The Myth of Passive Income & The Best Thing That Ever Happened to Online Business (do you agree?)

The Myth of Passive Income & The Best Thing That Ever Happened to Online Business (do you agree?)

passive income is a lie

“If you want real passive income, dedicate your life to making the people around you better, every single day.”


Thanks for all of your inspiring responses to our “Name our Movement” contest last week. Wow! We’re still sorting out the best name, but we have chosen the 10 random folks to win a free LYL shirt. We will email the 10 winners this week.

Now for today’s topic…

Btw, pardon the occasional unsavory language below – when I get on a rant, sometimes I can’t help myself!

The Biggest Lie on The Internet

Okay so I have a bit of a bone to pick.

The more time I spend online, the more I learn about how to build this business and the more I get requests from people for help, the more I hear the same damn word and it’s about to cause me to jump out my window (which would suck since I only live on the third floor).

The phrase is…

Wait for it…

Passive Income.

This word is complete bull shit.

And worse yet, it’s totally screwing up the hopes and expecatations of those of us trying to put our own dent in the world.

In my experience there are only two kinds of people who talk about Passive Income.

  1. The people who don’t have a clue what they’re talking about.
  2. The people trying to sell you something.

The Internet is an amazing place.

A place where we can take an idea or belief and have the possibility of turning it into a world-wide movement (and even a massively profitable business). We have the tools to offer our talents and skills to the world and to help everyone from your buddy down the street to the teenager just starting high school in Moscow – I have been fortunate to get the chance to do both and just about everything in between.

And you can do this for next to ZERO financial investment.

No time in the history of the world has anything like this been even remotely possible.

Today that is different.

The dream of doing work you love and living your life ‘on your own terms’ is alive and thriving.

But with this opportunity comes a few interesting problems.

When it’s possible to start and launch a business or website in a single afternoon, you will naturally have a lot more shitty sites and offerings out there. And hence, I believe that over 95% of the content and products sold on the web are total dog shite.

But what’s worse is if you’re a tad clever and willing to put in some hard work, you can learn about how to market to the masses of people out there who so badly want to be living this passive income dream. And if you learn enough and figure out how to apply it properly, you can successfully convince the masses to buy this b.s. dream, without hardly having to produce much of a product at all.

After all, it’s the marketing that deterimes how likely a new customer is to become a first-time buyer.

And this is how the slimy, smarmy, dark and evil world of Internet Marketing is born (for the record, I HATE that world and hope to never again mention it on this site)…

Learn how to sell the dream of passive income and in turn create an income of your own.

Sadly, people can operate like this for a while – as long as they are constantly finding new customers (which on the web could be endless), they can keep delivering half ass value (at best) and build their empire of bull shit.

This. Disgusts. Me.

But before I kick off on my rant, let me get something clear.

In business and in life you always have two options:

  1. You can take the easy road and spend your life trying to game the system, or
  2. You can pour your heart and soul into creating work that helps people in a way that can legitimately change the world.

Option one will seduce us for our entire life, and it’s surely brought all of us to the dark side once or twice.

And sometimes it will actually work. But you’ll know what you’re doing, and over time it will start to wear you down. People will start to notice and slowly you’ll get that reputation. The one that causes people to stop inviting you to parties and stop sending you emails.

As it turns out, I keep two lists of the people I’ve met and have spent time with online. One for the system-gamers and one for the genuine world changers.

Sadly list number 1 has a lot of people on it.

List #2 has very few.

If you’ve been a part of our community for a while, I’m sure you could list many of them – I can count them on two hands. If I mention their work on this site, it means they are on list #2. In fact I have a 10-point checklist that must be satisfied before I even considering doing a partnership or affiliate promotion with anyone online. If they don’t check all 10 boxes, we don’t work together (and we likely don’t become very good friends either).

When these guys on the short list launch a product, they have my full support. I trust them as people and trust the impact they strive to have on the people around them. I know how much they break their back to help their audience and create meaningful change. Some of them even do it to their business’s detriment.

I am thankful to know these people. They inspire me. They teach me. They make me better.

And they provide tools that I could never create on my own – that help our community in a very meaningful way.

Live Your Legend and you all would not be where we are without them.

That’s why I could hardly sleep when I found out my friend, mentor and SF workout partner, Leo Babauta, would be launching a course on Simple Fitness Habits – a topic so core to our mission here that I know will help all of us in game-changing ways.

That’s also why I have done everything I can to help Corbett Barr as he launched his new project Fizzle, an online membership dedicated to providing honest video training for online business builders. You can be sure that as soon as he releases it to the public, you will hear about it from me – after all, he’s serving a need that directly helps us live our legends.

Whether I receive an affiliate share for promoting their products or I recieve nothing but giver’s high, I will promote their work in every way possible. Because it’s genuine and I know it will help all of us in a massive way.

It’s not about the money. It’s about providing value.

The Passive Income Myth is Lined with Gold

But here’s the best news of all.

The countless dishonest marketers out there selling the passive income bull shit myth presents all of us with an opportunity.

They set the bar so low that even if we decide to just do what we say and deliver real value, by default we will stand out.

There is always a market for quality. And that market is getting more and more valuable.

