Why Passive Income Websites are a Waste of Time (and How WordPress Can Earn You More Money)

“You can watch the money roll in without lifting a finger.” “Kick back on the beach as your profits soar.” “Wouldn’t you like to make a living while on vacation?” You’ve likely heard all of these pitches before. If you’re involved in the online business world at all, odds are good you have.

These pitches are the main marketing points of passive income sites. You know, the tried and true Internet marketing campaigns that promise the world without any work? Yeah, those. So many people swear by the passive income business model. And hey, if it’s working for you, great. A success story is a success story.

But I have a bit of a bone to pick with the whole idea of “passive income.” Because in reality, I don’t think there’s anything passive about them at all.

I know that’s a pretty bold claim, especially since the concept of generating passive income online is so prevalent. But I want you to stick with me for a bit while I discuss why I believe this to be the case and how you can embrace these decidedly impassive sites to build revenue using WordPress.

What Is a Passive Income Site?

According to Investopedia, passive income can be defined as any earnings someone brings in “…from a rental property, limited partnership or other enterprise in which he or she is not actively involved.” Sounds simple enough, right? And in fairness, the concept is pretty simple. Passive income is money you make while not doing anything.

As far as how this applies to the online world, there’s very little difference in the definition. I like how it’s defined at Real Passive Income Ideas, actually:

“…passive income streams simply come from assets, and assets are either bought with money (eg rental property) or […] bought through sweat (eg ebook).” — Richard, Real Passive Income Ideas

Whatever your asset, be it a home or an autoresponder course, the idea is to put it out there then let it do the work for you. And then you can lounge on your deck, kick up your feet, and watch as the moolah rolls in.

Passive income sites act as a central hub for your online moneymaking activities. Like a portfolio or a resume site, a passive income site works to promote something on your behalf. However, unlike these other kinds of sites, you don’t actually have to do any work to make a sale.

So far I’ve been talking about all of this in pretty abstract terms. It’s time to change that and get down to the specifics.

Some Ways People Make “Passive” Income Online

In all reality, any business that involves selling a product is passive in some way. I mean, once the product is developed and created, you’re not actively creating it anymore; rather, you stand back and watch as people buy it and your bank account grows. But when you hear people talk about online passive income, they’re referring to a specific kind of business and specific kinds of products.

Here are a few examples:

The Best Espresso Machines is a blog dedicated to coffee makers--and includes plenty of Amazon affiliate links to rake in the dough.
The Best Espresso Machines is a blog dedicated to coffee makers–and includes plenty of Amazon affiliate links to rake in the dough.

A Blog Site with Affiliate Links

One of the most popular ways to earn income passively online is by starting a blog and populating it with affiliate links. So, the idea here is you’d create a site about a topic you enjoy or have some knowledge of already. You’d add new content regularly as you should with any blog.

Then you can sign up for affiliate programs for products or services related to your blog’s topic and include links to these things in your posts.

You can also include links or banner ads in your site’s sidebar for the affiliate programs.

A blog site is about as low-cost as you can get in terms of starting up and it can be quite low maintenance. Once you get your initial content up on the site, you can outsource new posts and so long as those affiliate links are included, you can—in theory—watch your bank account grow while you sit back and relax.

An Online Store That Uses Dropshipping

Creating a product to sell is decidedly active, not passive. And selling other people’s products is active too when you have to build your own store and maintain inventory. However, if you use dropshipping, all you have to do is set up a store and drive was web traffic to it. Everything else is handled by another company and you walk away with a share of the profits.

Tom Ewer's Paid to Blog guide is an ebook and e-course in one.
Tom Ewer’s Paid to Blog guide is an ebook and e-course in one.

An eBook

Another popular online passive income strategy is to write an ebook. Then you just need to build a website for it and watch as the money rolls in with each purchase. You only have to do the work upfront and then you just sit back and enjoy notifications from PayPal as more moolah hits your account. This is often touted as one of the best ways to earn a passive income online.

