“Here is a really easy side hustle that even an 11-year-old can do to make you $125/day with no startup costs.”

-- This quote comes from a video that is a comically oversimplified guide to making t-shirt designs to sell on Etsy, which is a market flooded with thousands of sellers running multiple accounts that dominate the online store --

Passive income has become a term many throw around when discussing quick and easy ways to make a substantial income. Though many definitions exist, the general consensus is that passive income is a hands-off, sustainable source of money. Investopedia labels it “income that requires minimal effort to obtain.” These business ventures have become increasingly popular through the surge of social media posts that produce countless videos around the topic. However, as social media often does, misinformation surrounding passive income plagues these schemes. Additionally, many social media influencers make substantial money from their posts, not their passive income methods. Despite how easy and unbelievably effective these posts make passive income seem, there are significant factors for any startup that should be considered before beginning.

Quick and easy money does not make a source passive income; no money will ever be completely passive. No matter how small, making money will always require effort. The New York Times reports, “While many people claim to be making passive income, particularly on social media, only 20 percent of American households earn such income.” This statistic exposes how rarely individuals actually earn what the IRS deems passive income. A significant reason is, without a doubt, how hard earning actual passive income is. 

Let's start with rentals. Loaning anything, equipment, motor vehicles, property, etc., may seem passive enough but requires significant effort to maintain and market as time goes on. Whether it is repairs after damages, cleaning and restocking after every use, or dealing with daily wear and tear, these laborious tasks will leave you wondering what part of this process is considered passive. 

These hardships do not end with rentals. Dropshipping is undoubtedly the most acclaimed source of passive income pushed by social media, namely TikTok. This requires the rebranding and selling existing products on several platforms after marking up the prices. With this description alone, several issues are apparent, and every step of this process is challenging. You must:

-  Find a product open to third-party sellers
-  Have a strong and consistent market 
-  Somehow to justify the markup on your prices
-  Obtain licensing for certain products

Assuming one can somehow find a perfect product that passes all these hallmarks, finding the medium to sell your items poses its own set of challenges. Just selling locally would significantly decrease potential customers, but shipping your product comes with issues like calculating how to ship without losing money, avoiding the hundreds of scams targeting sites like eBay, and potential damage during shipping.

While there are countless “methods” to make money quickly, these two examples highlight several issues one can encounter when starting their passive income quest. 

Finding revenue streams to support yourself is essential to today's world. Understanding economics and personal finance holistically is even more critical. Mindset is everything. When starting your journey, make sure you remember that passive income doesn’t equal easy money. The only thing that promises to make you substantial cash is hard work.