Jake Pitre*
A growing cohort of TikTok influencers have begun building platforms by promoting passive income to their followers. Thousands of users regularly share their expertise, tips and advice for how their followers can, theoretically, achieve the same level of passive income without lifting a finger.
One influencer claimed to have tried “about every side hustle that exists” before landing on print-on-demand as the most profitable source of passive income, which she says makes her “six figures as a teenager.”
During the COVID-19 pandemic, interest in passive income surged. The passive income subreddit has nearly half a million members and the #passiveincome hashtag on TikTok has 1.2 million posts and billions of views. In the wake of the pandemic ending, many have lost faith in the labour market, believing it to have reached a point of no return.
Given the current state of the economy and governmental policy, it’s unsurprising that so many are lured by the appeal of passive income. The middle and working classes have seen the same opportunities afforded to their parents and grandparents evaporate, leaving them dreaming of financial stability without the means to achieve it.
Amid unprecedented levels of income inequality, there is a growing recognition among workers of the uncertainty of the labour market and the need to think differently about financial security. But passive income might not be all it’s cracked up to be.
Earning while you sleep
According to a 2022 survey, a significant portion of Gen Z get their financial advice from either TikTok (34%) or YouTube (33%). They see influencers sharing their successes (and very rarely their failures) and are motivated to try their strategies out for themselves.
Various passive income subcultures have emerged, from finance bro hustle gurus to young women peddling money-making credit card schemes to their followers.
Many influencers pushing passive income schemes describe it as a way to “earn while you sleep,” suggesting that once you put in the initial work on a certain generating enterprise, it will essentially make money for you.
As research I conducted with sociologist Karen Gregory has shown, this has been further literalized by livestreamers on platforms like Twitch. These streamers draw in more viewers and attention by livestreaming themselves sleeping, as fans donate money, promote their content and buy emojis or other perks throughout the broadcast.
This signals a desire to be “freed from work,” because “to sleep on stream is to put aside and obscure the preparatory work that goes into it and benefit from the market through complete bodily passivity.” For us, then, these sleep streamers seem to embody the logical endpoint of passive income as the ultimate dream of this moment under digital capitalism.
Always be grinding
The idea of passive income is often glamorized, but the reality is that many of these ventures require significant effort. In many cases, the work that goes into side hustles or alternative income streams is incredibly laborious, from handling the logistics and costs of dropshipping (the purchasing of cheap goods to re-sell them at a profit) to the creation and selling of online courses about making passive income.
Indeed, the understanding of what passive income is has transformed wildly, from what the Internal Revenue Service describes as “activities in which you don’t materially participate” to re-appropriating terms like “leveraged income” to refer to maintaining Airbnb rental properties as being somehow passive.
While many critics have correctly pointed out the false promises that permeate the financial wisdom within these online subcultures, we must carefully consider the cultural and economic forces underwriting this shift.
Some of it is surely good old-fashioned aspirational content and marketing, as journalist Rebecca Jennings wrote in a March 2023 article for Vox. “In short,” she wrote, “it’s the feeling that our primary aim as people is to make our lives as effective and efficient as possible.” In other words, the “always be grinding” mindset.
As a result, the concept of participating in multiple income streams to protect one’s self from financial vulnerability is re-framed as not only strategic but passive. Sure, you can break up your labour into different entrepreneurial paths, but you can also, ideally, start them up and then let them go without much maintenance. Let the money flow.
A new gilded age?
Get-rich-quick schemes are nothing new, and the ones currently being shared by “finfluencers” are typically rife with pitfalls, from a complete lack of regulation or accountability, to blurring lines between regular social media content and advertisements — not to mention the way users are expected to take influencers at their word for how much they make through passive income.
Only 20% of Americans make passive income, and almost entirely via dividends, interest or rental properties (although whether rental properties count as truly passive income is still up for debate).
Canadian numbers are harder to come by, but Finance Canada estimated 83% of taxable passive income was held by individuals in the top 1% income range in 2017.
This makes sense. The classic Wall Street notion of passive income — investing in the right stocks or index funds or owning property and having the rental checks prop up your livelihood — persists.
Nevertheless, in a new gilded age defined and structured by wealth that is passively inherited or transferred and rarely distributed, the rest of us can’t help but take notice of a platform economy waiting to be exploited — and why not?
The belief that one’s self worth is their net worth turns us all into enterprising would-be success stories, grabbing at a way to monetize what we can, while we can. For many, this means racing to seize opportunities before they vanish.
*Jake Pitre, PhD Candidate in Film & Moving Image Studies, Concordia University.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
20 Comments
So very sad that many (if not most) young people are being brainwashed into aspiring to a 'money for nothing' life.
I suppose every time we buy a Lotto ticket we are guilty of this, but we still turn up to work every Monday :-) and when we don't hit the jackpot we don't think we have failed in some way.
No one could ever have imagined the societal cost of such rampant use of new technologies by our children. And in many ways, if they have parents that slog their heart out daily to put food on the table - there will be a notion by many children that their parents are 'mugs'.
We have failed to understand parasitism (amongst other things....:)
Most of us in the First World, are parasitic. We play mumbo-jumbo then expect to buy houses, cars, travel.