Resell an Online Product 

You can also resell digital products created by others. This is a good option if you don’t have the time to create an ebook or something but still want to earn passive money. Basically, you sign up for an affiliate account with someone who’s created a digital product (ebook, guide, online course, WordPress theme or plugin, etc) and build a site to promote that product. You can either sell it directly on your site or sell it via affiliate links to the primary seller’s site. If you make a sale, you’ll earn a commission.

backstage
Backstage is a powerful membership site with exclusive forums, classes, and a job board.

Start an Online Course and Sell Memberships

Another thing you can do is create an online course for a particular subject. If you feel like you have some know-how that could be useful to people, write down your thoughts and build a course around them. You can offer this information through a membership system. People pay a fee to access the course.

After you create it, people will just continue to sign up for a membership and you’ll continue to earn. You could even create videos for your course instructing people how to do something like performing the perfect golf swing or cooking your award-winning chili recipe.

Create a Website Guide 

One final option is to create a website guide. So if you’re really into fishing in your spare time, you might want to write a guide to fishing in a particular region or using a particular strategy you’ve found effective. Or if you’ve been successful on social media, your guide might be a list of strategies for building a following.

This sort of falls between creating a blog and an online course. The information can be presented on your site for free with affiliate links or through a subscription. How you earn income here will vary, of course, but the idea is the same as the other methods described above: Create something once and continue to collect income for months or years to come.

Setup As the Passivity Exception

Now, anyone in the business of convincing you to start a passive online company will tell you that getting started does take actual work. Often, quite a bit of work. You’ll need to write a piece of intellectual property from scratch like an eBook, guide, or several blog posts. You’ll need to set up an online store. And though you’re not creating the products yourself, you will still need to invest considerable time in setting up the site and customizing it.

This startup work is something that anyone involved in establishing passive income will admit requires some serious elbow grease. It’s the great exception to the whole notion of “passive” income in that it’s decidedly not passive. And for the most part, this is acceptable. People seem to get on board with this idea. “Hey, if I just buckle down and do a bunch of work right now, I’ll be able to sit back and enjoy the fruits of my labor later.” It’s a simple enough concept.

But I think the passive income purveyors tend to ignore a few important facts. And this is the most important one. Yes, there is work involved with setting up a passive income site but…

…It Doesn’t Stop With Setup

Therein lies the rub. Seriously, this is my biggest problem with passive income sites and all the 4-hour work week, get rich quick Internet marketing gurus on the web today. They’re all quick to admit that setting up a passive income stream takes really hard work but they often ignore the maintenance factor.

It’s best to illustrate this by example.

Let’s say you start a blog site. You put in a ton of effort and time in getting everything just right and pre-write a bunch of posts, making sure to sprinkle affiliate links throughout. Once it goes live, you can just step back and watch the cash roll in, right?

Not exactly, even though that’s what passive income pushers would have you believe. No, once your site goes live, you need to perform various marketing tasks like promoting your posts and interacting with people on social media, commenting on other blogs, and seeking out new promotional opportunities. Oh and any good blog out there isn’t just preloaded with content and left to stagnate. No, you actually have to write new posts, too. And even if you hire someone to write the post for you, it’s you who has to edit them, schedule them, and oversea the whole operation. All of these things are not passive at all.

One can argue, of course, that you can outsource all of these tasks, which would make the business much more passive. Fair enough. But taking that route makes the whole notion of a passive income site blend in with any other kind of online business out there for which you’d be the owner who had hired people to complete day-to-day operations.

For most people, starting a passive income stream requires more hard work than daily beach lounging allows.
For most people, starting a passive income stream requires more hard work than daily beach lounging allows.

That’s why I think the whole concept of passive income sites are based on a fallacy that they are different somehow from any other business and any other money-making scheme. For one, you still have to put in a ton of work to make anything worthwhile. People argue that it winds up being worth it because you’ll continue to make money long after you’ve finished creating that online course or ebook or what have you, but I think that’s a faulty assumption as well.

