How much upfront work is required to set up a passive income stream?
Setting up a passive income stream does require a significant amount of upfront work—something many people underestimate. It’s not just about finding the right opportunity but also about building and eventually sustaining it. Let me break it down using the principles from my Capture, Develop, Expose framework to give you a clearer picture.
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Capture: This stage involves ideation and research. Whether you’re considering writing a book, creating an online course, or investing in rental property, this is where you capture all possible ideas and gather information. This involves understanding your market, the needs of your potential customers, and assessing your skills or assets. You may spend weeks or even months here depending on the complexity of the passive income stream you’re interested in.
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Develop: In this phase, you’re building your product or system. If you’re creating an online course, this is when you’re scripting, recording, and editing. For investments, this could mean securing the property, making improvements, or setting up the necessary financial structures. The development phase is often where the most significant time and effort are invested. You’re creating something that can run semi-autonomously after its completion. Be prepared for this to take several months, and remember that quality here will impact the sustainability of your income stream.
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Expose: Now it’s time to launch or put your product or investment out into the world. This involves marketing your course, promoting your book, or managing the rental process. Even after launching, you may need to refine your systems based on feedback and initial results. While exposure requires consistent effort, it should not be as intensive as the development phase if you've set up your systems well.
Anecdotally, when I wrote "The Corporate Dropout," there was an enormous upfront effort in writing, editing, and configuring it for various platforms. But once it was published and properly marketed, it started generating income with minimal ongoing attention. Remember, while the setup is admittedly strenuous, the potential for long-term rewards makes the effort worthwhile.
In terms of redefining success during this process, measure progress not just by income, but by the knowledge and resilience you gain. These skills will serve you well in every future endeavor.