The “Passive Income” Myth

A few years ago, a client in their twenties told me excitedly: “I’m going to buy a rental property, and then I won’t really ever have to work—just collect checks and continue to buy more rental properties.”

That dream is alluring, especially in a culture saturated with quotes like “make money while you sleep” or “build streams of passive income.” Many young people are being told that wealth can be built effortlessly, as if you just set up a second venture, go to the beach, and let the money flow in.

But here’s the truth: too often, those narratives mask the hard work, risk, and management behind the scenes. In practice, there’s almost no truly “passive income.” Every income stream requires time, energy, oversight, decision‑making—and, often, sacrifices.

Why the “Passive Income” Promise Is So Seductive

It’s easy to get lured in by the promise of easy money. It appeals to the desire for freedom and self-ownership: instead of punching in the clock for somebody else, you can “beat the system” with “one simple trick.” It markets hope, promising that you just need to do something once to reap the rewards forever.

And, of course, it fits well in a social media soundbite. “Set it and forget it” sounds enticing in a short video. “Side hustle empire” makes a great hashtag. But that doesn’t mean it’s a good business plan. By marketing hope and excitement, many creators and influencers fail to emphasize the tough parts: the sweat equity, time commitment, hidden costs, and risk of failure.

So let’s look at a few popular passive income myths and the more complicated realities behind them.

Myth #1: “Once set up, income just flows forever”

Almost every “passive” venture will require ongoing maintenance, attention, and adaptation.

Rental properties

You may need to find and vet tenants, fix broken appliances, maintain the property, manage vacancies, market it, deal with evictions, track rent collection, pay taxes, handle insurance, etc. That’s business ownership, even if the business is in real estate.

Stock investing and trading

True passive investing is a long-term strategy requiring patience and discipline. It typically yields modest returns and takes time to build. But many people trying to chase “passive income from stocks” are actually trying active trading, dividend strategies, or market timing—all of which require research, monitoring, emotional control, and risk management.

Digital products and info products

Even after launch, you often need to update content, handle customer questions, manage refunds, market with fresh campaigns, track analytics, and guard intellectual property. There’s also the time investment involved in designing the initial product and marketing it to buyers.

Royalties (books, music, etc.)

Income might decline over time. You still have to market, promote, negotiate, sometimes reissue, and protect your rights. And, again, creating the book or art in the first place takes time and effort with no guarantee of commercial success.

So the idea that you can “set it and forget it” for years without doing anything else is rarely true, no matter what venture you’re considering.

Myth #2: “Passive income = working smarter, not harder”

Passive income is often pitched as a loophole or a way to “outsmart” the system. But being smart and efficient doesn’t mean avoiding all effort. If you’re looking at a new venture as a chance to be lazy and avoid being a productive member of society, you’re setting yourself up for failure as soon as a challenge appears.

Instead, what if you reframe the conversation? “I want to build a business, or be a landlord, or be an investor—not because it’s easy, but because I’m willing to steward resources well, grow something, and accept the responsibilities.”

That mindset makes a profound difference. Approaching it this way, you’ll plan realistically, anticipate challenges, and treat your work as a calling or mission—not just a shortcut.

Myth #3: “Passive income will replace your job quickly”

Starting any business—including a side venture—takes time. Any start-up takes a while to build consistent cash flow, much less at a level needed to sustain a lifestyle.

Many people believe that a side venture can replace their full-time job income within a few months or a year. That’s rarely feasible. You’ll often need to put more into a new business than you make at first, and it takes time for growth to ramp up. There are also usually down periods when you bring in less money; until you’ve built up reserves to stay in business during these lean periods, you’ll be in trouble relying on the venture for your sole income.

Putting all of your financial eggs in a get-rich-quit basket sets you up for problems down the line. What happens to your housing situation if you have no income this month? What will you do for insurance when you quit your main job? Do you have an emergency fund set aside that’s separate from your business investment?

A more sustainable approach is treating these ventures as supplemental income or growth opportunities while your core income and financial base remain strong.

Let’s Ground This in Biblical Stewardship

As followers of Christ, we believe our time, talents, and resources are gifts entrusted to us. Here are a few principles to guide how we think about “income streams”:

1. Diligence over laziness
   Proverbs 10:4: “Lazy hands make for poverty, but diligent hands bring wealth.”
   Any enterprise—whether your job or side venture—requires faithful effort.
2. Wise stewardship over get‑rich quick schemes
   Luke 14:28–30 reminds us of counting the cost. If we pursue ventures without assessing risk, time, and demands, we may end up regretful.
3. Working heartily as for the Lord
   Colossians 3:23 says, “Whatever you do, work heartily, as for the Lord and not for men.” Even in our side hustles, our posture should be diligence, integrity, and humility as we are accountable to God for the work we do.

There’s nothing wrong with picking up a side hustle or income venture. But using these guideposts of biblical wisdom can help shape your approach, guarding against illusion and keeping you on a more grounded path.

If you have questions about an investment or new venture, a biblical financial advisor can help. Reach out to our team at John Moore Associates with questions. And if there’s a young person in your life or someone who needs a dose of financial wisdom, be sure to forward this post to them as well.