You see, you’re putting in all of this effort upfront for which you’re not being paid. You’ll then earn your paycheck for this effort you put in on spec later while you’re not directly working anymore. So, when you get down to it, that’s really just delayed income, not passive income!

And if you outsource the maintenance work required for your site, you’re effectively acting as CEO of your little online business. You still have to think about the big picture stuff, oversea product creation, and make decisions about how to move forward. And that’s different from running any other kind of business, how?

I guess what I’m trying to say is what’s the point of creating a separate category for “passive” businesses when it’s really just a hyped up way to promote going into business for yourself?

It might all seem pedantic but I think the words we use to describe things are important. And calling a business passive when it really isn’t can set people up for disappointment and even failure. It’s not a fair description of the work involved. Sure, you might be able to lounge on a beach as money rolls in but only after you’ve put in many hours of work first and only with the knowledge that you’ll have to sit back down at the computer again at some point to invest further in your business.

All of this being said, it’s true that some business require more work than others. So while I think there’s no such thing as a passive income site I do think low maintenance income sites exist. And lucky for all you WordPress users out there, some tools and methods do exist that make it possible to increase the earning potential of your sites.

Low Maintenance Income for WordPress 

Just because the whole notion of passive income isn’t all that passive, doesn’t mean you can’t build monetization into your WordPress site with minimal effort. You’ll still need to participate in all of the general site upkeep tasks like writing new posts, marketing, and site maintenance, but the money-making approach you take can be quite simple and require little work on your part once set up.

I’ve put together a small collection of plugins here that make WordPress site monetization a snap.

Note: Many of these plugins require that you sign up for a membership with a third-party site to be effective.

  • Amazon Link

    amazon-link

    If you’re signed up for an Amazon affiliate account, you can easily add links to products in your posts, pages, and sidebar widgets using the Amazon Link plugin. You can manually insert product links or you can use an Amazon search widget to dynamically create links for you. Each link that’s created will include your Amazon affiliate ID, insuring you receive the appropriate commissions.

    Other features include a shortcode, localization so site visitors will see links to the appropriate version of Amazon based on the country they’re in, global options, local override capability, templates, and more.

    Amazon Link is free.

  • Amazon Product in a Post Plugin

    amazon-product-in-post

    Another way to integrate your Amazon affiliate links into your site is to use the Amazon Product in a Post Plugin. It makes it very simple to insert an Amazon product listing onto your site by using the ASIN or ISBN-10. This is really helpful if you have an Amazon Affiliate account but aren’t all that pleased with the standard features available.

    You can add products to an existing page or post or create new ones for each product. This is a good solution if you maintain a blog on a regular basis and want to earn a little extra money from the endeavor. A product can appear at the beginning of a post, at the end of a post, or even within the post content. Utilize the included shortcode for faster insertion. You will also need an Amazon Product Advertising API to make this plugin work.

    The Amazon Product in a Post Plugin is free.

  • uContext for Clickbank

    ucontext-for-clickbank

    Another plugin worth checking out if you’re interested in affiliate marketing is uContext for Clickbank. This plugin locates keywords within your site’s content and turns them into contextually relevant links to affiliate products on Clickbank. This is a really easy way to monetize your blog in a matter of minutes.

    You can control how many links appear in each post or page, how they look using CSS, and you can even custom select what products get linked to. The premium version adds on even more features like click reports, a bulk keyword editor, site wide keyword selection, link redirection customization, and more. The premium version ranges in price from $27 to $97.

  • Advanced Ads

    advanced-ads

    If earning from ads is more your style, the Advanced Ads plugin is a good choice. It’s simple to use and ideal for those who deal primarily in content. The plugin itself is lightweight and makes it easy to manage and display ads on your site. It even includes features for conducting split testing and optimization.