Last month I launched a course on How to Connect with Anyone. I spent nearly 400 hours in front of my computer creating it.

I spent dozens of hours collecting case studies, reading books, doing interviews and filming hours of video, take after take after take…until we got the message just right.

In the past month it has genuinely changed the lives of hundreds of the people who have used it – I know because I get notes in the mail and emails and thank you cards almost daily. I will share more details and success stories when we open up the course to new members early next year.

Deciding which path to take…

Early in my career I decided that I was going to do everything in my power to create content and tools that would transform the lives of those around me.

I now have a lot of good friends with fantastic online “Passive Income” businesses.

They all also happen to work harder, smarter and more genuinely than anyone I’ve met.

Take two of the most successful online businesses and brands on the web: Ramit Sethi of I will Teach You To Be Rich and Tim Ferriss of The 4-Hour Work Week. They both have ‘passive income’ coming in from all sorts of sources. Their businesses and brands make a fortune. They are genius marketers. But above all that, they offer value that geninuely makes people’s lives better. And I know for a fact, from spending time around them and people close to them, that they work harder and smarter than probably anyone you’ve ever met.

Or even my buddy Pat Flynn at Smart Passive Income, is very honest and clear that the $40-$70k or so a month that he ‘passively’ makes and helps others learn how to make is the result of massive dedication – in fact I think Pat’s approach to passive income is the most honest and real out there.

But what about the offline world?

Do you know who holds the Guinness World Record for The Highest-Grossing Actor Of All Time?

Samuel L. Jackson.

He has brought in over $7.42 billion in his career and it’s said that he makes about $300,000 a month in residual ‘passive income’ from past films!

He has also stared in over 100 movies and often does more new movies per year than any other actor in Hollywood.

Doesn’t sound exactly passive to me.

That is not a coincidence.

work hard to do work you love and help people

So let this be a warning.

The words “Passive Income” are new age speak for “run for the fucking hills”.

Don’t buy into this lie. Don’t sell it to yourself. And please, please don’t sell it to others.

Stop trying to convince yourself that this is going to be easy. That you’ll be able to ‘set it and forget it’. What would be the fun in that anyway? If we’re doing work that embodies our deepest beliefs, talents and strengths, then the last thing you should want to do is eliminate it.

None of the people above work their face off because they have to. They do it because they have found the work they can’t not do. They are drawn to it. It make them whole.

This is not to say that hours spent is the right metric for success. Definitely not. It’s crucial to be efficient and automate wherever possible and constantly be applying the 80/20 rule.

But none of that will allow you to outsource the hard (and meaningful) work.

The first tentative tag line for the Live Off Your Passion career course that we launched last year was “how to work your ass off to do work you love.”

I meant every word of it.

In building that course, I wanted to do something different. Something on a totally new level. That’s why I wrote over 250 pages and had over a dozen hours of video and case studies. Because my goal was to get people results, not to make a quick buck. I also believe that’s why it was voted the #1 Personal Development Product of 2011.

If you focus on helping people in meaningful ways, the money will sort itself out.

The best things in life are the ones we earn.

Tools Change. Values and Principles Do Not.

Recently while on a fishing trip with my dad, I was out on the porch having a cocktail as a family friend came up to me and said “Scott I want to start a website and make a bunch of money.”

I laughed as I reminded him that for 5 years I poured my heart and soul into a site that no one but my mom, dad and wife paid attention to. That I so desperately wanted to help the world do work they loved, but no one would listen.

But I didn’t give up. Because it was about the movement, not the money.

The funny thing was that as he was joking with me about his future Facebook, it was the last six hours of the Connect with Anyone launch, and every few minutes an order for $397 was buzzing through the Paypal app on my phone.

Nobody knew but me.

Sure, for that night, as I drank beers and talked fishing stories with friends, I passively made money from my web business.

And if someone had seen my phone that night they would have thought just that.

But what they wouldn’t have known about were the 400 hours of work leading up to it and the combined 17 hours of sleep I got in the two weeks before the launch.

Passive for the night, sure.

But I knew that if I wanted a chance at it sticking around, I better get my ass back to work and helping people as soon as the fishing was over.

You see, building a successful web business is no different than any of the business building of the past 500 years.

Believe in something.

Be different.

Offer real value.

Help people.

Work your ass off.


The tools may have changed, but the principles never will.

So the choice is yours. 

Choose to take the easy way, adding to the pile of garbage that makes up most the Internet – and have the reputation to go with it.

Or decide that you are going to use the most empowering and affordable set of tools in the history of the world, to alter the course of the universe in your own unique way.

Given that you’re reading this and you’re a part of our revolution here, I already know which camp you’re in.

I’m glad to have you with me.

Here’s to adding real value,


For the Comments: So do you believe passive income exists or do you think it’s bull sh*t? Share in the comments. And if you have a passive income business, please let us know! I love being proven wrong ;).

Come Join Us for a Run Tonight in SF!

Remember, tonight at the Sport’s Basement in the Presidio from 6-9pm, a group of LYL readers and I are meeting for ultrarunner Scott Jurek’s book signing and a run to the Golden Gate. I cannot wait to finally meet this legend!

Hope to see you tonight!


Images courtesy of Stuck in Customs