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Why Making Passive Income Online is Hard Work


In theory, making passive income online is a great way to earn money by doing almost nothing at all. However, supposedly "passive" income actually requires a great deal of upfront and ongoing work if you expect to earn any significant compensation. Residual income opportunities, such as affiliate income and the like, will only earn you a very small amount of cash, unless you are willing to put serious time and effort into both the initial setup and the maintenence of your income sources.

Google AdSense

One popular way to earn passive income is to allow Google to run advertisements on your website. The setup process is reasonably quick and easy, and you earn money every time someone clicks on one of the ads from your website. However, you should only expect to make a few cents per click (and it's against the rules to click on ads yourself). Additionally, only a very small percentage of people who visit your website are likely to click on an advertisement. This means that, to make a decently large sum of money, you'll probably need thousands of unique visitors to your website every single day. This will require a huge amount of website promotion, which will be ongoing for as long as you run your website. Without your effort poured into promotion, you might make an extra dollar every now and again - enough to be potentially worthwhile if you already own and maintain a website, but not worth setting up a whole new website with the sole purpose of making passive income from it.


Publishing can offer good residual income opportunities, whether you write articles or more in-depth eBooks. Articles can be posted on sites like eHow or Bukisa to earn you a portion of the monies generated by advertising with your article, and eBooks can be sold by setting up a website with a ClickBank account. However, publishing can hardly be called "passive." Most people take around an hour to write 500 words, which is a fairly average length for an article. EBooks, depending on the length, can take weeks or even months. They might prove to be good income generators for some length of time - the "shelf life" for most non fiction writing is about 4 years - but your earnings will simply be delayed payment over time for the large amount of upfront work you accomplish.


Here's a novel idea: refer people to various websites and get a cut of the money they produce. All you have to do is get people to sign up, then you can sit back and wait for the money to start pouring in. Unfortunately, this isn't quite how it works. There are a number of reasons why referrals aren't going to be your retirement fund. Firstly, you have to find people who are willing to go through a sign up process, as well as produce content for whatever site you are referring them to. This in itself can be a difficult task, and even if you do assemble a team of referrals, you will be making an extremely paltry percentage of their income (which will probably amount to only a few dollars at most). As far as pay per hour, you could make more for your referral efforts if you used the time spent referring to work a regular job.

All this isn't to say that passive income opportunities are pointless; simply that they require a great amount of effort, and so aren't especially "passive." As with many income opportunities, with "passive" income plans, you can expect to be compensated according to the work you put in.

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