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Is Online Passive Income Really Possible?


Back in January, Derek wrote a great post about how passive income will take time and effort. He discussed some of the pros and cons surrounding dividends, rental income, and profits from a business. As he points out, not all businesses result in passive income and many actually have the opposite results. This also holds true for online ventures which brings us to the question… is it even possible to create a website that generates online passive income?

Here’s my personal opinion…

I have been dabbling in various online businesses since middle school (late 90’s). You name it, I have probably tried it… eBay, network marketing, web design, e-books, affiliate advertising, Adsense, and the list goes on. Some successful, most failures. But the one common trait they all share is that despite being hocked as passive or semi-passive income by some, I have found they are anything but. Sure, there are definitely degrees of passiveness, but there are very few that I’ve had experience with which I would consider passive.

With that said, instead of learning the hard way and having to try out all my past endeavors yourself, I will save you some time and spill the beans right now on what I consider to be the least and most labor intensive business model, based on my personal experiences.

Most Passive – Information site monetized by CPC/CPI ads

These are those content/information sites you see which are rarely updated, yet they present some good information on a given topic. They’re not quite “set it and forget it” but with the right subject matter and approach, they could come pretty darn close.

For example, let’s say the site was about something historical. We’ll use history of the Great Depression as an example. You go and create a killer site all about this topic. You start out with a good exact-match domain like You write well-researched articles about the various aspects, such as the stock market crash, the overuse of credit and buying on margin with low interest rates, and so forth. The site is monetized by Adsense and since this is history you’ve written about, there’s a good chance updates to that content will rarely be required. As you can envision, it’s almost a set it and forget it concept.

Sounds good, right? Well it might be, but there are a couple potential problems to take into account here:

(a)  The most lucrative topics require frequent updates– The Great Depression site may sound like a good idea, but the only problem with it is that I bet the revenue it would bring in wouldn’t be that great. If you want to make money, you often need to be in the high-profit niches like mortgages, credit cards, auto insurance, healthcare, etc. And as it turns out, those usually require frequent updates. It’s not like you can put up a site for credit card deals and reviews, expecting the information to remain up-to-date for years to come.

(b) Content mills have crashed the party– Those junk article sites like Suite 101, eHow, etc. have forced search engines to crack down and heavily scrutinize content sites. Most of them (like the two mentioned) deserve their demotions, but other good and high-quality sites have been like babies thrown out with the bathwater… undeserving victims of the slaughter. In short, this means that even if you create a very high quality informative site about a given topic, there’s definitely no guarantee it will ever rank where the eyeballs are. With all that said, I’m sure there are plenty of ideas out there that still work for this model, but finding the right one will undoubtedly be much harder these days.

Another type of information site that can result in passive income is one that provides a service rather than readable content. For example, I can think of several websites which offer nothing but calculators for things like mortgage interest, loan amortization, credit card debt payoff, etc. If you can create a useful service like that, over time it could become self-sustaining or close to it.

Least Passive – Financial product/service review site monetized by affiliate advertising

If you want passive income, then this is definitely not the approach you want to take. How am I so sure of this? Because I run, which is a site for reviews/deals. And boy let me tell you, all those credit card deals require constant updates. Because they’re financial products (which are heavily regulated) the banks are ultra-strict about having interest rates, reward programs, cardholder benefits, and so forth 100% up-to-date at all times. Worst of all, sometimes there is little to no notice given. You just receive an email saying XYZ credit card needs to be updated… immediately! If you don’t comply, you may risk losing your commissions for that month or even getting booted from that bank’s program altogether.

For example earlier this year I was visiting Yosemite, which unfortunately had no internet access (at least not for Verizon wireless cards). However my phone did still receive emails and I got a message saying “Urgent!” in the title and it was regarding two of my credit card reviews; the Chase Ink benefits had changed and the 5% cash back rewardsfor the Chase Freedom card had been tweaked. I was only going to be there for two days but they wanted the updates immediately, so I had to leave the valley and drive outside the park (about 40 minutes away) to get reception so I could hop online and update my reviews of the Chase Ink and Freedom credit cards that same night. As you can imagine, this little detour had derailed my plans for that evening. Certainly not something a passive business would do, right?

If you don’t want that type of stress and high maintenance with your website, then when it comes to affiliate opportunities your best bet may be to stick with non-financial products/services which still have high payouts like credit cards do. Off the top of my head, industries related to fitness, nutrition, and beauty usually pay good and I doubt you would be required to cut your vacation short if an update was needed.


Some may disagree, but in my personal opinion a truly 100% passive online business does not exist. However as demonstrated in my examples, there are opportunities ranging from 99% passive (like those calculator sites) to 0% passive (my credit card site). So you have plenty of options, depending on how much/little time you want to go into the site after you get it up and running.

This guest post was written by Mike, who is the creator of CreditCardForum.

Money Passive Income


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Agreed – I was without internet all weekend, and I had so much blogging work to be done! I’m definitely not making enough income from it to count as passive at all – I think maybe you can get partial passive income if say, you put 20 hours into a website per week, but earn more than you would working a 40 hour per week job, because you’re getting less for less work.

    • Completely agree!

  2. Wow! I couldn’t imagine being tied to the computer like that. I update my site a few times a month. I want to update more often but I just do it as time permits.

