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I've seen a lot of annoying commentary on the internet over the years about how to earn "passive income" by making money online. There are some legitimate ways to start an online business, like an e-commerce store , or make money from your social media following, podcast, or YouTube channel.
But a lot of the people talking aggressively about passive income on the internet seem as if they're selling a get-rich-quick scheme. The big dream of online passive income is often based on the idea that you can start a business on the internet, and then watch the money roll in as the business mostly runs itself, with very little involvement from you.
The reality of making money online is much more complex -- and time-consuming -- than that simple dream. Here are a few big lies about passive income online to watch out for.
Myth No. 1: "Passive income is easy! Anyone can do it!"
Reality: You often need special skills, persistence, and a lot of luck to build up an online business that runs itself. There are millions of websites and apps and podcasts and YouTube channels in the world; why should anyone pay for yours?
And I don't mean to sound harsh or cynical. But with an online business, you're up against a lot of competition. If you want to start a content-based business like a YouTube channel or Substack newsletter, your content is going to be competing against everything else anyone could potentially be reading, listening to, or watching -- all the greatest music, movies, and television ever recorded. Everyone on the internet can decide to exit their browser and close the app and stop listening to your TikTok video at any moment, and go be entertained by something else. Are you ready for that?
If you want to start an e-commerce store, you're competing against Amazon and Walmart and other goliaths of big box retail. Why should someone buy from your online store instead? Can you carve out enough space in the crowded global economy, where you can offer special deals and a one-of-a-kind customer experience? That's the hard part that you need to figure out before your business can "run itself" and send passive income flowing to your bank account.
Myth No. 2. "You can make big money fast with passive income businesses!"
Reality: It takes time and effort to create a successful ecommerce website or build up a social media following or a Substack audience or otherwise create any critical mass of people online who are willing to be sold to. Not everyone can be a guru or highly paid influencer, and the ones who are successful have often spent years creating content and promoting themselves online. Are you up for that?
This doesn't mean you shouldn't try to pursue some kind of creative side hustle. By all means, publish your content. Start a blog, start a Substack, talk to people on TikTok, and try to find an audience for your ideas and expertise.
Not everyone needs 1 million social media followers to have a successful online business; you might make plenty of money just by finding the right audience of 1,000 "true fans" who love what you do, and who will spread the word. But unless you have good luck and go viral overnight for all the right reasons, it might take years to find enough of an audience to really make money online.
Myth No. 3. "This proven Mystery Box Business System will teach you everything you need to know to earn passive income!"
Reality: Many successful online businesses happen by trial and error, and sometimes partly by accident. There is no secret formula. There is no perfectly repeatable, 100% fail-proof process that works every time. Don't spend a bunch of money on online courses or coaching from dubious "experts" who claim they can help you make passive income.
If you want to get serious about starting an online business, start by reading blogs and watching (free) training videos from e-commerce and marketing platforms like Shopify and HubSpot. Learn the fundamentals of SEO and digital marketing and how to make sales online. Test the waters with your own website before you spend money on scammy "expert" advice.
The real way to earn passive income or make money online
The best way to earn easy, reliable passive income that you don't have to work for is to open a high-yield savings account . But if you want to make money online quickly, and you don't have much cash to invest in doing SEO and buying search ads for an e-commerce store, the best way to make money online might be to just go out and get a freelance gig or remote side job.
That's right: if you want to make money online fast, it's not going to be "passive." Go find a company that's willing to hire people like you right now, and pay you money today, for actual active work.
Bottom line
Earning passive income from online businesses is possible. You can sell information products (like e-books or recorded webinars) to people who need your expertise. You can start a successful e-commerce site. You can build up an audience of people who love your social media posts or subscribe to your content. But making money from passive channels doesn't happen overnight, and it usually doesn't happen without investing some start-up capital and putting in many hours of hard work.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy .
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