The Truth About Passive Income

I want to tell you the truth about passive income and what I’ve learned in two years of building a business around it.

Photo: Kate Boyd, Entrepreneur; Source: Courtesy Photo
Photo: Kate Boyd, Entrepreneur; Source: Courtesy Photo

When I started my business two years ago, I did so amidst all of the promises of a “set it and forget it” kind of life. You’ve heard about this, right?

If not, it goes something like this: “Create a passive product, put it out there and watch the money roll in.” 

I believed the hype and did it … then I sat back and waited.

At first, it worked! People were signing up here and there. I was getting paid for something I didn’t even have to pay for anymore, and it felt awesome. Then something happened. Everything stalled and came to a screeching halt.

I was missing a critical piece of the passive income puzzle. The part they don’t always tell you (or at least it’s not shared quite as loudly as the other stuff).

So today, I want to tell you the truth about passive income and what I’ve learned in two years of building a business around it.


1. Passive income is possible.

Passive income comes in a lot of forms. You can create and sell an ebook, build a mobile app, create a blog with advertising and affiliate links, sell a membership-based online course, etc. Passive products can take a little more effort, but they are still mostly hands-off. This kind of passive income the gurus talk about is possible, but my other two truths will show you how.


Photo: © armada1985, YFS Magazine
Photo: © armada1985, YFS Magazine


2. Passive income requires testing and time.

For passive income products, there is a lot of time and effort you have to sink into product development, but also into the marketing and sales system you’ll need in order to sell it. And that takes time.

You need time to test various marketing strategies and sales techniques and find the right formula for your audience. Your audience isn’t like the other experts’ tribe; and they’ll have unique needs.

So you need to create the right message and systems; all the while communicating and keeping close track of how everything is doing (this is where analytics comes into play) so you know how to tweak it and get the most out of your efforts.


Photo: © UBER IMAGES, YFS Magazine
Photo: © UBER IMAGES, YFS Magazine

This part of the passive income process can take a long time and become very frustrating. The changes are often small and cumbersome. So after your initial launch, give yourself plenty of time to see what works and adjust as you go.


3. Passive income isn’t as ‘passive’ as you think.

The final truth is that passive income still takes effort. You have to consistently build your audience and convert them into subscribers at launch and sustain that same effort over time.

I tried going hands off for a while, and after a few months the whole system came to a grinding halt. No one was subscribing and my website traffic had dropped significantly because I stopped putting in the effort to market my business.


Photo: © loftflow, YFS Magazine
Photo: © loftflow, YFS Magazine

As soon as I started creating more content, giving more value, and connecting with my audience consistently again, my conversion rate for sign ups and for purchases increased to 200% almost instantly. So, while I don’t have to update products all of the time, I do have to put effort into getting eyes on them (i.e. marketing).


That’s the truth about passive income. It’s not quite as simple as set it up and watch the money roll in, but it is absolutely possible with the right systems and marketing strategies in place.

What’s your experience with creating passive income online? What has worked best for you?


This article has been edited and condensed.

Kate Boyd is a business and communication strategist that helps faith-driven women create freedom to do what matters most by building the foundation for their online business and making their first income using their God-given gifts. Join her community of dreamers and doers here.


© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.


In this article