One of Many: No you will not make millions eating bon-bons

Posted by Heather Villa, CMA, MBA, MSM on July 15, 2009 in: Business - Plain & Simple

I like to blog about different things, so sometimes I start series. For example, I have an “Ooops” series where I talk about business “ooops” that I see (which is much neglected; sorry). A new series I want to start is Business Urban Legends – a series revealing things that people (clients, colleagues, innocent bystanders etc.) have said or say to me in daily communication.

Some disclaimers:

  • I will change the name of anyone I am discussing (or just not use names at all).
  • I will not speak regarding clients with whom I am working and bound by confidentiality.
  • Almost all blog posts that I write go through my editor prior to being posted. Some of these will not, as some of my best written blogs are written on the fly and without editing. So excuse any typos etc.
  • There are exceptions to every rule (or, in this case, “legend”), so when I speak, I am not saying something is impossible or can’t be done. I am speaking about the majority of the time or about my own experiences.

So,  in a nutshell, you will not be a millionaire eating bon-bons (or doing nothing). This is an all too common misconception. I hear people saying this or telling me all the time:”I just need a product or two that can create a passive income stream and then I will have time to travel or time to spend with the kids.”

Uh… FALSE!

I don’t mean to be rude, but there are so many problems with that statement it is not even funny.

1. Products do not ‘create’ a passive income stream: YOU create the passive income stream, whether creating the product, doing the marketing, or both.

2. 1 or 2 products is not (normally) going to create enough of an income stream to pay for lots of travel or all of your expenses so you don’t have to do anything. (Again there are exceptions: You could be the inventor of the light bulb!!!)

3. There are other things that exist besides “having” the products. How are you going to sell these products? How are you going to provide service, support, or help on the products? Who is going to do your bookkeeping, marketing, copywriting, patenting? There are overhead costs or work associated with anything you do or sell. Keep that in mind.

I know people that make millions. They do not have 1 or 2 products and spend all their time lounging on the beach. If you are rich or independently wealthy, maybe you can pay enough people to do everything for you so that you don’t actually have to do anything. But from the get go there will probably be a loss, so the statement still won’t hold true.

I know people who make millions… and they all work. Whether it be by writing their web pages, or thinking up copy/content, or networking, or speaking, or just thinking up and researching ideas. They ALL work.

I told this to someone today and they responded: “I know this one person, [name removed to protect her privacy] and she sells a package of ebooks for $19.95 and she makes millions!”

Well, I happen to know this person, and I happen to know she does not make “millions”. She makes about a million in a year, but not “millions”, and her primary source of income is not from that package. Her primary source of income is in her consulting and she charges thousands of dollars an hour for her consulting service. That $19.95 ebook package is just a marketing ploy to get you “in the door” – to get you to purchase something not too costly, so that she shows off her stuff enough to you so that you will maybe hire her later at $3k per hour (and she consistently markets to you her other products and packages through her email marketing campaigns).

In addition to this, she speaks at about 50 events a year (that’s about 1 a week) so that she can be known as the “expert” in her niche market. (If speaking at an event a week is not work, I don’t know what is).

On TOP of all that – she HAS a niche market. What she is teaching and consulting on is very very specific and she knows her stuff. Being an “Internet Marketer” is not a niche market. Being a [changing her expertise here to again protect privacy] specialist in squeeze pages would be the “niche” market.

Last, but not least, she is just not “telling you” she has done it, she has helped hundreds of people do it who are also experts in their niche markets. This proves she is good at what she does if she has helped them and they are successful.

I am sorry to be the bearer of bad news, but unless you are the CEO of a large corporation and have enough employees to handle every aspect of your business (and even then this is far-fetched) the chances that you will never have to work again is slim to none.

There are exceptions, of course: Inventors, people who have such a grand idea that it is a big success and they are able to hire the staff needed to man it, etc. But the average entrepreneur who wants to get started or grow their business is not going to be making big bucks off an ebook or two when that is their whole product offering and they don’t want to work.

My advice:

Passive income IS important, but until you build up a reputation or client base to market these products to, it will generate peanuts. To build up a reputation or client base takes work – lots of work – or lots of money to pay the right people to do it for you.

Try to work passive streams of income into your billable activities (or whatever it is that you do) so that one day you will reach a level where your passive income is large enough to tone down the actual work you do have to do so that all of your work can be related to creating and brainstorming up new passive income ideas.

Heather Recommends:

I love working with coaches, freelancers, and entrepreneurs to help them become more successful. If you'd like to improve your business, find out how I can help.

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