    And if you’re serious about your ad income—taking it away from low-maintenance territory here—you can make use of the several paid add-ons available like tracking, responsive ads, sticky ads, and popup ads.

  • Ad Injection

    ad-injection

    Another option for managing ads on your site is called Ad Injection. This plugin allows you to insert any ad from any service like AdSense, Clickbank, Amazon Associates, and more into your site’s posts and pages with just a few clicks. You have a say over how many ads appear in your posts based on their length. You can even customize your ad’s viewers by customizing by visitor referrer, IP address, and the post’s age.

    This plugin includes support for ad rotation and split testing as well as many other features. It can make managing ads easier but setup is a bit involved so keep that in mind before installing this plugin.

  • AdPress

    adpress

    If you have some money to spend, you might consider the AdPress plugin to handle your advertising needs. This plugin allows you to sell and display ads on your site. So if you’re not into the whole third-party ad service thing, this plugin can make getting into selling ad space easier.

    This plugin is responsive, includes an ad designer for easy setup, ad rotation, call-to-action ads, PayPal integration, and more. You can also sell ads in a number of ways including by click, duration, or pageviews, view analytics for each, and much more.

    AdPress will set you back $39.

  • Protected Content

    protected-content

    If you’re interested in putting some of your content behind a paywall, our very own Protected Content is where it’s at. This plugin makes it easy to create a membership site that sells access to just about anything. You can protect your content in a number of ways based on certain posts, pages, categories, links, keywords, files, and more. This is a quick way to earn some income from your site.

    The plugin works with all major payment gateways including PayPal, Authorize.net, and Stripe. You can even offer site visitors coupons or free trials. You can also establish any kind of membership system you want from dripped content to freemium to a full pay-to-access everything setup. It also includes a setup wizard, the ability to opt out of features, and more.

    You can get Protected Content for $24.50/month with a WPMU membership or $19/month on its own.

  • Membership Pro

    membership-pro

    Another option from our arsenal of plugins is called Membership Pro. This one makes it super easy to set up paid subscriptions and multi-level membership systems for your unique content.

    It includes paywall protection, drag-and-drop “rules,” a coupon builder, email campaigns, four accepted payment gateways, and more. This plugin can even be paired with multisite to create a network subscription and BuddyPress to create a paid social network. So it would obviously work well for a simple content portal, too.

    You can get Membership Pro for $24.50/month with a WPMU membership or $19/month on its own.

  • Easy Plugin for AdSense

    easy-plugin-for-adsense

    Easy Plugin for AdSense is a convenient way to add and manage AdSense on your WordPress site with minimal fuss. It follows all the official Google AdSense rules too, which is important if you’re serious about earning revenue from this method for the long haul. It comes with several sidebar widgets, numerous options, control over positioning of the AdSense blocks, and an easy-to-use interface.

    A pro version of this plugin is available as well that includes several other features including a safe content filter, an IP filter, shortcode support, control over what posts, pages, and categories ads appear on, mobile support, the ability to suspend ads, and more.

    The pro version of Easy Plugin for AdSense costs $7.95.

  • Easy Digital Downloads

    easy-digital-downloads

    Should you decide to put together an ebook and try to make some semi-passive money off of selling copies of it, Easy Digital Downloads is a good choice for managing everything. This plugin is a full e-commerce solution for selling digital products on your website.

    It comes with a cart system, promotional code support, multiple payment gateway support, a user purchase history, product bundles, variable pricing, customizable receipts, earnings charts, and more. There are a lot of features here so it’s definitely not passive but once your site is all set up, Easy Digital Downloads offers a convenient way to sell your digital products without much hassle or upkeep.

  • CoursePress

    coursepress

    Thinking of going the online course route? Then you might want to check out CoursePress. This plugin is easy to set up and allows you to create a full online course that site visitors can sign up for, complete assignments, take quizzes, and more. You have the option to create text, audio, or video-based courses, integrate discussion boards, and even offer video previews to entice potential students.

