Interested in creating passive income? It’s hugely tempting to buy into programs or courses that teach you passive income. I know that it was one of the concepts that convinced me to start my own business.
But, there was a LOT about passive income that took me years to really understand. It’s important to really understand what goes behind creating a totally passive income stream. Hopefully, these points will help you proceed with a full understanding of your goals.
Tune into this episode to hear:
- How I was originally seduced by “passive income” years ago
- 5 important points I wish I would’ve known before I started my business about passive income
- The ONE part of business that stays consistent, and how to use this to keep your income consistent
Facebook Live Replay
Transcript of Episode
Leah Gervais: I am Leah, I am your host today. This is the Your Biggest Vision Show where we focus on your vision. We focus on fighting for your vision even when other things are not fighting for it and it even feels like things are fighting against it some of the time. I know how that can be, but your vision is the most important thing in the world and this show is designed to help you make sure you’re always fighting for it. One of the ways we do that is keep it really real and don’t try to sugarcoat everything because that doesn’t help anyone. Then when you are going through the trenches that do come with any sort of big action, you are ready to handle it and you know it’s normal and you know that you can do it and you’re not thinking that just because you’re going through a difficult time means that things aren’t going to work out for you because that’s just not true.
Today’s topic is just about that. Today’s topic is what I think to be something that is not very well discussed in general and maybe some people would argue with that. Maybe some people do think there’s people being honest about it. But in my experience, I just really want to share my own story, I did not feel like this was talked about well. And that is sort of the facade of passive income and the allure of it and the seduction of it and the desire to see online people working from a hammock or having a coconut on the beach and making 1500 thousand million dollars with their income reports from a passive funnel and they never need to work and they’re going to show you how to do the exact same thing. Anyone heard that or been excited about that? Raise your hand. Let me know that you feel me. Also just let me know where you guys are coming from. Where are you all tuning in from? I’d love to hear, even if you’re watching the replay, let me know where you’re tuning in from. I am in New York. It is kinda groggy today, but it’s going to be a good day. So when I started, I remember seeing on Pinterest lots of bloggers that were talking about how they built an online course. They charge something like $200 or $300 for it, nothing crazy and they were selling it and it was really easy to scale because you only needed to create it once and then you could sell an unlimited amount of it. They were making, you know, 10, 20, 30, $50,000 per month from these online courses. Maybe some of you guys have seen this kind of thing as well.
I do think that the trend has gone away from it a little bit, but it used to be really popular and these people that were selling them would then write about how excited they were that they were having completely passive income. They were waking up to sales on their phone. They were not even really having to do that much work anymore because they had this great scalable product. They felt like they were living the four hour work week. You guys know the whole deal. So I was totally one of those people that was like, sign me up. I wanted to know all about how I could not be in my nine to five job, how I could have something so passive at such a young age. I was like 22 or 23 when I started doing all of this. I wanted to know how I could leave my job. I wanted to know how I could not be making what, $45,000 a year, $50,000 a year whenever you’re making an entry level salary. I was there for it.
So I did all the things that people told me to do. I created a course, I built a website and just sorta like thought that the sales would come flooding in after that and spoiler alert, they did not. I actually did make sales at the first e- course I sold, which now looking back I think is like an achievement in itself because it’s just not that easy to sell anything. But of course it was not anywhere near, you know, what some people were talking about or what I had hoped that it would be or anything like that. Without going too deeply into my whole path and exactly what happened to me, what I really want to talk about is six things that I would have told myself back then that I wish I would’ve known when I was starting out, when I was really excited about the idea of making passive income and what I want to tell two people now, that come to me or even just watching this, or listening to this are sitting on Instagram, seeing people that have all this quote passive income and that their life seems super simple and these are just the things that I think are important to talk about in terms of that.
