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The Passive Income Mistake

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The Passive Income Mistake

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Every artist knows the struggle to ‘build a passive income’. We can’t have hobbies because they inevitably become our passions and our passions become our businesses. It’s a real problem.

It also doesn’t work.

Not only do we not get any downtime from our creative jobs, but we also effectively take on multiple side-jobs that pay us little to nothing. We burn out on the thing we loved doing because it’s not providing us with that fabled ‘passive income’.

But I’m an artist, right? I should ALWAYS be trying to improve my art through my hobbies and only have creative side-jobs right? And if I were any good, people should want to pay for my efforts, shouldn’t they? More than one job equals more than one income, and it’s what I’m passionate about, so it’s not like it’s WORK, right?

Stop. Let’s just stop and think this through.

First of all. Your side hustle is not passive income because a side-hustle is active.

Second of all. Your hobby is a crap side hustle. There, I said it.

Related: Side hustle ideas

Your business is not your hobby and your hobby is not a business

Before you burn the heretic, let me say this: THERE IS NO HOBBY I’ve ever had that I have not tried to monetise. Painting, wirework, mosaic, cooking, comics, animation, writing, crochet – basically any handwork or craft or creative pursuit I’ve had since I was in high-school. I felt CONVINCED there was some entrepreneurial trick I was missing to turning these hobbies into profitable businesses, and would eventually flip that switch when I found the right thing.

Ultimately, I think I never felt fully comfortable pursuing art for art’s sake. I was always trying to legitimise it by making it productive and profitable.

Since I started freelancing, it only got worse, with all the misguided hooplah about needing to monetise absolutely every waking moment of your day. I’ve done commissions for friends and family. Had a Patreon account. Tried selling artwork online. For the last five years, I’ve sold comics I’ve made at festivals – which was easily the most success I’ve had at a side-business. After a good festival, I can sometimes pay my rent that month.

My conclusion is that money ruins your hobby, and there’s not enough money on offer to make it worth the sacrifice.

It’s not because Money is the inveterate enemy of Art or because your hobby is too silly to make money from. Nothing is too silly to make money from, not in this day and age.

The reason your hobby is not your business is this: your hobby and your business accomplish two entirely different things in your life. Hobbies, unless they are properly revamped as businesses, with a plan, capital, marketing, a production-line and customer base, are totally inadequate to the task of making enough money for you to live on.

Trying to force it to be otherwise has made many artists absolutely miserable because they’re trying to solve a real problem (no money) with an inappropriate solution (monetising stuff they make and do for fun).

To monetise anything you have to treat it in a businesslike manner. You no longer get to do what you want to do. In your career, you’re not only having fun; you’re collaborating, executing, optimising, serving and being accountable to others. It’s not for fun and it’s not casual any longer.

Related: Additional income sources to supplement your fulltime job

Is it a hobby, a side-hustle, a career or a passive income?

Am I saying art is not a viable career? Or that you can never have a job you don’t hate?

No.

I’m trying to sketch out the difference between your hobby, your side-hustle and your career and a passive income.

Hobby – the thing you do for fun and relaxation, or to meet new people and explore different interests. Hobbies make you a happier and more well-rounded person and can get you out of your comfort zone. They’re a mental health aid and a safe space to try new things.

Side-hustle – manageable part-time work, not necessarily related to anything you do for a career, that you’re doing mostly for the extra paycheck. Low personal investment, but still generally trading effort and time for money.

Career – your main pursuit. Perhaps something very core to your identity. Maybe you think of it as your main hustle or as your vocation – something you MUST do, secondary to the money you earn doing it.

Passive income – money you earn because you’ve set up systems to earn it for you. Minimal input and active management required.

Separating these out can help us see where we’ve got our wires crossed. It’s not that you can’t do all of these and pursue your passions – I’m just saying you need to modify your expectations and approach for these categories to avoid unnecessary pain and disillusion. You approach a hobby very differently to how you would a job or a side-hustle.

The problem is, we end up blending these categories into each other and getting frustrated that they’re not producing the results we hoped for. We’re told as artists to never do anything that isn’t our passion, and to demand that everything we do excites us the way our passion would. That’s not very realistic, or sustainable, and we feel like failures when the hobby we turned into a job starts feeling like work.

So how do I make a passive income, like, today?

So if passive income by definition isn’t money you make by the sweat of your own brow, how in the world do people make passive income? By putting the money they already have to work.

Passive income will look a little different for everybody, and it depends on what you have stomach for. Some people want to build businesses, some want to get into the property market. Some want to write a series of successful novels and sell the movie rights. BUT these all require a pretty massive outlay of effort and cash and time on the front-end before the benefits can be enjoyed. They can become passive incomes, and pay you enormously well, eventually.

So what’s an easy, immediate way to start passively making money? Well, I know of only one.

Start investing.

I’ll talk about the other streams of passive income in another post, but, for now, investing is by far the simplest and most effortless way to generate a passive income. Investing your money literally makes money for you while you sleep, which is the whole point of passive income. Most importantly, you’re making money by KEEPING money – not by taking the risk of getting into tons of debt or putting up capital and getting waaaaay out of your depth if it all goes wrong.

Related: Simplicity and Index Investing

You earn money by saving a little and buying an index tracker every month, bit by bit. The dividends are small (at first) but start almost immediately. Reinvested, they grow over time until your investment returns get to the point where they can eventually replace some or all of your salary.

Get started here with this excellent how-to post by Stealthy Wealth.

As a passive income stream, it beats the hell out of Patreon, let me tell you.

Article reposted with permission from Drawing Money. Original post here.



PLUS, we'll send you our Zonotho Personal Finance Starter pack to help you take your financial prowess to the next level!


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Kay Carmichael

I’ve been a freelance artist in the film and animation industry since 2012 and I’m still alive! I am not a financial advisor nor am I legally enabled to give you financial advice. I’m a storyboard artist and a writer who’s made a lot of mistakes with money and consider myself well-read on the subject because I had to teach myself. The content on my blog is for educational purposes only and is my own experience and opinion and research.

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