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Oct 24

5 failed ‘quick money-making’ schemes

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Now, there will be a few ‘controversial’ picks on this list. And, whilst we think there are pretty strong cases for these money-making ideas failing for the majority, there will no doubt be a few outlaying examples of success stories. I am not denying those success stories – instead my assessment of failure is based on the experience of most people and whether these ideas can be quickly picked up and used by anyone.

 

1. Passive Income

Of course, Passive Income can cover a wide range of tactics and ideas. What I am focusing on is the idea of passive income itself. More specifically, how some energetic individuals took the term ‘passive income’ and tried to disguise it as something that anyone can do.

We’ve all seen the YouTube videos with big claims. The wording of the title and the image combine to portray the idea that ‘anyone’ can make huge amounts (one claiming £4,500, roughly) per month. This is a falsehood, plain and simple. When you actually read into these ideas you realise that 90% of their cash comes from rental properties. Now, this may come as a shock, to rent out a property you first need to own it and that’s not cheap. Sure, if you can afford to buy several properties or the housing market bottoms out, then this is technically viable. But for the majority, it isn’t feasible.

Nearly all videos and articles on Passive Income should start with the following quote (if they told the truth): “To start, all you need is £1 million – then buy my eBook”.

If you are ever tempted by a Passive Income idea, just remember the original definition of the phrase: “Passive income is earnings derived from a rental property, limited partnership or other enterprise in which a person is not actively involved.”. This is not something ‘anyone’ can do.

 

2. Uber

Now, before I am attacked by a mob of Uber drivers saying that you can make money from Uber – let me first say, you are right. You can indeed make money, however, the actual amount after costs makes many question whether or not they should get out of bed.

Uber

It’s true that most use Uber as a ‘top up or second income’, so no one is expecting full time wages. However, even when this is considered the math simply does not stack up.

For our example, we are going to give Uber the best chance possible by having an example driver (who uses Uber as a second income) drive a ridiculous number of hours per week.  So, let’s say this driver uses Uber for 38hrs. Let’s also assume that he made a really good amount during those hours – £650 (which would be the very upper bracket of Uber hourly earnings).

On the face of it, £650 per week isn’t bad. However, this doesn’t consider the expenses. which are far more numerous for an Uber driver than someone working an office job (even if travel costs are included).

We have to take into account, fuel, cleaning, car rent (very few use their own car) and insurance.

  • Car rent = £130
  • Insurance = £30 (covers driver and passengers) – this is on the low side
  • Fuel = £70 – also on the low side but we are looking at the best-case scenario
  • Car cleaning = £30 – after 50+ trips, this becomes required

So, after all these costs are taken away from some really top end earnings, we are left with £390 – an hourly rate of £10. Now considering the average hourly earnings of matched betting at its worst is between £10 – £15, I’m struggling to understand why anyone would choose Uber.

 

3. Selling on Amazon

Much like Passive Income, selling on Amazon is conceptually valid. It can be best summed up as ‘buy cheap, sell expensive’.

Now, although this is a fine idea, there are a lot of reasons why it’s incredibly hard for the majority to make money from this.

Having done a fair bit of research into this area, the only people making money by flipping (on mass) products made in China are Youtubers selling eBooks on how to flip products made in China on Amazon.

If you actually find a guide that is willing to take you through the process, end to end, you realise how unbelievably hard it is to turn a profit by doing this. Nearly every guide will assume that you can find this magical gap in the market that has not already been filled by big international re-sellers. This is so much harder than it seems, it’s essentially like investing in the shares of a company that ends up growing incredibly fast and makes you back that initial investment. Even if you know what you are doing, you are relying on finding the “golden goose” product every other month.

The reality is that, more often than not, you will buy into a product, get a lot of it shipped over from China and then not be able to shift it. Of course, you won’t hear this mentioned on any of the guides you find online, they will just have one or two good ideas that worked years ago. This is the crux of the problem; no guide is going to tell you what to buy because they either want to keep the idea for themselves or they are not even doing it themselves and are just trying to sell you an eBook.

 

4. Blog and/or YouTube channel

Now we’ve spoken before about how you can make money from a blog or make money from a YouTube channel. People have made serious cash that way. But it’s no quick money maker, it’s essentially starting up a whole new business – in other words, hard work!

When it’s suggested as a quick money maker, it plays on the very human trait of seeing the destination and ignoring the journey. There are plenty of big YouTube/Blogging stars out there, earning millions for talking into a camera for 30 mins or posting a daily blog. The appeal of such a lifestyle is obvious.

 

YouTuube Channel

 

However, nearly everyone forgets that most (if not all) of these individuals spent years in obscurity. No-one watched their videos, no one read their blogs – and then they caught a lucky break and/or had something go viral.

To be clear, we’re not saying don’t try it. If you have a passion for something, then blogging and YouTube is the perfect platform to show it off. But don’t go in expecting to earn a lot of money from it, because that will not work in 99% of cases. Money should be a happy, coincidental by-product of activities like YouTube and blogging, or a product of a carefully thought through and thoroughly researched business plan.

 

5. Trading

Again, investing is something we’re big on at MoneyMagpie – people lose out by knowing nothing about how to invest. However, trading is not for those unwilling to invest plenty of time learning – that’s why we have a whole section dedicated to it.

 

Trading

 

Trading is a challenge, but it also comes with a large amount of risk. Without a lot of knowledge, trading is little better than a slightly more informed version of gambling. Those who do well in it are those who can absorb a loss and move on.

This is more of a skill than many people think. So, when I see trading lazily appear on ‘Top 10 ways to make money online’ it gets my back up, because if you stumble blindly into trading it’s a quick way to get into deep financial trouble.

You should only start trading after two very key boxes have been ticked. One, you’ve spent a good few months learning how trading works. Two, you have a financial cushion of money built up that you can afford to lose.

Why not use matched betting to build up a risk-free financial buffer and then move on to Trading from there?

So, yes, Trading is a good way to make money but it’s not quick, it’s not easy and it certainly is not without its risks. It should be approached with extreme caution and is absolutely hopeless for making a quick buck with little to no learning curve.

 

So, there is the top 5 list of over-rated or simply false ways of making a quick bit of money. No doubt this will spark a few conversations and we’d be interested to know what everyone else thinks.

If you’d like a way of genuinely making a decent amount of money (something to supplement your income) it’s well worth checking out matched betting. If done correctly, it’s completely risk free.

Even more, as a MoneyMagpie reader, you can get full access to Heads&Heads and the huge profits available, by using the discount code below for a MoneyMagpie exclusive discount – giving you 30 days Premium Membership for just £5!

Discount Code: MAGPIE5

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