I want to preface this by saying that I fully believe in passive income. I do have passive income streams now. I don’t think those people that are, you know, showing off this lifestyle are lying at all. I think that it’s completely possible to have a life like that. So I want to be clear that I’m not saying it’s a total myth. There’s just a lot to it that isn’t talked about and should be before you decide if this is what you’re going to go all in and do and if it’s what you’re going to do with your life and your business and all that kind of stuff. So the first thing that I have come to realize now, after over three years of having my business, quitting my job, building it to six figures, being able to have $10,000 plus months every month. I don’t know why I or anyone else think that starting an online business means you don’t need to invest in your business.
I think a lot of times people think of this, they kind of see that this is possible and they want a side hustle because they’re not making enough at their nine to five job and I get that I was there. So they kind of think that if they start a blog and you know, pay for wordpress and maybe get some social media pictures taken like them, that’s going to cut it and it’s just not. If you want to start a business, then you need to treat it like a business and doing that is not a business mentality. Doing that says so many things to me now, like if someone were to come to me and they were to say that they didn’t have enough money to invest in their business, that’s this is what I hear when I hear that now. One, I don’t believe in myself because if I did believe in myself, and I understand the term investment means something, you get back again and again, it’s something that pays off. It’s not something that is just a bottomless pit. So if you aren’t investing in yourself or your business that tells me you don’t believe in your idea or your own drive or your own self discipline, otherwise you would be, you know, doing whatever it took to make this come to life so that you could get that investment back tenfold. That’s one.
Two, it tells me that they aren’t really understanding that this is a business and it’s not just a hobby for you to do. For Fun, we are going to make an extra $5,000 a month. It’s just not how it works. You look at brick and mortar businesses and the level of actual investment that we need as online business owners to get off the ground in comparison to a brick and mortar business is incredible. We do have very low overhead. So you don’t need to necessarily go out and get a business loan or get funders or get capital or fundraiser or anything like that. But you need to have money to invest in it, in order to get it off the ground and market it and educate yourself on what it is you really want to be doing and have mentors and have people that are supporting you and have people that are teaching you and have an actual professional website like no one’s going to buy from you if your website is a free wordpress site, they’re just not. I wouldn’t, that does not tell me that the person is taking their business seriously. Why would I buy something from them if they don’t even take themselves seriously? I can’t take them seriously if they don’t. So if anyone here listening, and again, I am only saying this because I thought all of these things, so this is the stuff that like little Leah, I wish I would’ve known a few years ago.
When I was so hesitant to invest in my business or I was so afraid to spend a few hundred or even thousand dollars, I wish I would have been more blunt with myself and realize that money in that way is a huge indicator of your own faith, faith in yourself and faith in God or the universe or whatever you really identify with. But if you are someone that believes in yourself, you believe in the possibility that happens when you take risks, you believe that things are working out for yourself and you believe in your idea and your work ethic, than your excited to do it, because you’re excited to see the money be made back time and time again relatively quickly or not. You know, we’re not about dictating these whole timelines, but you do believe in yourself. So that tells me that people don’t believe in themselves and it tells me that they don’t actually see it as a business and I was like that. I mean, I wanted it to be a business, but I was so scared and I was so afraid to spend my money because I wasn’t making that much money and I just thought that it was irresponsible of me to spend the money that I did have on something I wasn’t sure that I was going to make back yet. But now I can see how twisted that is because investing in my business, starting my business has still to this day, but in the best financial move I’ve ever made, I never would’ve been able to make the income that I have now if I was still at a nine to five job period.
So anyway, I’ve kind of gotten on a tangent on this one. You guys can clearly see I’m passionate about it and the reason I’m passionate about it is because when people have these objections, they are robbing themselves of their own potential. They have an idea, they have something they’re excited about. They want to start something, but they’re too terrified to invest in themselves and they are robbing themselves of the opportunity to make a difference they’re robbing their bank accounts, have the opportunity to grow. They’re robbing an audience the world, like whoever out there that they would reach with their business, the opportunity to be impacted. They are holding themselves back and playing small. And it just really breaks my heart. So I want us all to be in reality about what’s actually going on when we think we’re being “responsible” for not spending money or investing money in ourselves and our businesses when a lot of the time it is an indication of fear or a lack of trust.
