I love my fellow personal finance bloggers and I think many have some really brilliant ideas, but the one that has annoyed me most recently is the idea that passive income is the ultimate goal of the personal finance community.
For some people, it’s a great goal. If you have enough money, you can invest and set your finances on auto-pilot and never work again. The only problem is that you must be very wealthy to earn a lot from passive investing, so most bloggers aren’t talking about this route.
Rather, they’re talking about setting up small online businesses that bring in small amounts of money each month. If they can set up 10 websites to earn $100 each, that’s $1,000/month in extra income. Sounds great, right?
The problem with this thinking is that it’s rarely easy to earn $100/month and it takes a lot of time and effort just to get there. There is also a lot a lot of maintenance that goes into a website. I know that even when I was making about $4/month from blogging I was spending several hours a day trying to build the site and my online reputation.
I’m a fan of dreaming big, I have no problem with people setting goals, even if they’re unrealistic. However, I think people have taken the idea of passive income too far. It’s a great goal, but why aim for passive income online when you can cash out and take a big lump sum now?
The problem with passive income online is that nothing lasts forever. You may have a sweet website that gets a lot of hits, but if you’re not maintaining it, it will eventually get less traffic and earn you less money when someone else decides to challenge you for a specific search term.
A lot of people aren’t opposed to selling advertising space on their site or taking some private advertising opportunities, but when they think about it, they don’t want to risk stifling their site and being banned by Google. Um, you’re making $50/month now, why not grab an easy $5,000 and hope for the best? Even more, you can use a factoring service like CBAC Funding LLC that does all the work for you so you can focus on what you do best: making money. While some sites get banned after a short gain, many more have earned 5 figures knowing that if and when the ride comes to the end, they’ll have done pretty well for themselves.
Why try to earn $100/month forever (or however long a website brings in cash for) when you can take $5,000 right now? Doesn’t it seem like a no-brainer? It would take 50 months (over 4 years!) just to break even, and who knows, maybe there will be enough private advertising opportunities to make $10,000, $20,000 or more over the same time period?
Readers, do personal finance bloggers have an unhealthy obsessions with creating passive income? Are they missing the big picture?