The Edge on Passive Income: Success Physics

There are a lot of articles out there on how to build passive incomes. These articles seem to bounce between two extremes:

1. Passive incomes are easy to build and anyone can do it in a short period of time with little or no work.
2. Passive incomes are a lie told by Internet Guru’s selling magic beans and snake-oil.

The truth usually lies somewhere between the extremes. 

I’ve worked most of my life as a wage earner and contractor. Over the last few years I’ve been trying to build some passive income streams by writing and publishing eBooks and various eCommerce strategies. I’ve had varied success. So far, I can only report that it is a slow process and, unless you are already rich, it takes hard work, passion and dedication.  

In 2013 I published a short eBook titled “7 Simple Success Principles”. The 6^th principle is “Success Physics”. I have found this principle to be particularly useful in developing Passive Incomes so I adapted this article from the eBook

The laws of physics apply to our efforts to build passive income as they do to everything else in the universe. If we understand these basic principles and apply them to our professional and personal lives we cease fighting the universe and start working with it. I’ve taken five basic principles of physics and adapted them to building passive income streams

INERTIA

Inertia is a physics term that describes movement and matter. It is well defined by Sir Isaac Newton’s two laws of physics.

     1. That which is at rest tends to stay at rest

     2. That which is in motion tends to stay in motion.

When we start a new business or project it is at rest and it wants to stay at rest. We are going to expend more energy in the beginning than once it is in motion. This is why most businesses fail in the first two to five years – they cannot overcome the forces of inertia.  If we are going to be successful we have to be prepared to work hard and be persistent until we are able to set our project in motion. If we let up before momentum takes over it will return to its natural state - rest.

When a project is in motion it tends to stay in motion. This is good news if we have done thorough planning and preparation. If we have flaws in our planning, however, inertia can work against us. It will want to stay in motion even if it is in the wrong direction. The good news is changing direction is much less energy than starting from a state of rest. Getting our projects moving is the hardest and most important element of success. The more diligent we are in our planning and preparation the less energy we are going to have to expend in implementation and administration.

We have a finite amount of physical, emotional and financial resources. We cannot afford to waste them. When we use the principle of inertia to work for us, we conserve energy and become more effective. Before we make the decision to put the energy into moving a project from a state of rest to a state of motion we think long and hard, exploring all the options. We remember that “failing to plan s planning fail”. When we do commit the energy we understand the investment we have in motion. We are sure that when we set a project in motion we include strategies to keep it from returning to a resting state. Every project we set in motion has value and we must always be looking for opportunities to build from it.

MOMENTUM

Inertia is the tendency of matter to remain in the state of rest or motion. Momentum is the “quality of motion”. In other words, the harder something is to stop moving the greater the quality of motion, or momentum. This is another useful term for success. Once we have set our project in motion and have inertia working for us our objective is to maintain motion. We achieve this by creating a high quality of motion in our projects. 

We bring as many elements as we can into our project that will support and increase momentum. We want to create enough momentum that the project sustains movement independently or “passively”. It becomes self-sustaining. If it is a business that generates income we build passive income or revenue that continues to self generate under it’s own power after an initial investment of time and / or capital.

FRICTION

Friction is the resistance between objects. It impedes momentum. We want to reduce friction wherever possible. Frictions can be caused by: access to capital, decision-making support, external market conditions, customer behaviour and any other element that makes reaching our goals more difficult. The S.W.O.T. analysis is a good way to identify and mitigate or reduce frictions.

By reducing frictions we increase momentum. With better quality of motion we realize our goal of self-sufficiency and project sustainability that much quicker, spending less energy on building our passive incomes. We reduce friction with strategies such as: creating partnerships, loyal customers, team building, delegating tasks, decision-making, and increasing product visibility.

CRITICAL MASS & TIPPING POINT

Inertia, momentum and friction deal with quality of movement. The higher the quality of the movement, the more efficient our projects become and the more we are able to build passive income streams. Critical Mass and Tipping Point deal with quantity of users, groups, or consumers. Critical Mass is the amount of users / participants required to create initial project viability and ongoing project sustainability. The tipping point is the threshold at which sustainability occurs. The ultimate goal is the same - to get to a point where the project moves forward under its own momentum so we can enjoy passive incomes and use our energy on the next great project.

For instance, if you are trying to build passive income streams through an online business, or eBusiness, you need to cross a threshold of visitors to support our market.  Until you reach critical mass you will be unable to sustain momentum. You have to support the project by investing energy in the form of capital or time. Understanding the critical mass required to reach project sustainability is a critical component to building your project to the point of sustainability where you can realize passive incomes.

Success Physics helps us identify our goals and develop options as we build passive incomes. Armed with this information we can make informed decisions based on universal principles of inertia, momentum, friction, critical mass and tipping point.

Best, Sam Edge 

Check out my new site The Edge on Strategy