Does passive income really exist?
Today I watched a video on YouTube by Ali Abdaal (1.51M subscribers) where he showed his profit per week day by day. Ali calls some of the records a passive income, but is it really a passive income?
He was a doctor and earned 170$ per day. Ad from YouTube views brought him 200$-300$ per day, views of his SkillShare classes gave him 200$, referral links to SkillShare 10–20$, Amazon referral links 10$ (books and pens he offers are too cheap, he says). He also has some classes for medical students — crush course costs around 150$ and he sells that from time to time. He has a free to subscribe newsletter where he shares thoughts and links. Prices for integration adds in the video is undisclosed. For 12M subscribers profile integration costs $10K-$100K. He has 1.5M subscribers, we may assume it’s extra $1K-$10K per video.
So his “passive” income is much larger then his profit from working as a doctor all day. It is important to know that doctors in UK are payed much less than in US.
He films YouTube video every week and doesn’t spend time on SkillShare (people buy pre-recorded courses, he only answers to the comments from time to time).
His profit from SkillShare is quite large, but I suspect it is mostly driven by YouTube users. By using his name he implicitly does integration of his SkillShare courses. Even if they are not outstanding (I didn’t watch them), he’s famous enough to convince people without words to trust that his course is worth buying. Creating a course when you have a large audience is such a clever decision.
If that is true, YouTube ad and SkillShare profit are connected. If he loses popularity on YouTube most likely his profit from SkillShare will also drop.
New videos are essential for keeping channel alive. Not only because new videos get large portion of total views, but YouTube recommendation keeps remembering about him. Also views of old videos are driven by views of new videos.
That makes me believe that money beyond his doctor’s salary are a pay for posting at least one video per week during many years in a row. So it was long, hard and unpredictable path from 0$ to 500$.
How hard to film a video? It may be not that hard, but if you watch his actual videos you may see that there are some not displayed activities that actually were part of the video.
Make a good negotiation with add advertisers takes time. You get plenty inquiries and you need to choose only good ones: don’t get fooled, or accidentally advertise a scam or other inappropriate stuff.
Your time spending is driven by a need to film a video. You need to have an “interesting” life so that you have something to film about. It may be OK, but sometimes it feels like a work. Let’s say you decided to learn playing on a guitar so that you can tell a story about “how I’m learning to play on a guitar”. You cannot give up — it will hurt your image, or switch activity — you won’t meet your video posting deadline. You are obliged to follow your commitments, as you often do at work.
You read books you won’t read otherwise, just to post a video about this recently published book you’ve read. Such videos bring you new audience and is good for your earnings from ads.
It influences other regular activities of your life. You go to a café, and instead of enjoying the time, you spend “few minutes” to record a clip to use it later, maybe do several attempts. It can hurt your social interactions, people who surround you can get annoyed. You may suffer personally as well, maybe you order “instagramable” food instead of one you would order if not for your “passive income”.
Time spent on editing is obvious example. You get better at it with time, do it quicker, still it’s unlikely you spent less than several times of a duration of the video on its editing and posting.
YouTube is hard, you cannot just follow your gut and passion to stay at the level you are, you must follow trends and news, reflect it in video editing and content itself. You must become an expert in search optimization and, what is more time consuming, never stop analysing data and take actions in a timely manner. Way you name the video, what you put into description, hashtags, thumbnails, topics and categories — all this is crucial to success and needs constant attention.
Does Ali have passive income? I don’t think so. He managed to get a high profit secondary job of a content creator. High profit comes not from uniqueness of the content he produces which is inspiring and attractive. High profit comes from consistency and good decision making on the way, which is hard and not all are capable of doing. Total amount of time spent on building his brand and audience by writing, filming and editing could be no less than his time spend in the university building or in the hospital. There are so many time consuming elements in posting a video that stay behind the scene.
Anyway, it looks fair to me he earns that much right now. He is a smart guy and I wish him good luck in the future.
And talking about myself, I continue my search for a personal and real passive income. If you are interested how it will go, click follow. Thanks for reading!
