Everybody wants passive income…

I love direct marketing.

Because it’s the ultimate study in human psychology.  If you want to peer into how human minds think, you need to look at their behavior “in the wild.”

Contrast that with academic psychology.  In academics, you recruit a batch of willing participants, stick ‘em in a lab with one-way glass (literal or metaphorical), and poke and prod them to see how they respond.

The thing about doing that is there’s an extra factor involved.

Just like on a quantum physics level, the mere act of observing reality changes it…  When you stick a bunch of participants in a lab to do a study, they behave differently.  They “perform” for the sake of the researchers.

It’s only in the “real world,” when people think they’re not being observed, that their true nature comes out.

All of this as a lead up to say…

You, me, and everybody else is really freaking lazy…

What do I mean?

Well, there are three perpetually-powerful hot buttons that you can add to virtually any selling message, and maximize the number of people it attracts.

Fast.

Easy.

Cheap.

Everybody wants that.  No matter what their problem is that you’re offering to solve, if you can solve it faster, easier, or cheaper, your proposition automatically becomes more attractive.

That’s our inherent laziness coming out.

(Or, if you want to be kind, call it the “ingrained tendency to preserve energy and resources for true need situations.”)

One way this manifests itself over and over and over again in the entrepreneurial marketing space is…

Drum roll…

The passive income myth…

Imagine — you, making millions, fast, easy, cheap!

In short, if you label a business opportunity as offering “passive income,” you’ll have sheep flocking to it.

Yes.  We all want it.  Nothing wrong with it, in theory.

It’s when you confuse wanting it to be true with it actually being true that you get into trouble.

Here’s the thing…

Passive income doesn’t really exist!  At least, not in the way most people think.

There’s really not a business opportunity where you simply say, “this is what I do,” don’t put in the work and effort, and have it just deliver money into your bank account, month after month, year after year.

(Random ADHD sidebar: I just saw a really compelling space ad — this morning — that told me that Nebraska residents were saying one word and making an extra $500 or so per month.  Is that a passive income pitch for the ultra-lazy, or what?!)

A better definition of passive income…

— I’ll bust three specific “passive income” myths in a minute…

— PLUS share one source of ALMOST passive income…

— PLUS a model of how to actually achieve what most people think of as passive income…

But first, we need a definition that gives you a new way of thinking about this.

(Because thinking about how you think, including how you define concepts, is the kind of high-level sh*t that will make you successful — but that nobody in the money-for-nothing, passive-income crowd wants to ever hear about this.)

Here’s my better definition…

Passive income is best understood as residual income you get as the ongoing byproduct of active work.

In other words, you have to do the work first.  You have to do the work to create value.  You have to do the work to earn the income.

It’s just that in some cases, that income can keep coming in irrespective of the actual hours invested, and disproportional to the effort and energy expended, and occasionally on an ongoing or even perpetual basis.

I know that’s a mouthful.

Let’s look at some examples…

Copywriting royalties as passive income…

Even when I taught an entire program on Copywriting Royalties and Pay-for-Performance,  I didn’t pitch it as a passive income play (although I certainly could’ve!).

Here’s the thing.  I’ve written copy that’s earned me money for years after it was written.  I put in the work, did my job to create value, and as long as that copy was still delivering value to the client, they kept paying me.

I’ve literally had checks for thousands of dollars show up in the mail when I wasn’t expecting them.  How’s that for a nice trip to the ol’ mailbox?

But I don’t hold any illusions about that.

That is leveraged income.  That income is directly tied to the active, sometimes extremely painful work I put in to get that copy ready to go into the market.

It’s just work that continues to pay off months and sometimes years later.  Based on value and results created, not the time and effort expended.

Subscription businesses as passive income…

We’re working on a big home renovation project.  The other weekend, we were ripping out our kitchen.  Throughout the day, I was getting notifications on my phone that I was getting monthly membership payments from BTMSinsiders members.

It sure feels passive in the moment.  Because while I’m doing things that are completely unrelated to work, I’m getting paid.

The same thing happens the first time I check my phone in the morning.  I often get notifications of all kinds of money coming my way, while I slept.

If you’re in the subscription business, this can feel very passive.

But then I remind myself that I’ve literally written over 1,000 Breakthrough Marketing Secrets emails since 2014 that have driven that success.  That I’ve recorded and sourced over 60 hours of high-level training to bring value to members.  That I’ve proactively developed and invested in a huge number of campaigns that have gotten me this far.

And, not only that, I remind myself of the decade-plus of waiting I did, after knowing this was a business model that would probably work for me eventually…  Where I focused on doing the work and getting real-world, in-the-trenches experience in everything I teach, to have the kind of understanding, credibility, and authority to deliver the content I offer today.

The same thing goes for ANY subscription business.

Imagine you’re building a software-as-a-service (or, SaaS) business.  You have an opportunity for near infinite scale, by assembling bits and bytes in a computer to solve a problem for users.

And once that’s up and running — assuming success — the income becomes somewhat perpetual and seemingly disproportionate to the actual work put in on a weekly basis.