    • A few times a month… sounds like a dream come true, ha!

  3. I agree with you. “passive income” is a misnomer for most online businesses. At best they’re forms of “residual income” but more frequently they’re just another source of “earned income”

    • Yep, we go into it thinking it will be passive when it ends up just being another form of “earned income” (which is still good though, because it’s like having another job but with a flexible schedule)

  4. you are right about sites on the topic of mortgages, credit cards, auto insurance, and health care making the most money for cpc and cpi ads. It does need constant updates but there are ways to automate it if you know what you are doing.

    • I might jump in and try my hand at some of these site topics! Who knows what could happen!? A new dynasty perhaps? 🙂

      • Hey Derek you may want to check out Quinstreet’s platform for insurance, credit cards, etc. I don’t use them myself, but instead of links they only do feeds which are automatically updated… so they could be a good passive route to go for a personal finance site.

  5. Thanks for your take on the subject. None of the coaches I’ve listened to have sent me toward a 100% passive anything. The idea is much like a portfolio. By building your brand of products and services under one central theme, you can market your completed projects for passive income along with your active and residual markets.

    I think you are right in that nothing is 100% but by building within a central theme, your efforts can remain the same while your profits grow.

    • Last sentence hits the nail on the head. It’s about growing profits while trying to maintain the same workload.

  6. I have to agree. In order to reach the point of passive income requires so much work that it cant truly be classified as passive. Nice article.

  7. I have to agree with you. I don’t see how anything online could be totally passive. There are always changes occurring with search algorithms and new competitors cropping up that you always have to work to keep getting traffic.

    • And that’s a good point I guess I didn’t really discuss… with new search changes you will probably always have work to do for maintaining traffic, even if you don’t have to change anything on your site.

  8. That’s a great write up by Mike who is definitely an expert when it comes to runnings internet businesses like his site. I was blown away with by talking to him this weekend about just how much updating he has to do to maintain such a great site. It is definitely NOT passive.

    • Thanks man it was awesome to finally meet you! Wasn’t it nice listening to all those pitches from Ally Bank and the stuff for the best credit card and savings account? (haha off topic so I’ll stop talking).

  9. I agree too. There is nothing online or anywhere in fact that can be truly passive. Anything will take some up keep. I guess the true measure is the level of passiveness. If I only have to invest 30-50% of the time to get 100% of the results in something than I would be very happy.

    • You have the mindset about it!

  10. Mike – Good post and nice to see you on Derek’s blog. 100% passive is rare and to many non existent. Even interest on savings involves accumulating that initial nut/foundation, and then opening up the account, shuffling money to higher interest CDs down the road etc. What these various business models allow us to do is decide for ourselves how much we want to work and on which activities. It allows us the freedom and flexibility to design our business plans so they fit our life plans.

    • Sunil, man it’s too bad you weren’t at the blogger conference b/c I met several other Michiganders there. Anyway, yeah that’s a good point about CDs/capital investments… first you have to come up with the money, which of course, usually requires a boatload of non-passive work!

  11. Content mills suck but they serve a great purpose if they are updated and truthful. I think the key is to find a niche that doesn’t need to be updated often but brings in enough passive income to justify starting it at all.

    • Totally agree. So whether it’s a site about cash back credit card offers or iPhones, both are bad for passive income due to the constant changes those niches involved. However something like gardening tips or antique stamp collecting would require little to no updates and could probably be pretty close to passive.

  12. Mike great post! You hit the nail on the head with your observation that things aren’t quite as people make them seem. Network Marketing is one big ones who play on this misconception. I’ve been recruited by so many people who use “residual or passive” income in their pitch but in reality the top earners work hard for their money.

    @ FSYA, I agree on your point of view concerning content mills

    Mike, is the amount of effort that you put into running the creditcardforum worth it?

  13. This article was great! I also think there’s no such thing as 100% passive income on the internet, but it was great to read more info about semi-passive opportunities.

  14. I truly agree…I think the most passive you get, is probably adsense on a blog. This really only pays off adequately if you have a TON of traffic coming to your blog.

    • Yep. Sometimes the more passive you get, the less income you receive as well. The key is to duplicate it again and again and again until the little bit each month becomes a ton! 🙂

  15. Interesting post! There is probably no such thing as truly “passive” income, but if by passive you mean something that you can build up on the side and stays healthy so long as you water it, then yeah I think we can definitely get there.

    • Yep. I don’t think anything is 100% passive either, but there are definitely businesses you can create and spend very little time maintaining, which gives you an opportunity to duplicate your success through another venture. This is what I’m beginning to do! 🙂

  16. Hi there! Someone in my Myspace group shared this website with us so I came to take a look. I’m definitely loving the information. I’m bookmarking and will be tweeting this to my followers!

  17. Working from home is getting very popular and that’s what makes it hard to find. Because it is highly in demand and honest companies are limited, it is not easy to find a useful site.

    • It can get tough at times, but if you’re patient, making an income online is certainly possible. And, once you learn to make some money online, there will be a ton of new avenues available to you and you can earn as much as you want! They might not all be passive ventures, but they certainly provide a decent income!

  18. I believe their are lots of ways to generate income online the problem theirs a limited amount of time to do it not a lack of opportunities. It just takes lots of time and research to find opportunities.

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