Okay. Moving onto the next thing that I wish I would have known earlier on. So when I was looking at these people’s income reports, right? That used to be such a big thing. I don’t know if you guys know what I’m talking about, but it used to be really popular for bloggers to publish how much they were making online every single month. That’s for a whole list of reasons. It can be because they want to be really transparent about how much they’re making, which I super appreciate it. I mean, I’m still really grateful that I saw, I used to see those reports because it did give me inspiration earlier on that, you know, this is something that could really sustain me. This is something that could make my financial life better. So anyway, all this is to say there were a lot of income reports and I remember being blown away seeing some people have like tens or multiple five figure months from selling like a few hundred dollar course. They must’ve been selling so many of them. What I didn’t understand is that nearly all, if not every single one of the sales that those people were making with their ecourses were to their email lists. So at that time I was still living in like my fantasy land where I thought that if you had a good enough course or product or anything and you put it on your website, then like the world would just know and anyone who wanted it would just have some sort of telepathic insight where they’d go find your website and then buy it from you and that’s how it worked. I had no idea that really the only way to actually sell and make money is through an email list. It is very hard to make a lot of sales on social media because those people aren’t necessarily like your fans. They’re also not necessarily going to follow up. Like people don’t open the Instagram app to go buy something. They go, they do it just like to scroll or be mindless or whatever.
So, and then same with your website. You have to have a huge amount of traffic to actually inspire people to take action and you know, buy something from you. So almost all of those sales were coming from an email list. At the time I did not have an email list, barely knew what it was, wasn’t really sure how I could grow one or what to do it. Then even then, I started to find out that people who we’re selling to their email lists usually would sell to about one to 3% of their entire list. So we’re going to do a little math there. If you have 100 people on your email list and you sell it to 1% to 3% of them, then that’s one to three people. So if you have a two or three, let’s say a $300 ecourse and you sell it to 1% of your email list, then you make $300 if you sell it to 3% of your email list and you make $900. So as you can see, people need to have tens of thousands of people on their email list actively buying every single month in order for them to earn five figures plus in months just from a few hundred dollars course. I didn’t know this. I had no idea that I was going to need an email list of that many people that were that engaged that I had to build, email is are expensive to build. Talk about investing. That is why I would invest, if I could go back, that’s what I would invest in right away and what I wish I would have sooner. So, you know, that was a huge wake up call, really realizing that it’s going to take so much marketing and it’s not something that’s just going to be there when you put it up there. So if you think that just because you can create a course or you have some people following you on social media or whatever, that you’re going to be able to, you know, sell that much, I really encourage you to look at the importance of an email list and start growing that and really understand that you need to have a huge volume of people on that list in order for you to actually profit the way you probably want from something like a course.
Okay, the next thing I wish I would have known or that I would have taken into consideration. I really want everyone to think about this. If you are trying to build any sort of passive income stream you can really lose human connection when you do that, when that is your primary focus. I think for me, when I was going into this, I was just so excited about having passive income that I didn’t, I just didn’t think about this at all and I didn’t really realize they’re like put two and two together that you are going to get lonely and not really feel the impact that you’re making if you don’t even talk to your customers or if you don’t even really know how they’re doing or if you don’t even really see the results that they get.
I mean, sure you can kind of follow up with them or whatever, but for the most part you are building a business of isolation because you’re not relying on yourself to really connect with the people that are buying from you. And that can be a bit lonely and I wish I would have really considered that because now, you know, I’m so passionate about the results I get from my clients, that absolute most fulfilling thing thing that gets me out of bed every morning, even when I’m tired or you know, been working for 18 days straight is how much transformation I’m able to see my clients get and how much I see their lives change. So when I see them quitting their nine to five job, when I see them make their first sale, when I see them making, you know, thousands of dollars per month, $10,000, having your first five figure month, that is so, so hugely fulfilling and rewarding.
