There’s always loads of stuff on social media about creating passive income – aka recurring revenue or residual income – which is basically a way of scaling yourself, so that you still earn money while you sleep. But what they are NOT talking about it The ORIGINAL Passive Income…
The way most people talk about it, the money just drops into your bank account without you having to do anything. You can see why it’s such an appealing concept. Except it’s not really, because things that are marketed as passive income typically involve a LOT of upfront set up.
Let’s say you wanted to create passive income from a digital product (which I definitely see on social media all the time). You’re going to have to do your research and come with a product that people actually want. Then you’re going to have to create it. Plus you’re going to have to set up landing pages, websites, funnels, email sequences, payment processing and all that other stuff.
Then, you’re going to have to keep marketing and promoting it. People can’t buy it if they don’t know it exists! You’ll have to provide an ongoing customer service element, as inevitably there’ll be people who can’t download it or demand a refund. It’ll probably need regular updating and tweaking too, maybe even re-recording videos or rewriting the digital downloads. Because let’s be honest – what’s relevant and current in 2025 is likely to be out of date by 2026, and certainly by 2030!
There is literally NO WAY to predict whether that ebook or online course (or whatever you create) will still be relevant to your audience 18 months from now, let alone still be in demand and generating revenue for you in 5 or 10 or 20 years from now. Businesses change; industries change. Times change.
And at that point, are you going to want to put in all those hours and hours of work and all that energy again, to create another new passive income product? Because they ONLY provide a recurring income when you put in the groundwork.
Don’t get me wrong – once you’ve done all the work upfront and you’ve got the digital product on your website or wherever, and people buy it, it’s great to have those bits of £25 or £100 pinging into your bank account, without you expecting it.
But the original source of passive income is NOTHING to do with selling products online!
It’s not to do with writing a book and getting royalties, or writing a song and getting money every time it’s played on the radio.
The original passive income is about you getting growth on your savings and investments. Compound interest is known as the eighth wonder of the world for a very good reason! And it’s something that can happen behind the scenes really easily, without you (genuinely) having to do very much at all.
By having money earning interest in a savings account – or an investment like a pension or an ISA, which is growing every year – you’ll get growth. Then your growth gets growth, and so on and so on, until you’ve got this pot of money that’s substantially bigger than when you started.
Yes, you’ve still got to set it up upfront, but it hardly takes hours to do. And once it’s there, it can trickle along behind the scenes and do what it needs to do, with hardly any more time from you.
Now at this point, you might be thinking “but that’s not income, is it?”.
Well, the good news, it can be!
You can set up some types of investments where the growth (or some of the growth) is paid out to you as income. The trick with this is growing the pot to the right size, so that when you start pulling the money out as income, you don’t run out of money.
This is something I help my clients with all the time. Especially if you’re in your 40s or 50s, still enjoying your work and have no plans to retire in the foreseeable future – it’s such a brilliant and simplt thing to get in place NOW.
You may not need passive income from your investments right now, while you’re still working in your business. So you can focus on setting up assets today that are growing in value – knowing that when the time does come that you want to work less, you can then switch it into something that is generating income and giving you money to live off and do fun stuff with in your retirement. It’s something people have been doing for YEARS, which is why we call it The ORIGINAL Passive Income!
The other amazing thing about this type of passive income is that it’s perfectly possible to create an income of £50,000 a year or more, completely tax free.
That can’t happen with a digital ebook or online course, can it?!
True wealth means having a financial system that ensures your money keeps growing… having a flexible plan to future-proof your money, so your success lasts.
If you’d like to know more about how to create £50,000 a year tax free for yourself, just click here to send me a message now. And we can have a chat about ways that we can work together to get this done!
Until next time,
Claire