    On the admin side, you can tackle everything like grading and reporting and it includes theme and shortcode support. If you require more features, CoursePress Pro is the way to go. It allows you to create an unlimited number of courses, supports 12 payment gateways, and includes all sorts of bonuses like course teasers, automated and manual assessments, free courses, media integration, live chat, and more.

    Just like our other plugins in this list, CoursePress Pro costs $24.50/month with a membership to WPMU and $19/month by itself.

  • LearnDash

    learndash

    Another way to add a course to your WordPress site is LearnDash. This full-fledged learning management system (LMS) offers tons of features for setting up any kind of online class you can imagine. Create certificates of completion for your students or run your class based on a point system. Offer multi-tier courses complete with topics, quizzes, and more. Leave comments on and approve submitted assignments. too.

    You can also establish course prerequisites, drip feed content, create advanced quizzes with seven question types, send custom messages, setup dynamic forms, and offer user profiles. Also included are lesson timers, user progress reports, multisite compatibility, media integration, user groups, email notifications, support, and more.

    LearnDash is a bit more of an investment and ranges in price from $99 to $129.

  • Sensei

    sensei

    The last plugin I’m going to talk about here today is Sensei from WooThemes. This plugin offers another way to create courses, take on new students, and offer assessments within the WordPress dashboard. Though you can use it as a full LMS, it’s also useful for setting up a course and then walking away. Automatic assessments make it totally possible to accomplish this.

    Some features include easy user registration, WooCommerce integration, access to Sensei themes, course analytics, a question bank, quiz grading, and more.

    Plus there are many extensions available for Sensei that add on more features like Sensei Content Drip and Sensei BadgeOS.

    Sensei is a bit of an investment, however, and ranges in price from $129 to$279.

Wrapping Up

The whole concept of passive income is kind of a load of hooey. Low maintenance income? Sure. I can get on board with that. But truly passive? Not so much. And I think promoting these kinds of online marketing businesses as anything different than your standard Internet-based companies is being a little bit dishonest to those who are hungry to make a better life for themselves.

It’s a much better idea to admit work is involved to get these sites and income streams up and running, don’t you think?

Have you dipped your toes into the passive income waters? How much work did you have to put in? How much do you still have to do to keep it afloat? I’d love to hear your thoughts on the subject in the comments below. 

Image source: Caleb Roenigk, Ken Teegardin, Flickr.

10 Responses

    amused

    EXCELLENT post !!
    maybe you should quickly edit out “Membership Pro” and replace it with “Protected Content” instead as the intention is to have the former replaced with the latter.
    at least this is my understanding as this is how it has been described many times in the forums.

    Saru Tole

    Having built several low-maintenance affiliate review sites myself, I agree wholeheartedly with what is being said above.

    I would like to add, that one of the main reasons why you cannot leave your web properties unattended, is Google. Even for popular content, with time Google sends fewer and fewer visitors your way, if you stop pruning and updating it. There hardly is such a thing as “evergreen content” any more. If you do not update your existing content, you have to keep adding some new content, preferably — every day. That’s where the content-creation plugins with some automatic pre-scheduling capability come in very handy.

    I have also to note one other aspect of site-building, which is a big bore: generally you have to spend inordinate amounts of time staring at the Dashboard (the administrative side of your site), filling-in countless forms, ticking all the right checkboxes, etc. At least for me, this stifles my creative drive more than anything. As a curator of a magazine-style review site, you want to spend more time finding awesome stuff to share with your readers, not grinding through the endless data-entry panels.

    That’s why I have invested to create a WP plugin, which gives a dead-simple way to create detailed Amazon product reviews for my blog RIGHT from Amazon product page: I find a product I like, I click a button, and … voilà — a draft post with a new product review is scheduled for publishing on my site. I can jump in to the administrative side to add some personal note, or I can move to the next product which piques my interest. Its akin to Facebook “like”, but instead of posting to my FB wall, I effortlesly get new content for my blog. Neat, huh?