I wouldn’t get that if I was only focused on selling them a $200 course and I had no idea how it was doing or if it was helping them or anything else about it. I think you will hear people that end up making this kind of business model where it’s nearly entirely passive, often go into some sort of sadness or loneliness or they can get depressed and there’s a huge amount of factors that can go into that kind of thing. So I’m not trying to pretend that I understand the complete correlation and that it’s all due to passive income, but it’s just something to know do you want to build a business where you’re not connecting with your clients? Do you want to build a business where you’re not seeing the results face to face? Do you want to have an impact? If so, are you going to be able to do it if you’re not really working directly with the people that are consuming your material and your content?
Okay. Another thing, I wish I would’ve known that I actually recently found out this statistic and it’s so spot on a real passive income funnel, a real one, like where from beginning to end you have traffic passively coming in, you have, you know, people learning about whatever it is that you sell. And eventually you have them buying and you not doing anything you’re doing, you’re totally hands off, takes about a year to actually profit from. So that means your spending a year testing sales pages, getting people’s testimonials, testing different emails, testing different sales strategies, testing different traffic sources, et cetera. You are perfecting all of that and if you’re making any money, if you are making sales, which it’s not guaranteed that you will, I want everyone to be really clear about that. Just because you put a sales funnel out there doesn’t mean the first time around people are going to bite. This is why we have to test so much and mind we need to learn from people. So if you start making money, then you need to be putting it back into your testing of it. You need to be putting it back in ads so you can get more data.
You can hire a designer to help you with this sales page. You can hire a copywriter. Like all these things you need to do in order to make sure that this is converting at a high percentage, for you to actually have it passively. It takes about a year to perfect all of that. So I don’t want to scare you away necessarily, but I just want to illustrate the point, which is really what this whole episode is about. Passive income is not an easy way out. It actually takes so much upfront work. It takes so much failure. I don’t mean that in a bad way, but like you have to test so many different things and you have to really figure out what does and doesn’t work if you want it to be a well oiled machine. So knowing that it takes about a year to actually profit from some sort of passive funnel should really help you understand what you need to be doing in the meantime, you need to do a service.
I know so many people come to me and they say, I read the four hour work week and I want to be making money from my hammock and I just know that I could, you know, build digital assets and hire a team and they could be selling 24/7. Now, I don’t want you to think that you need to always do service based work, like this isn’t a nine to five job, but for the beginning when you are just trying to get things going and you are trying to spend the money so that you can get information about your funnel and you can get information about your passive funnels, you need to have a way to fund it. So you can think of your service based work as an investment in yourself and your own business, basically. It is not like sacrificing the dream of never working. It’s making that dream happen. You know what I mean?
So for instance, if you are a graphic designer and you have a dream of making an ecourse about graphic design for entrepreneurs, like Photoshop or something like that that sells totally passively so that you don’t need to, you know, do it. In the meantime, while you’re building that funnel, while you’re perfecting the course, while you’re getting testimonials, while you’re getting traffic, etc. You probably want to have some graphic design clients. Doesn’t mean it needs to forever be like that, but in the moment it will help you if you are not having to rely on your funnel to get all your money that you know you need to live, when really your money should be going back into the funnel to perfect it.
Okay, the next thing that I want to talk about when it comes to this whole thing is just this is probably gonna make some people a bit annoyed. So I’m just going to go for it because sometimes you just have to lay it down. Again, this is something I was a victim too. If something sounds easy and good and too good to be true, it probably is. I recently heard in a podcast that if you feel like you are really attracted to easy things or you’re really attracted to very profitable things and you’re not really examining why or what you’re going to do about this, then it probably that it’s usually an indication of laziness. I know that might sound harsh and again, it’s something I’m saying to myself and I never have thought of myself as a lazy person. I’ve always been pretty self disciplined, but I still would go back to me a few years ago when I was starting out and say, why aren’t you willing to do the work that it takes to really make this happen? Why are you so excited about something passive or something that’s easy or something that’s overnight or something that doesn’t take any work? Like what is really drawing you in about that? Usually it’s because you’re looking for a quick way out of whatever situation you’re in. You are just hoping that things are going to be easy and you’re not really willing to do the work that it takes to make things happen. I don’t want anyone to be fooling themselves about how much work it takes to go to make any business successful, let alone a passive income stream. It is not for the faint of heart. If it was easy, everyone would do it.
