I have noticed that many people are interested of finding a risk free low investment side hustle that would earn them easy money. They are looking for the best ways to make passive income. Every day I see these home-made-consultants sharing vids and pics of their dashboards showing big earnings. They are encouraging people to create passive income by either investing on stocks, starting affiliate marketing, drop shipping or they share info about websites that supposedly pays you for ridiculously easy tasks. But wanna know why you should be careful taking any advices from them?
8 things to arouse your healthy skepticism:
Imposters and illusions Yep. Some people have tendency to lie and create illusions of something they are not. On social media this is sadly common - and unfortunately it is a pretty effective way to gain more followers. Success attracts us. Interesting is that succeed people usually share some same personality traits. Low neuroticism is one of those and it makes them resistant for example guilt. Some people gain much because they (s)care little.
Psychological Cognitive Biases The evolution of our brains have created heuristic automations to protect us by developing faster and lightly processable cognitive tasks. a) Survivorship bias makes us concentrate only on people that "survived" through some process. It is important to understand that there is always people who has done the same things - even better - than the one who succeeded. We just do not hear about those "losers" as much as winners. b) Questionable cause or False Cause Fallacy makes the (succeeded) home-made-consultant see correlations and causations when there is not any. For example, if someone claims "I became a millionaire because I slept only 3 hours a night", the more correct statement would be "I became a millionaire ALTHOUGHT I slept only 3 hours a night." c) Dunning-Kruger effect makes people with low ability at a task overestimate their ability. As we know; the more we learn the more we know of how little we know.
Hidden motives Be aware that sometimes people who are encouraging you to start making passive income (their way) might actually try to use you to increase their passive incomes. They might try to sell you some courses, get you on their sites filled with affiliate links or maybe get your email to boost their email marketing. So some on them are making easy money by telling people how to make easy money.
Luck (not understanding odds) Would you take advices of how pick numbers from a Lottery winner? Only change is permanent. Circumstances are constantly changing. You might have missed that specific train of luck.
Probabilities and Proportionality This home-made-consultant usually has many followers. So you are not the only one to hear his revolutionary hints of building some kind of web site or channel for profitable affiliate marketing. There would be hundreds - even thousands - similar sites. Look again paragraphs three and four.
Effort Things MIGHT become easy when you first invest your sweat and - quite often money. But working hard will not guarantee success. It MIGHT raise the odds, but it is still more likely to fell flat than succeed: 90% of new startups fail. And I bet it has not so much to do with lack of effort.
Patience Like with diets, only patience brings long term results.
Ethics How would you feel doing affiliate marketing for pseudoscientific stuff like diet pills? Or drop shipping useless low quality products of which manufacturing and shipping deprives people and/or nature? Because sadly, that stuff tend to sell. Do not want to moralize but I encourage you to just think about it.
Are these the best ways to make passive income?
So, are there any easy ways to start creating passive income fast? Yes! There are some relatively easy ways to START but making money with it is hard and unlikely - and definitely slow. But there are "easy" ways to raise the odds of making it happen. Could some of these trendy side hustles be THE Option?
Here is three quite common forms of passive income that I have seen promoted quite a lot:
1. Stocks
Investing is always risky, but being patient and decentralizing the portfolio is probably the safest way trying to make a profit. Boring, I know, but the end result is more likely better than putting all the eggs in one basket. It is also worth noticing that according to economist Burton G. Malkiel blindfolded monkeys throwing darts do better job finding the winning stocks than do pro brokers. And, like someone said: "Stop thinking about investing on cryptocurrency if you hear you mom talking about it." Oh, and remember the tulip mania...
2. Affiliate marketing
To make money on affiliate marketing you need a website, social media channel or other forum or channel for reaching a lot of people. I for example opened an ASMR YouTube channel a while ago planning to start affiliate marketing on it. The one - and only -video I have produced there has got three views. All by me. The average amount of visitors on my website has been around 3 visitors a day. If you come up with a great idea and can produce content that many people find interesting, you might get some clicks on your affiliate ads. I am still working on that.
3. Dropshipping
The estimated amount of eCommerce sites is somewhere around 12 -24 million. If you think you can separate your web store from competitors this could be a way to start a online business. Downsides are that the margins are usually quite small, shipping times long and as a shopkeeper you answer to the customer if supplier screws something up. And according to different analysis approximately 80-97% of online stores fail.
MY PERSONAL RECOMMENDATIONS 1. Think differently Instead of people who have succeeded I encourage you to listen the ones who have failed. From them you will get the best information to avoid making the same mistakes. The statistical fact is that it is much more likely to loose than win. Be also aware that Better-than-average effect might fool you to think that you have better chances than others to win. 2. Remain sensitive Remain sensitive to people’s needs. By prioritizing those needs over your own dreams you can innovate and find a niche market. I for example started painting for fun in 2017 and soon realized people liked my art. Just by listening I started understanding better what they want. Up to this day I have sold over 300 paintings and earned close to $80000. Creativity does not arise in a vacuum. It arises when you keep your senses and mind open. 3. Try to find things you enjoy doing I know it is difficult. And it has actually nothing to do with becoming succeed. It’s just the best way to enjoy life and avoid the frustration that unnecessary dreaming causes. 4. Keep learning This is the best way to pursue happiness. Learning is rewarding, it feeds the creativity and it helps to understand different perspectives - and of course it helps you to find better solutions. 5. Stop valuing events I was diagnosed with Multiple Sclerosis back in -99. Because of that I got interested in brains. Now I am working with a B2B business promotion concept based on neuroscience and behavioral science with an university researcher and psychologist. Was the diagnose good or bad? Neither. Just an event that lead me to where I am now. When we stop valuing the events, loosing becomes a lesson. 6. Join Fiverr I joined there. I have made $10 for designing one album cover. And yes: I started doing affiliate marketing with them. Namely, just like you, I am also looking for some nice ways to earn a little extra. Have not worked so far. Anyway, here is the link:
What comes to passive income ideas I too have only frames to offer. YOU are the one who will have to create the art inside them. And it would be even better if you built the frames yourself. Man needs to be active to become passive. Good luck with whatever you come up with!