    Jos

    First, great post Brenda!

    @Saru: this seems a great plugin. But what about duplicate content if reviews are taken over? And do you need to add product by product or can you import a range of products?

      Saru Tole

      Hi Jos, thanks for asking. First and foremost, I wanted a simple tool for easy content curation, that would enable the most streamlined workflow possible.

      As we know, Amazon has invested (and still is investing) heavily in the navigation / recommendation functionality of their shopping platform: there is not only Advanced search and faceted filtering, but also features like “Frequently bought together”, “Customers Who Bought This Item Also Bought”, “What Other Items Do Customers Buy After Viewing This Item?”, categories/tags, new releases, best sellers, various public wishlists, registries…

      Some of these lists are available via the official Product Advertising API, but many of them are not. Being able to use any of the features listed above (and some more) to find and review a product that precisely matches the focus of your particular niche site, seems like a surefire way to build an interesting review site and to grow your following. That’s why it seems natural, that a true curation plugin should work on an item-by-item basis.

      The plugins that do bulk-import are on the market for long time now, but their utility is limited, because the end result usually looks like a cookie-cutter site and/or a spam blog — as we know, both of these categories get a negative amount of love from Google nowadays.

      On a more technical note — reviews do not get duplicated — when a review for a current product already exists, it gets opened for editing (i.e. the bookmarklet informs you of that situation). Then you can proceed to remotely edit the title for that post, you can change its status from Draft to Published, and you can Trash the post (only if it is not published yet). So, shooting yourself in the foot is actively prevented. But you can try all this yourself — the plugin is free and readily available on the official WordPress Plugin Directory. I invite you to continue this talk in the Support forum. Any and all feedback would be highly appreciated. ;)

    Patty J. Ayers

    The thing is, when you have a successful website which brings in thousands of dollars a month with only occasional minimal work on your part, it’s hard to be convinced that it’s a waste of time. :-)

    tinu_abayomi_paul

    I too, would dispute “waste of time”, especially if you know how to delegate yourself out of having to do the maintenance. I was expecting to read this article and find out that there was a better way to build them or an expose on the business model, rather than the semantics of how they’re being sold.

    Which counts, don’t get me wrong. I’m just saying the title set my expectations up a certain way.

    But I hate the very idea of how the “kick back and do nothing” business opportunity is sold. *Residual* income and *Passive* income are not the same, so I agree with you there. I’d love to see a series that goes more in-depth into what kind of work each type of digital business needs, a kind of fantasy vs reality thing. (Mostly so I could have something to send to people when they ask me, as I’m not in business.)

    boonesimpson

    In regards to the amazon affiliate links, note the FTC has very recently updated a number of rules around affiliate links (basically the fact it is an affiliate link HAS to be labeled as such in close proximity to the link, not at the bottom of the post, and not buried in a user agreement).

    Apparently too many big blog networks were obfuscating their affiliate links to the FTC updated the rules.

    Randy

    HI Brenda. Excellent article! I agree 100%! I’ve done a ton of research on passive income over the years. I’ve always thought of it like a get rich quick scheme while not doing any work. I’ve come to the conclusion that you can make low maintenance money online, but it will take some work and it probably won’t be your primary source of income.

    I make low maintenance money in two different ways:

    I run Bible Buying Guide where I review Bibles. I have affiliate links and an Amazon search box on my site so I get a portion of the sale. I spend several hours per week writing reviews, answering questions, site promotion, site maintenance, etc.

    I also have books on Kindle. I don’t spend much much time with promoting them and they’re far more passive than my website is, but I still have to promote them and answer questions, so it’s not really passive.

    I see “passive” income as not directly trading your time for money. You can spend 40 hours of work and sale to 1 person or 1000 people, but it’s not reliable and it’s unpredictable. You’re still working. Trading your time for money, getting paid $x for x hours of work, is for more reliable and gives you more stability.

    Either way, you have to work for it.