What Is Passive Income?
Passive income is money made while you are not actively working. It’s often referred to as money you can make while you sleep!
How does that work? Allow me to explain.
In a regular job, you exchange your time for money. You work a certain number of hours for an agreed-upon wage. The only way to make more money is to increase the number of hours you work or to increase the payment.
When neither can grow, you’ve hit your pay ceiling and can no longer increase your income.
But what if you didn’t have to trade hours for dollars? What if there were no more income ceilings, and the sky was the limit?
Now we are talking passive income!
“But…I still don’t get it. How do I make money without putting in the hours?”
Of course, you will put in some hours upfront, but we will get to that later.
However, once your money-making systems are in place, they will be a well-oiled money-making machine.
Example: Booked and Burned Out to Free and Thriving
Let’s consider a nutrition coach who makes good money through one-on-one consultations with clients.
The nutrition coach has reached her limit on clients. Her schedule is full! She is burning both ends of the candle, rarely has time for her family, and has hit her income ceiling. In other words, she is stuck.
What would happen if the nutrition coach created a 12-week online course addressing the most common problems of her clients?
Once she designed the lessons, recorded them, and built the course on an online platform, she would have a powerful, passive-income money-maker.
You see, there would be no limit to the number of clients the nutrition coach could take on. She could efficiently serve thousands of customers a month where before she only had time for fifty.
The best part? Once the course is up and running, she has time to create new streams of income! She could pour her knowledge into an eBook, a YouTube channel, or a secondary course.
Talk about up-leveling your business!
What Are the Benefits of Passive Income?
To summarize, here are a few of the many incredible aspects of generating passive income.
- No earning limits!
- You can make money while you sleep
- Be your own boss
- Earn more time in your schedule
- Multiple streams of income
- Do what you’re passionate about
The last point is especially poignant to those trapped in a job they do not like. Human beings were not born to spin their wheels in a mindless 9 to 5 cycle of long hours and paltry paychecks. We are at our best when we immerse ourselves in what we love!
Related: 12 Ways to Save Money Today
Take me, for example. I get to spend all day every day helping women make positive changes in their lives. Writing, researching, journaling, designing, and networking are all part of my weekly activities, and they are all centered on the idea of self-improvement. I am so lucky to wake up excited about my workday.
If I can do it, you can do it!
Popular Methods of Passive Income
Let’s talk about the nuts and bolts of how each passive income strategy makes money. That’s the exciting part of passive income – creating cashflow!
eBooks
These days, practically anyone can publish an eBook on Amazon. Self-publishing means that you shouldn’t charge as much as a publishing house might, but it’s still dollars in your pocket! A bonus of self-publishing is that you won’t have to split profits with a publisher. But do make sure you invest in an editor!
You can easily find an affordable editor and cover designer on Fiverr, one of the largest freelance marketplaces on the internet.
Once your eBook publishes to Amazon, you can start making some passive income dollars with every sale and download. Happy authoring!
Online Courses
Online courses are a hot, hot market for making big money. With millions of individuals searching for answers to their problems online, there is no limit to the amount of money you can make by answering their questions!
In the past, it was more challenging to create an online course. You needed a website and lots of fancy plugins. With tools like Teachable, Podia, and Thinkific, building an online course is easier than ever. If you have basic lesson planning skills and are knowledgable about your topic, you are more than qualified to start making money with online courses.
Affiliate Marketing
If you are interested in starting a blog or if you have a significant social media presence, affiliate marketing could be for you!
Affiliate marketing is a fancy term for selling someone else’s products. We currently live in the age of the micro-influencer, where people are more likely to buy from an online voice they trust than from TV or radio ads. If you can position yourself as knowledgeable in a particular niche, you will have no problem getting your audience to buy from you.
A best practice of affiliate marketing is only to sell products you believe in and have tried. This passive income strategy is all about building trust with your audience. There’s no quicker way to lose credibility than to hawk products you have never tried!
Sponsored posts
I know of many bloggers who generate more than half of their income through sponsored posts alone! This one takes a bit more elbow grease as you will need to have a large and engaged following online.
