    Initially, I was only using the Blogger Platform, but since originally posting here I’ve moved to build hosted Blogs. It seems that Google likes sites. Additionally, WordPress is more robust with the number of plugins and themes that are readily available for use.

    I mention all this to say that using hosted blogs and sites make it a bit easier to position oneself to earn residual/passive income. “THINK, PLAN, EXECUTE!”™

  14. I really like clickbank as a foundation to earn money with my websites. It is effective if used correctly, although I do plan to try out some amazon affiliate websites and see what they can bring.

    One step at a time I suppose, you have to focus on one thing at a time.


  15. I am a firm believer and advocate of mutiple steams of income. “Robert Allen” In recents times the concept passive income have become the alluring golden cow. Hard work creating this type of system is the success key for passive income.

  16. This is great article! I am also writing article about active and passive income. I may say that this is an interesting post as well. Thanks for the info!

    More power to your site! :)

  17. Very true! I have been a microstocker for 2 years now and it takes a lot of hardwork to earn decent money. Very informative article and great advise for people looking to make money in internet

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