And yet…  There was all the time in the ideation phase of the business, and the work to plan the software.  There’s a ton of development time, as the software is built to solve problems.  Then there’s the work of tech support and customer service.  Then there’s the work of marketing and promotion.  Then there’s the work of turning it into a business, with employees.

That’s a lot of work!

Same goes for a supplement business.  Or a membership business.  Or really any other business that runs on subscription revenue.

Done right, it creates HUGE leverage.  And you can put in a ton of work to build something that grows and creates income largely independent of your input.  But to call it passive is massively deceptive.

Affiliate earnings as passive income…

I’m going to make this one quick.  Because I have some more value bombs to deliver.

Here’s the dirty truth about affiliate marketing: The only people who make real money in the “affiliate” markets are people who sell the affiliate business opportunity on the promise of passive income, and the very small portion of affiliates who treat it like a real business…

Which means, you have to do a bunch of active work!

Want to know who is making a fortune as an “affiliate” on Clickbank, for example?  It’s the people who know how to run traffic.  They either have a huge email list they’ve developed through time, including developing a trusting relationship with those people…  OR they know how to buy or otherwise control a ton of traffic through paid advertising that must be managed on a daily or even hourly basis.

Yes, it can be leveraged and scalable, and some of it perpetual…

But it still requires doing the dang work!

The only true passive income…

There’s one exception.  And it’s an exception I rather like.

Make your money make money.

Still, it’s a byproduct of the active work it took to make the money in the first place.

But if you make a bunch of conservative, risk-hedged, income-oriented investments…  You may come close to the proverbial “passive income.”

There’s no sure thing in investing.

And frankly, you do have to do the work of picking the investments as well.

But if you make a ton of money through your entrepreneurial activities or other active work, and you invest it wisely, you may end up in a situation where your money is making enough money that it does truly start to feel like passive income.

But that’s not very sexy.  Hard to sell a bunch of high-priced courses on that.

So let’s wrap this with a focus on what you can do to develop something close to what most people would consider “passive income…”

The secret of leveraged time…

If there’s no such thing as passive income, you have to look at alternatives.  And the best alternative I can think of that gets you close to the appeal of passive income — while still being based in reality — is leveraged time.

That is, doing work today that will pay off in a big way, disproportionate to the amount of time and energy invested.

A couple examples…  And I’ll mostly stick to my main industries, although if you’re in another business you should consider how they translate — because they do.

Scalable revenue work…

When you create an advertising campaign, whether for yourself or clients, it’s scalable revenue work.

That is, it doesn’t take that much more time to put the campaign in front of 1,000,000 versus 1,000 people.

Yes, there’s probably some work on the media buying and optimization side, but even that creates income disproportional to the work.

Look for work that you can do that can add value to a million people’s lives as easily as one hundred.

Repeatable revenue work…

There’s a model in marketing services called “area exclusive.”

That is, you go to a local dentist (for example), and you offer to create a marketing campaign for them.  They can use it all they want for their practice, but you retain the right to use it outside of their immediate geographic area.

Then, once the campaign is proven, you go to dentists in other geographic areas, and offer the same exclusivity, with the benefit of it being a proven campaign.  All that it takes is a tiny tweak for them to make it their campaign.

The more clients you do this with, the more money each campaign you create will generate for you.

(And, in many of these area exclusive businesses, it doesn’t take much work to turn a dentist campaign into a chiropractor campaign into a [insert professional service here] campaign so you can create even more scale.)

What work are you doing that could be replicated, to generate more revenue without much additional effort, by essentially copying the original work with minor adaptation?

Recurring revenue work…

Finally we get to subscription businesses.

The thing that makes a subscription business work is the ongoing perception of value that makes it worth renewing.

And perceived value does require creating then communicating actual value.

Which means if you want to create a subscription business?  You have to be constantly creating value for your members!

And that requires?  Drum roll…

Work!

The great thing about recurring revenue is it often takes far more of an investment to bring someone in the front door than it takes to keep them from going out the back.

So as long as you have value delivery and retention figured out, every bit of effort you expend bringing new people in adds momentum to the subscription.  Which means it adds recurring income to you.

Again though, this is still not passive income!

It’s about finding ways to leverage your time, such that you’re able to get more cash output from the same input.

Final thoughts?

The passive income keeps you lazy.  It also enriches the people who sell it to you, even while working their butts off to make that sale.

Thinking about leveraged time and scalable active income shifts your focus.  You ask what work needs to be done to create the long-term result.

And THAT is the secret.

Yours for bigger breakthroughs,

Roy Furr

PS: Copywriting has been one of my best skills for generating so-called “passive income.”  That is, I do the work once, and I keep getting paid, sometimes large amounts, for months or even years at a time.  The secret is in understanding direct response — and specifically, the kind of copy that moves markets.

I recently taught some of my most powerful response-getting secrets in High-Velocity Copywriting.  One of my BTMSinsiders members, who took the course, just left this review…

One of the best courses on copywriting I’ve ever taken. The value in here is insane. Roy is absolutely mad giving away so much value at this price point!”

— Claudio Alegre

Click here to get started with High-Velocity Copywriting.