Quote:
Originally Posted by Acting Like Godot  It is not passive income, not any more than running a newspaper is passive income.
Your blog will not pay you if you do not constantly produce new content. For example, if Steve Pavlina quit blogging today, all his readers will eventually go away. His rankings and Internet visibility via Alexa, Technorati, Google etc would slip.
Quite quickly his advertising revenue from blogging would dwindle to zero.
Passive income really means that something like you have a million dollars and place it on a rolling fixed deposit. You earn, say, 2% per annum and so you get $20,000 per year doing nothing.
Another example of passive income is owning an extra property and you rent it out to a tenant. The guy rents it for 5 years and pays you $3,000 per month. That's passive income.
Another example of passive income is that you write a book that continues to sell well over many years, going into reprints etc, getting translated into different languages, selling into different countries. After the initial labour (of writing the book), the book brings in passive income.
Theoretically it may be possible for a blog to achieve the same - eg you write 50 articles and then you quit posting - but a large number of readers still visit for the next 3 years and contribute to your advertising revenue. That would be passive income. However, I haven't seen any blog like that yet. |
I don't want to hijack the thread here, but I think this discussion is relevant to the topic at hand so I'll respond to this.
Like I said before, setting up a blog and getting advertising revenue from it is absolutely a passive income stream. What you have been suggesting in this thread does not exist - there is no system that can be set up to provide income that will continue indefinitely and never need maintenance. Saying that writing a blog is not passive income (since it requires you to continue to produce content) is incorrect and shows a lack of understanding about passive income. Let's look at some of your examples:
Writing a book - You get paid once when you write it and then get residuals from the sales. The residuals are passive income. However, they will trail off as fewer and fewer people buy your book. Doing some maintenance work (updating your book, rewriting sections, editing it to stay current) will keep the income stream flowing.
Owning rental property - People pay you to live/work in properties that you own. This is passive income. But if you do not perform maintenance work on your properties, you will soon have no tenants and your income stream will die.
Investing - You invest a large sum of money and collect part of the interest to live off of. This is passive income. However, if you do not review your investment strategy, buy and sell as needed, and keep an eye on how your investments are doing, it is very possible to lose everything you have invested.
All of the maintenance work mentioned can of course be done by a manager - editor/ghost writer, property manager, stockbroker, etc. - but the point is that in all of these systems (and in any system you can think of) work still needs to be done to maintain the system.
The definition of passive income is simply income that you receive independent of the time that you spend working on the system. It does not mean that you never have to work on the system ever again. Earned income, in contrast, is completely dependent on the time you spend to earn it. If you work in a typical job and earn wages or a salary, there will never come a point at which maintenance work is sufficient. You can't cut your hours in half and expect to continue to receive full pay.
On the other hand, take Steve's blog. He is at a point where he could perform maintenance work only and keep his income streams flowing. He could easily spend 30 minutes each Monday and write one article each week for the next 20 years and probably never see a significant dip in revenues. That is passive income.