Cohen nailed it: the homicidal bitchin'
that goes down in every kitchen
to determine who will serve
and who will eat...
If there are too many parasites, the system collapses.
Seems weird to focus on the technology Kate - as pointed out in the article, get rich quick schemes weren't invented by tiktok.
The problem is that young people are increasingly growing up in a world where they see an inverse relationship between hard work and wealth - because that is what our messed up economy has created. Why would anyone want to be on the "work" side of that relationship? And let's face it, you can't work your way out of work any more - honest jobs don't earn enough to break into the asset owning class, so you have to look for some kind of rent seeking operation to get you there.
Kids aren't duped by tiktok, they are responding to the world in front of them.
(and obviously it will all collapse at some point, but that could still be decades away)
Kids aren't duped by tiktok
Perhaps duped isn't the correct word, but mesmerized - and hence 'captured' is.
I don't blame children by any means - I blame adults, and in particular regulators, the political class, for failing children.
It's the old 'hands off' the market approach which has been the downfall of capitalism - and it is in no way what Adam Smith was aspiring to with respect to his philosophy.
No, it can't be 'decades away'.
Exponential growths - aka ponzis - end rapidly; even as you notice the inflection, they're near terminal. Bacteria in a petri-dish, all that.
We are actually seeing the peak now; I sense that 2018 will be seen as it, in hindsight, and maybe 2005-8 when the extending/pretending since, gets seen in context.
We may experience cascading failures, rather than one big drop, but now is when.....
"Wealth" from the now obsolete word Weal - : a sound, healthy, or prosperous state, a state of well-being.
Weal has, since the dawn of English, referred to well-being. It’s most often used in the phrase “common weal” to refer to the general good—that is, to the happiness, health, and safety of everyone in a community or nation.
Just goes to show how far we've fallen by not balancing out unfettered individual self interest, not disincentivising rentier and finance capitalism. Goes to show how our words and meanings have been lost in translation over time, one could say corrupted.
The real issue could be that we've made it about asset ownership and restricted ownership to the already "wealthy". Marx and his ideas of extending democracy into the workplace, ownership by the workers (not "the state" as everyone seems to believe) starts to make more sense in this regard.
An ideologically-blinkered post.
Read these people - i've got Marx, two books along from Atlas Shrugged, several away from Unfinished Business. You don't have to agree, and any blank 100% statement like yours, is always wrong; there will always be parts of what folk say, that will be worthy of contemplation, even if you have to take into account their lens.
I don’t like it. I’ve noticed over the last ten years a common shift towards a side hustle culture. uber driver after work, air bnb, some drop shipping thing… it all equates one thing - the erosion of workers rights. Side hustle culture is only going to make most of us poorer. It’s unsustainable. If i have to work 40 hours a week to make ends meet and then another 40 hours a week to ‘get ahead’. That’s a big, big problem. Scale it out to the entire population and it’ll end badly. Everyone doubling their efforts to be rewarded by a doubling of the cost of living.
side hustle culture is perpetuated by tech companies like air bnb, uber, fiverr and the like. Effectively employing people while evading regulations like public holidays, minimum leave requirements, mandatory breaks and maximum hours per week.
And it;s not just worker's rights. It is also consumer's rights when there is no support for the thing they just bought, and no-one to complain to. And even intellectual propety rights as much of the knock-off product was copied off genuine businesses who invested time and money to create it and bring it to market. In the end, everybody loses.
Not at all, most of what is described in the article is not truly "passive" income.
How many accountancy firms were started by someone taking on a few clients in their own time as a "side hustle"? Tradies often end up self-employed doing the same, and maybe taking on an employee or two.
My wife tried making and selling cakes (wedding/birthday/etc.) but decided it wasn't for her as many people were reluctant to pay $200+ for a cake that takes 6+ hours to make and decorate. It's something she was already doing for our family and enjoyed doing, but decided it wasn't worth the time.
Perhaps you plant a few walnut trees in your backyard and sell the nuts - many people garden for fun, if selling the produce doesn't reduce your enjoyment, why not?
There are many drop shippers around and they provide a valuable service - recently I bought a new garage door remote off one as the original manufacturer had closed. I tried looking myself on aliexpress but was willing to pay a bit more for one someone else had tried out first.
Like most small businesses, most won't become hugely successful, but why not have a punt if it's something you enjoy and will learn from?
My wife tried making and selling cakes (wedding/birthday/etc.) but decided it wasn't for her as many people were reluctant to pay $200+ for a cake that takes 6+ hours to make and decorate. It's something she was already doing for our family and enjoyed doing, but decided it wasn't worth the time.
Is part of the follow your passion, turn your hobby into busyness cult that started up many years ago. Would be great if everybody could do it.
The challenge is one needs to create the market for it and depending on the product or service, economies of scale, "competing" products, it's just not economic. For some turning it into busyness takes the joy away.
In a future world/parallel dimension maybe we'll evolve - everyone has an inherent worth, an inherent gift and is able to share it freely as well as support others with their gifts, everyone has their needs met, and everyone has enough. Giving, receiving, sharing rather than taking, getting, hoarding.
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