Five Passive Income Methods that aren’t “Passive” At All

renting houses for income

The phrase “passive” is one we often view with mixed feelings. No one likes it when you are passive aggressive, for example; but everyone loves passive income. Essentially, passive income is income you earn when you’re doing nothing. It’s money that comes to you without you working for it every second of the day. Your 9-5 job, as it stands, is not passive income (unless you spend all day at the office scrolling your social media newsfeed, planning vacations and taking coffee breaks all while managing somehow not to get fired and still collect a paycheck…that’s pretty passive). Passive income is the best kind, because it requires the least amount of effort. It might take some doing up front, and then it’s just income and you’re just enjoying life.

However, despite what people think about passive income, it’s not all that passive. You do have to work for that money. You have to, up front, invest some serious time and probably some serious money into that effort. Once you’ve done that, many assume it’s time to sit back and let the pool boy serve you mimosas on the beach in Turks and Caicos while the money piles up and you work hard on nothing but your tan. It sounds good, right?

If you can find a way to gain a little passive income, you’re doing well in life. However, you should understand before you commit to something now and expect to be able to let it go later on that not all methods of earning passive income are nearly as passive as you might believe. Many of these investments require that you spend some serious time working on them even when you believe that your time is over. Knowing this now is going to save you some serious time and a big headache in the future because these five commonly mistaken passive income methods are just not all that passive.

Rental Properties

You buy a piece of property, you fix it up a bit and then you rent it out. Now you sit back and let the rent check come in every month without a care in the world, right? Why aren’t we all landlords since it’s this simple? Well, that’s not entirely true. You now have to find a tenant, and that’s not always easy. You’re talking background checks, credit checks, gut feelings about people and frequent checks to ensure your rental home isn’t being used as a place to cook meth or a place for the entire frat house to gather every weekend. And believe me, you will get phone call after phone call from your tenants requiring that you fix this or that. They’ll call about not only the big stuff, either, but everything. The front doorknob jiggles. I mean, they could take a screwdriver and tighten it in 30 seconds flat, but most renters would rather allow you to do this – even at 5 in the morning. And that’s just the tip of the iceberg in terms of how much work it is to own a rental property.


You write something, people read it, you make money while you’re getting your hair done. Except, no, that’s now how it works. Sure, you can take a break every now and then and be all right, but blogging requires frequent work. You need to know the internet, the trends, what’s relevant and you need to keep your blog updated. No one wants to read a blog and follow it religiously when they only have the same three posts to read on a regular basis. You want them to have something to come back to every single day to keep them interested, and it’s not at all passive – even when it is passive.

Online Sales

It seems as if this might seem like common sense; you sell something, you have work to do. But many people seem to think that they can run an online business selling things and not have to do much work at all. It seems, in their minds, that all requires doing is listing items, allowing them to sell themselves and that’s all. But you have to ship them, answer questions, provide additional photos and talk to strangers with questions. It’s not nearly as passive as you might think.

Online Shops

I cannot tell you the number of times I’ve heard someone mentioning opening an Etsy shop as a means of passive income while they stay home with their kids and join PTA programs and volunteer in the classroom. It’s not passive income. If you want to open a shop, you have to provide a good. You then have to create that good. You then have to market that good, talk to buyers, discuss custom products and you have to ship them when they are ready.

It never fails to amaze me that people seem to consider online shops passive when they are actually very hard work that requires ample time and attention.

Stocks and Investments

These are more passive than many of the other forms of income on this list, but aggressive traders need not apply. If you want make money in the stock market, you have to do ample research. You can leave your stocks alone, but you do have to pay attention. Even if you have no intention on trading your stocks or selling your investments at any point, you still have to know which stocks and investments are performing well, which are not and so much more. It’s not a passive form of income when you put this much thought and effort into it.

Even those who hire an investment advisor still like to keep up with their investments, speak to their advisors and stay in the loop. What this means is that it’s not nearly as passive as one might think. It does require effort, though it can be a very good source of income when needed. That’s what we love about investing and stocks.

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