But instead, this is why we have people at nine to five jobs their entire life. This is why we have people that always say they’re going to do something and then don’t. This is why people are just waiting for things to happen in their future and not taking action right now. It’s because it’s actually hard. So you need to ask yourself, if I am being attracted to someone who’s promising me passive income and it sounds really easy, what’s going on there? Because that probably is more of an indication on you than them. That probably indicates that you are looking for any escape out of your current situation and that you might not be really willing to do the work that it takes to make this happen. So have an honest heart to heart with yourself. You know, what are you really willing to do? What are you willing to do to change your life? What are you willing to do to change your finances? What are you willing to do to have complete freedom and complete control? You can have it, it is at your grasp, but it is going to take a lot of hard work and it is going to take faith in yourself. If you don’t have those things, it’s a bumpy ride. But if you do, nothing can stop you because then you’re not living in fear. You’re not afraid of every investment. You’re not afraid of failure. You’re not afraid of doing the work. You’re not afraid of missing out on parties so that you can, you know, stay in sometimes and work on your business because you are so confident that things are gonna work out for you.
Okay, one more point and then we’re going to wrap this up and that is just that courses like everything in business and life are, is a cycle. I think that it had its heyday where everyone was obsessed with it. I think people started really wanting to crave more human connections. So it kind of faltered a little bit. I also think it got a bit saturated and I also think that consumers started realizing that courses can be helpful. Some of the time I’ve taken courses that have changed my life. I do not want to bash them. But a lot of times you don’t end up finishing it or you end up having more specific questions because you’re just not a carbon copy of everything else. All these things that have made people go back to wanting more connection, wanting more one on one work, wanting more community, wanting really that sense of impact and co creation when they’re learning and not just feeling like they are given, being given a textbook of how to do something that isn’t really personalized to them necessarily. So it doesn’t really relate to them or resonate with them.
But my point here is that don’t fall in love with any type of one way to sell things. I don’t recommend falling in love with being a coach or consultant per se. I don’t recommend falling in love with being a blogger. I don’t recommend falling in love with being a course creator. I recommend falling in love with your mission because when that’s where you start from, if that’s where you’re really starting with this then you can do that in any medium. You can do that in any form. And so when courses are popular, you can make a course about your mission. When you are wanting to do a live event, because that’s what people really want to do now. They want in person stuff. You can do a live event about your mission, uh, when you want to do one on one coaching or you want to do a service or whatever, you can do that. So really honed in on not what it is that you want to create, but why do you want to create it. And what kind of like perfect case scenario you would have if you got a letter from someone who did take your course or was your client or did go to your event when to anything of yours and they were saying how overjoyed they wear. What would it say and why and what type of impact would you have made? That’s where we should lead from.
Okay. This has been a little bit of a ranty episode. Thank you guys for bearing with me. But this is obviously really important to me because I think a lot of these points hold people back from really reaching their full potential. They might be attracted to business and then they start thinking that they’re attracted to it for one reason and they lose sight of really the thing they want to put out there in the world and what they’re really motivated about. And then they don’t really go for it or they hold themselves back, you know, and no one wants that.
So I hope that you guys enjoyed this and if you are interested in further mentorship with me, I’m obviously a straight shooter, but I get my clients really, really great results. I have a spot open in my mastermind, which is my most elite, highest offering. It is a six month program. So if you are interested in that at all it will be invite only, but we’d love to hear from you and see if you could be a good fit for that final invitation. Just email us at firstname.lastname@example.org or just message me on Facebook or Instagram. We would love to talk with you or if you have any other questions about your side hustle, your business, really making sure you’re not holding yourself back. I am here for you. I want to hear from you guys, so let me know what is going on. In the meantime, I hope you have an amazing, amazing week. I will talk to you guys all soon and here is to your biggest vision.
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