Pat Flynn’s “Passive Income” Is Amazing, But Not Passive!

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passive incomeLet me be very clear with you… Pat Flynn is a stud.  If you aren’t familiar with Pat, you should be.  He runs a website called Smart Passive Income, which talks about how he makes money, the lifestyle he promotes, and tips and tricks for his readers and listeners of his podcast.  Again, he is extremely successful, and has the income reports to prove it.

However, I feel that the name of his website “Smart Passive Income” may be a bit deceiving to his audience.  Pat works ridiculously hard, and while he is making a ton of money, very little of it is passive.  As a matter of fact, over the past 3 years I bet he has worked harder than anyone reading this post.  He not only has his blog, which he is pretty active on with really lengthy posts and interviews… he also has a podcast with 68+ episodes which are each about an hour in length (not to mention editing and prep time).  He has written at least 2 books that we know about, built multiple apps, and has had multiple speaking engagements.  This all helps him bring in lots of money, but that is not the definition of passive.

Is Pat’s Income Passive?

Well, the answer is yes and no.  If you look at the majority of his income, it is coming from affiliate income, primarily from one hosting company… about 2/3 of his income typically.  About 90% of his overall income is coming from affiliate income to be honest… which in reality can be considered a passive income stream.  However, this all comes from the hard work he puts into his blog, and people that are hoping to learn the secrets of building passive income streams like Pat.  So what is Pat demonstrating exactly?  Pat has laid out a blueprint for making money, lots of money!  Unfortunately, the process to make this money requires you to work extremely hard!  Pat’s tagline is working hard now so you can reap the benefits later.  A good one, because that is hopefully what he is doing.  Pat is not being passive though, and the income he is generating right now is not passive because he works really hard to bring it in.  If, and it is a big if… Pat decided to quit today or in the near future… you would have to wonder how much of that “passive income” would be recurring after 6 months, or a year of no activity from Pat.

Lets Dig Deeper Into Why His Passive Income Streams Might Not Work.

As you may or may not know, Pat gets a ton of his traffic from the search engines and from his podcast.  Both require frequent updates to get significant traffic.  If Pat were to quit today… that would mean that google and apple wouldn’t get the updates they like, and perhaps would lower his ranking positions for search terms in both google and itunes.  If this happens, he gets less traffic to his blog about making passive income, which again, is where all his passive income is coming from. Unfortunately, once the plunge begins, it continues and continues to spiral down.  The good thing for Pat is, he has a lot of excellent content and what seems to be ridiculously loyal readers… so his traffic might not disappear.

My point is, don’t be misguided by the concept of “Passive Income”.  I like to say that there is a difference between “automated income” and “passive income”.  Passive income is a myth in my eyes, as it wont happen for most of you/us.  Automated income can be generated by putting together systems to make sure that your traffic supply never runs out and that way your monetization method always has a supply of new prospects.  Passive income comes from a set it and forget it system… which barely ever happens outside of the stock market and real estate.

Why Pat’s System Won’t Work For You

I’m not trying to say you can’t learn from Pat.  You can, you can learn a ton.  I have learned plenty from him.  If you only learn from his work effort, you will most likely improve your chances for success.  But I need to point out once again, that most of his money comes from his blog, not from his actual “Passive Income” activities.  If he didn’t have his blog bringing in all that money, he wouldn’t be as successful.  He would still be making good money, and many people would love to emulate that kind of success and income, I just don’t think most of his readers realize that Pat has been extremely lucky and his “passive” efforts are mostly benefited by the readers of his blog.  For instance, Pat’s “niche site duel” website project was able to be successful partly because so many people visited it and linked to it.  For the average Joe/Jane, you wouldn’t get this benefit when building your niche website and thus wouldn’t stand a chance of following his system and getting the same results.

So What Now?

Pat may try to change all that.  With his Niche Site Duel 2.0, Pat is promising that he has systems in place to make sure that his blog and brand traffic can’t assist his new niche site project.  This may be the best test yet of Pat’s ability to actually make passive income.  I personally can’t wait to see the results.  I will be rooting for him to succeed!

Please, please, please, don’t think for a second that I am trying to belittle what Pat has accomplished, or tell you he isn’t awesome in any way, or that he is intentionally trying to mislead people.  Pat is a great guy, who from the beginning (I have been following him for years) has only been trying to help people and show them the most efficient and effective ways that he knows of to make more money.  That said, just be careful when trying to follow in his footsteps… he is wearing a completely different set of shoes and yours won’t fit the same way in the tracks he is leaving.

Please follow his NSD 2.0, it should be good.   I am also planning on launching a new niche website which I am sharing with this Niche Site community on Google+, so you can follow along on a few different public niche site case studies there too.

What do you think of Pat?  Leave a comment on whether you agree or disagree below.

PS- I apologize for the delay in podcast updates.  I did an Interview with Spencer Haws of NichePursuits.com and somehow the recording of the interview turned into a pumpkin on me.  I am waiting on Spencer to re-record his answers and will get that up soon.  New podcast is here now with an added bonus just for podcast listeners.

Show Notes:

 

Pat Flynn's "Passive Income" Is Amazing, But Not Passive! by
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About Adam Roseland

Adam Roseland is a blogger, podcaster and entrepreneur who also owns a digital marketing firm called 814 Interactive. Adam has been working in the advertising industry for the past 15+ years primarily in the digital space for advertising agencies, has built hundreds of niche sites.

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Comments

  1. Looking forward to the Niche Site Duel 2.0 and if/how not only Pat succeeds, but how you and others will do as well. The search engine landscape has changed dramatically since NIche Site Duel 1.0. Exciting sutff!

    • Thanks for the comment Jason.

      I agree, the landscape has changed immensely since NSD 1.0, and I expect it will be that much harder to rank well. That said, it should be a lot of fun watching things roll out.

  2. I actually respectfully disagree on your stance about whether or not Pat’s income is passive. I do believe that most of the income he earns now is passive. Much of it is created by work he has done in the past – he doesn’t directly trade time for money like most of us do at our day jobs. To me, this type of income is defined as passive.

    Your point about his income dwindling away if he were to quit is certainly valid. But nobody ever said that passive income has to be defined as sustainable.

    Great discussion here. Thanks for sharing your thoughts.

    Btw – I’m in on NSD 2.0 as well. It’s going to be very interesting and fun. Good luck with your site.

    • Matt,
      First off, thanks for your comments. No need to “respectfully” do anything here, your disagreement is valid and appreciated.
      It is my opinion that all the affiliate income is generated based on the traffic he generates… which isn’t passive.

      For instance, as a sales guy, if I work really hard, make a ton of phone calls to prospects, pitch a ton of deals, and then 3 months later, the client says yes… that isn’t necessarily passive. The time I traded is in the past, while the rewards are just paying off later. That is a sales cycle, and Pat uses the same with traffic generation turning into affiliate sales.

      Again, that is just “my” opinion. I don’t think there is a right or wrong.

      Im looking forward to NSD 2.0 as well.

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