With sponsored posts, a company can reach out to you and offer to pay you to create content around their brand or product. Creators can also reach out to brands they believe in to initiate a sponsored post deal. Ensure the conditions of the agreement are clear and are in writing, with signatures from both parties.
Beware of sponsored post scams in your inbox or your DMs. I’ve received my fair share of sketchy offers to join paid influencer programs, buy products at a discount, or to “just pay shipping.” Never take an offer from someone who seems to know nothing about your brand or your audience. A legitimate marketing associate will have done their research on your brand and have a detailed proposal ready for your review.
Ad space
Ad space is relatively straight forward. When your blog or YouTube channel hits a certain number of views, you can apply with Google Adsense to provide ad space in exchange for money. Keep in mind that the amount of money you will learn with ads is probably minimal and can be distracting from your content. Ads tend to generate more money on YouTube than on a blog.
If Passive Income Were Easy, Everyone Would Do It
Passive income has many attractive qualities that make it a desirable form of earning money. Still, every good thing has its share of challenges!
A Lot of Work Upfront
Passive income is a game of reaping what you sow! And the sowing stage takes blood, sweat, and tears.
Related: How to Become Self-Disciplined
To create passive income systems that work, a lot of trial and error is involved. Not to mention lots of time spent creating useful content that people want to consume.
A Steep Learning Curve
Making money online is a whole new way of thinking about income, and it requires a bit of research and training to get your feet wet. Whether your interest is course design or YouTube, there are many technical skills you will need to learn before you are successful. The creators who earn the most through passive income are those who invest both time and money in professional development, coaching, and learning materials.
Imposter Syndrome
Most people struggle with feelings of inadequacy, but these self-doubts can reach new levels when starting down the path of entrepreneurship. It is perfectly normal to doubt that you have enough experience and expertise to teach a course or write a book.
Related: How to Stop Negative Thoughts
However, these doubts can quickly immobilize you from taking any steps forward in your online business journey. It takes lots of meditation, reflection, and goal-setting to stay the path of confidence in the world of passive income.
Where to Start with Passive Income
The great news is that resources are abundant for anyone interested in earning passive income. I’ve gathered a few tools from my favorite creators for your perusing pleasure.
Resource 1: Pro Blogger Bundle
When I tell you that I have taken more blogging courses than I can remember, I’m not lying! I’ve downloaded countless freebies, bought eBooks, and tuned in to webinars. But nothing has ever been so beneficial to my blogging development as this comprehensive blogging course from Alex and Lauren at Create and Go.
This course is the bloggers’ university I’ve been searching for the past three years, with every aspect of this complex profession laid out in simple but informative steps. The price is a turn off for many beginners, but trust me when I tell you that the time and confusion it will save you is worth every penny!
I WANT TO KNOW MORE!
Resource 2 – Pat Flynn Passive Income Podcast
Perhaps you’re not quite ready to jump into the fray of online business, but you’re curious enough to learn more. I’ve got the right podcast for you! Pat Flynn has long been a leading expert in the field of passive income, and has even titled his program “The Passive Income Podcast.”
With expert guests from all different online business areas, I always learn about new tips, tricks, and tools from every single episode. And there are over a thousand episodes! Pat is a great host with excellent interviewing skills. Tune in HERE.
Resource 3 – Greg Kononenko, the Caffeinated Blogger
Hey, YouTube fans – this one is for you! Greg Kononenko, also known as the Caffeinated Blogger, is a brass tacks Kiwi YouTuber specializing in passive income.
Greg generates passive income from several revenue streams and shares all of his secrets for free on his weekly uploads. His videos are concise, practical, and honest. Check out his channel here.
Online Business Is the Future
According to an estimation by Nasdaq, 95% of all purchases will be done online by 2040. KPMG reports that 55% of people research products online before buying, which is a massive opportunity for affiliate sales. Every month, more and more business happens on the internet. Now is your chance to grab a piece of the pie!
Passive income and online business may seem daunting, but remember that they are skills that can be learned just like anything else! There is still copious space in the online business market for new blogs, new courses, and new books.