Passive income is overrated

Weekly letter, May 10th, 2024.

A few months ago, my partner - who's an executive for a public company - was composing an email that was to go out to a lot of people within his company. It was to be professional, and contain a few key pieces of information, but also personal and relatable, in juuuust the right way. (A fine balance in these corporate settings...)

My partner was, understandably, struggling a bit. He's not used to writing in this way, and so the whole thing felt really awkward for him.

I had nothing going on at the time, and so I offered to help. I put on my copywriter hat and we got to work on his email. We played around with the sentences, added and subtracted, brainstormed, and read it out loud to each other. My partner was starting to loosen up, and suddenly found the process fun.

And I was having a lot of fun as well.

This was the profession I had left four years ago, burned out and demotivated. And now here I was, realizing how much I'd missed it: Feeling useful. Contributing with my skills. Helping someone else solve a writing problem.

The email went away the next day, my partner felt great about it. And the thought of going back to freelancing has lingered in my mind ever since. Should I do it? Would I enjoy it again? Or would it just be more of the same old stress?

Freelancing can be extremely demanding. Prior to pivoting into art, I had been a freelance web designer, consultant, and copywriter for many years. And even though I was very good at what I did, had built a body of work and a reputation, and was getting good work somewhat regularly, the work drained me and stressed me out. Not so much working with clients, but all of the work that goes into finding clients, landing assignments and getting paid. The freelance hustle burned me out, slowly but surely over the course of a decade or so.

But, so has building the business I run now - a passive income business - and in a much shorter time span.

This type of business is a different beast, but a beast nonetheless. The notion of passive income is attractive because it decouples time from money. We only have 24 hours in a day, and there's only one of us. So if we sell a service and work one-on-one with people, there's a cap on how much money we can make. Monetizing your time isn't scalable. And an un-scalable business is, like, a mortal sin in the entrepreneurial world, where it’s all about maximizing profit.

But the very thing that's so coveted about passive income - the passivity of it - is also the thing that's most stressful about it. You do a bunch of work up front... (and it is a lot of work), but there are no guarantees of it working, or being worth it. In fact, the work that goes into generating "passive" income rarely brings back the desired returns on investment.

That's in stark contrast to all of the over-hyped business advice rampant on social media, where "anyone" can supposedly, hypothetically "make six figures" by [insert current trendy fad here].

"Make money in your sleep!" has been the catchphrase of business gurus since the beginning of the internet age. And yet, the reality of it is rarely that simple, or satisfying.

I can conclude, from firsthand experience, that passive income is not all it's cut out to be. Passive income is overrated. And I say that as someone who has earned pretty much all my living these past few years from "passive" income streams: YouTube adsense, online courses, digital products and subscriptions, art prints, et.c.

First of all: Passive income takes a LONG time to build.

I'm not making nearly enough of an income, even after three years of building this business. Had it not been for my partner's steady paycheck, I could never even have done this to begin with.

And it's been the same in the past: passive income has mostly been a nice little addition to my primary freelance income. And I believe that's the case for most businesses, unless they're mega-huge and long-running.

The only way to get a business profitable from the start, with no capital, is to sell services. To go out there and GET clients, instead of hoping and praying for them. To build "active income".

Second: Passive income is not really passive.

In order to be able to "make money in your sleep", you need a very large audience - something that takes years to build - and not even then are you guaranteed to earn a decent living wage. Not without hustle. Passive income demands a lot of time and money spent on marketing (and sometimes advertising as well), to sell your products. So there's nothing passive about it. Just a greater lack of control, because...

Third: Passive income is highly precarious and unpredictable.

The thing I miss the most about freelancing is the personal agency I felt. I had the power to build my skills and my portfolio. I had the power to make things happen, to get out there and pitch my services. I had at least some amount of control over my income.

Whereas, in the creator economy, I've had very little. I've put in years of work, relying on platforms that could cut my income by half overnight if they wanted to, and seeing my income fluctuate wildly due to factors out of my control.

I've worked just as hard, if not harder, than I did as a freelancer - but with less autonomy, less peace of mind, less financial security.

If only a certain audience size came with guaranteed monetary compensation... But that's not the case. Selling things over the internet is getting harder every year. It's a tough crowd out there. Views and subscribers don't automatically translate into sales. And if you don't have a solid business infrastructure underneath, no amount of followers will guarantee you a livable income.

As just one recent example, check out this artist who reached 100k Instagram followers... only to realize that she was still as broke as ever.

These are some of the reasons I'm planning on getting back into freelancing this year. And I feel really excited about it. Not only does my business need it, but I need it. I need the personal connection and the more hands-on relationship with my clients. I need the feeling of agency and satisfaction that comes from helping people solve problems.

I'm looking forward to combining my current content creation endeavors with more active streams of income.

My only problem now is figuring out what services I want to offer. 😅 I was wondering if you could help me out with that?

Which of these services would you be the most likely to hire me for in the next year or so? (Assuming you run a business, and had the budget.)

1. Writing. (Helping you write your bio, your website/product copy, your artist statement, your press pitches, your sales emails, or anything else for your business.)

2. Website design. (Helping you build, or improve, your website.)

3. YouTube strategy and coaching. (Helping you start or grow a YouTube channel.)

4. Email marketing/newsletter setup. (Helping you set up an email list and grow it.)

5. Creative business consulting. (Helping you strategize your business, brainstorm products and services, improve your marketing, etc.)

I'm always curious to get your feedback. 🖤

What's your experience with passive income? Do you have passive income streams? Do you sell services? What's your current ratio of passive/active income in your business? 😊

With love,

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New video: 5 reasons you're not improving your art

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Some favorite things lately:

• On the topic of passive income vs. freelancing, I love this video by Deya, on the ugly truth about "passive" income:

(Highly recommend her channel in general for freelancers, or if you're thinking about freelancing. Great advice and resources!)

• Brandon Sanderson on Ali Abdaal's podcast:

This guy fascinates me so much. If I could ever have his work ethic...

• Former child-actor Jeanette McCurdy's memories "I'm Glad My Mom Died". Chilling, heartbreaking, hilarious at times, and the best memoir I've read since "Educated" by Tara Westover.

• We finally got to watch Godzilla Minus One, and it was worth the wait. Stunning. Thrilling. And so refreshing with a Japanese, authentic-style Godzilla movie. Minus the Hollywood tropes.

• This interview with Dr. K from the Healthy Gamer channel, focusing on the mental health of content creators:

Don't let his channel name fool you: It's not just for gamers. What he talks about is so relevant to all of us nowadays. Especially those of us spending a lot of time online. I highly recommend his guide to mental health as well. Have been working through both the depression and the anxiety module for months, and it's done wonders for my sanity and inner peace.

• Counter Craft: "Yes, people do buy books":

Yes, People Do Buy Books

I love it when people challenge hyperbolic claims and take the time to present a more nuanced perspective. 🖤

• Jonna Jinton singing with wild cranes (No, I'm not jealous...):

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If you're an artist, check out my self-paced courses on drawing and watercolor painting:

I also sell fine art prints, and canvas prints, of my work on my website: