Is Passive Income a Myth?

We keep hearing about and seeing ads for this thing called "passive income". Sounds
good, right? But there is a big misunderstanding about passive income, what it is, and
how to get it.

The first thing you want to do is learn to distinguish between ​passive income​ and
leveraged income.

Passive income is where you do not do a single thing and money just keeps coming in.
The only real examples I can think of would be things like real estate and the stock
market. Even with those, you are required to make some sort of initial investment in
order to leverage the properties and the stocks so that money has to come from
somewhere. Unless you are a trust fund baby, you are going to have to earn it. Once
the investment is made, the income will be passive. It is not without risk, but it won't
require day to day management. Most of us would like to have this sort of income
coming in.
What is leveraged income? Leveraged income, to my way of thinking, is when you are
able to generate income on an ongoing basis from work done previously.

Examples might include things like writing a book. If the book sells well, you write it
once and sales come in. You get royalties. Same thing for writing a hit song. You write
the song once. If the right people pick it up, the artist records it, and the song becomes
a hit, you will be making money for a good while.

Another example of leveraged income is what we do in network marketing.

We put in the work to do two things:

1) Get customers

2) Build a team of customer gatherers.

The key is that we DO the work. ​Then, as customers order, we continue to get paid​.
This is where the leverage comes in. The more customers we get, the more we can
earn. The team building creates another form of leveraged income. As our team gathers
customers, and those customers order, we continue to receive commissions over the
lifetime of those orders.

This income is not passive. We need to actively collect customers and build a team in
order to tap into this income. This income is leveraged because we are able to get paid
over and over again for work we did previously. This income is leveraged because we
are able to get paid on the work our team members do as they build their business.

I have been participating in leveraged income for over 20 years. Initially, my income was
based on financial services I sold for a company in Houston. I would work to close the
deal and I would then receive commissions for as long as that customer was active with
the company. In some cases, ​I received ongoing monthly commissions for
years after the initial deal was done​.

These days, I apply that same concept in the network marketing world. I provide
services that network marketers use to advertise, build their lists, follow up with
prospects, and close more sales.

I show travelers how to save money on hotels, rental cars, resorts, etc... and I get paid
every time they pay less.

In each of these cases, I'm actually doing the work to get the customers, so I don't
consider this to be passive income. But the fact that I can leverage internet capabilities
and team efforts to be paid on an ongoing basis is why I refer to this as leveraged
income.