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The Paradox of the Passive Income Pyramid Scheme | by Michael Gordon, JD | The Capital | Feb, 2023

by Index Investing News
February 17, 2023
in Cryptocurrency
Reading Time: 5 mins read
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Everywhere you go, you find promoters of passive income. These wonderful people, who make money doing nothing somehow, feel the need to work still. Their “work” includes telling you how you can also do nothing and make some money “passively.” They occupy their time writing books, blog posts, videos, articles, and sponsoring ads to let you know that you, too, an anonymous person out there, can live for free, with no work. Somehow it just works somehow.

So let’s try to imagine what it would be like to live in a passive income world.

Johnny woke up one morning and decided this is the right time to buy some random cryptocurrency he heard about in his email box. He is promised that this new cryptocurrency will “go to the moon.” He promptly invests and makes a fortune. Without any work at all, he is instantly a millionaire.

With some of his winnings, he buys a camera. He promptly uploads some photos of his cereal, the neighborhood he lives in, and some trees. Within a few hours, his passive income flows in every second of the day. He is making hundreds of thousands of dollars on “passive income.” Why people would spend so much money on such common photos is not something anyone bothers to consider. Don’t photos go down in value over time since people become tired of the same photos over time? Before you laugh, remember how many people bring up stock photos as “passive income.”

Fresh from the crypto and stock photo gains, Johnny then decides to invest in the stock market. He does not know much about stocks, but he heard stocks are “passive” because stocks are large corporations that mint lots of money all the time. So he decided to put millions into Apple and Google. Both magically bring more money, even though they are quite overvalued.

But Johnny got bored. He wanted to make commissions from “affiliate marketing,” because this is what all the passive income promoters talk about all the time. Johnny promptly ordered a website and stuffed it with a bunch of links to books on Amazon and other low-quality products on his website. He didn’t want to write any articles or make the website truly amazing, because that wouldn’t exactly be passive, would it? Yet, without any work, somehow people around the world would stumble upon his website, click the links, and buy all kinds of poorly made junk that they didn’t need and those big checks would come to Johnny. He was amazed at how the world worked. It was so easy.

Since everything Johnny did seemed to rain gold, he decided to try dropshipping. I think you can figure out how that turned out. He looked up some interesting products and found a glow-in-the-dark dog collar. He then created a store on Shopify in 15 minutes, and an hour later, he made his first sale. How can the world be this easy? Within days, he was making tens of thousands of dollars from a store he created in minutes. There was no competition (especially from Amazon) and people didn’t even have any skepticism about buying something that seemed to arrive within six to eight weeks.

Since Johnny has been super successful, he hasn’t decided to rest, despite all the passive income coming in. He has decided to go big and engage in the “hustle community.” What he has decided to do is something that has never been done before. He decided to create a course for $1,5000 explaining the virtues of passive income and all the ways that anyone with a computer can become part of the passive income community. Johnny never gets tired of finding ways to make money, despite all the passive income coming in all the time.

Let me know what you think about this article. Does this explain the passive community well? Let me know in the comments below. Also, be sure to follow me. You will find original content that you won’t find anywhere else. And guess what? I will not be selling you a passive income course, either.



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Tags: CapitalFebGordonIncomeMichaelparadoxPassivePyramidScheme
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