When the internet popped its first bubble in the 1990s, you might think that the excitement around the creation of multiple unproven new business opportunities that could provide us with a constant passive stream of income from only a few hours work per week would subside. But in reality, the myths of internet side hustles that generate a passive income with little to no work remain with us to this day.
In 2018, many of these claims come from those pushing obscure cryptocurrencies and other Blockchain-related products, where the understanding of how they work remains low enough for the unscrupulous to try and take advantage of people by telling them they are about to sign up on the ground floor of the next Bitcoin. Whilst some of these valuations may turn out to be true, there is a lot of shake-out in the crypto-space that will happen first, and that will leave thousands of people out of pocket.
When a leaflet came through my front door last week pushing the promise of earning a fortune via an undefined “crypto”, it became abundantly clear that this is the new scheme people are pushing to those that still live under the impression that money can be achieved without hard work.
Part of the reason people believe these myths is the reporting that surrounds many startups that makes it appear that Facebook or Airbnb became overnight success stories and turned their founder into billionaires without the hard graft. But the reality of creating a unicorn is very different. It is possible to create a company from nothing and build it to be worth over a billion dollars faster than ever before, but that is only because of the scaling abilities and huge global marketplace that comes with the internet. These founders often live for years on shoestring budgets, and for each success story there are thousands that go bust and end up with nothing.
Those pictures of fast cars and holidays on beaches entertaining models may look attractive, but in most cases these are photoshopped stock images designed to lure you into a scheme, where in reality the only winner is the person selling the course or ebook on how to get rich quick. One unnamed schemer even has the audacity to sell an ebook for $99, where there is only one page of content and it really says “Create and ebook about how to get rich and sell it for $99” – I suppose you have to respect the honesty.
Digital opens the possibility of scale, but businesses still take time and money to run – we need to end the myth that generating money passively is a real option. Maybe you will create a new product yourself that does just that, but you can be certain you will not learn how from an ebook or online course available for $99 on the web.
The only real source of a passive income is for those with the capital to invest in shares. This comes with its own risks, as companies can crash as quickly as they can grow, but with enough capital and the right investing partner the returns can be generated with little input from you, but this is just because you have talented people working for you and spending all their days researching the best companies to invest in – it’s not really passive at all.
Photograph by Zach Copley