Passive income is money that still comes in when you are not actively working. It offers the promise of being able to leave a conventional job, where you trade time for money, and enjoy a life of freedom to work when and where you choose instead. Sounds pretty good, huh?
Taken to the ultimate, you can potentially spend your time doing whatever you want, whilst your income still rolls in. Whether that’s sipping cocktails on a tropical beach whilst working from your laptop, travelling around the world crossing off items on your bucket list, or simply raising your kids as a stay-at-home parent. Whatever you want. It may just mean the freedom to work for yourself, when and where you choose.
One thing it is not, is easy money. Not in the context that we’re talking about here anyway. Building a passive income stream takes a lot of work upfront. A lot of work. But what it then gives you is the ability to de-couple your income from your time. It could perhaps more accurately be called residual income.
In a conventional job, you have to put time in to get money out. The moment you stop working, your income also stops. So to maintain your lifestyle you have to keep working. If you love your job, that’s great. But most people don’t. There are probably a thousand things they would rather be doing instead, but they have to work to pay the bills.
That leads to the sad situation where most people spend all their time doing a job they hate, just to be able to afford a life where they keep on doing exactly that. And then, after 45 years, they can stop and do what they want for a bit. If they get there. Hopefully, they aren’t too old and tired to enjoy it by then.
Passive income offers an alternative to this. An escape route where you can spend your life doing what you want to do, and still maintain an income.Continue reading
There is an old Chinese proverb that says “The best time to plant a tree was 20 years ago. The second best time is now”.
The single biggest obstacle to your becoming successful in generating passive income streams will be just getting started. Nothing more.
Your biggest enemy won’t be technical know-how, or marketing knowledge, but procrastination. And overwhelm. You need to be ready for this and make sure it doesn’t happen to you.
You may not be a natural procrastinator, I’m not myself, but there is something about this whole online business thing that brings it out in everybody. Me included.
There is a huge amount of information available for you to consume. It’s tempting, especially when you’re filled with enthusiasm for this exciting new project, to read avidly every article you can get your hands on, buy every eBook, watch every video, attend every webinar, and sign up for every training course. You keep searching for that last little bit of knowledge to complete the jigsaw, and then you’re going to get started.
I know, because I’ve done it myself.
What happens is it becomes like a drug. You keep thinking, if I can just learn a little bit more, I’ll be ready to get started. Very soon. Any day now…
And let’s not forget, there is a huge industry out there trying very hard to sell you all these things. And they are very good at it. You’re constantly besieged by amazing time-limited, buy now, offers for the latest training that promises everything you need to know to ‘crack the code’ to online income.
Here’s the thing, you don’t need to know everything. In fact, it’s not possible to know everything, nobody does. You just have to know enough.
There’s a Swedish detective novel called Borkmann’s Point which hypothesises that there comes a point in every murder investigation, where you already have enough information to solve the case. Once you reach that point, all the effort you put into further investigation takes you further away from the solution, not closer.
Once you reach Borkmann’s Point, you need to stop looking further and concentrate on using what you have already learned.
The same thing applies to starting passive income streams. And you reach it much sooner than you think.
Once you have enough information and knowledge to start your business, acquiring any more is simply delaying you, not helping you. In fact, it’s actually hindering you, because it’s stopping you from doing the most valuable thing you can do, which is just getting started.Continue reading
In a previous article (What is Passive Income?) we defined passive income for our purposes to be self-sustaining online income that doesn’t require a real-time presence. And we are only interested in passive income strategies that do not require significant up-front capital investment so we are ruling out things like stock market investing, property rental, peer to peer lending etc, as they require substantial capital. Now we’re going to look at some methods of achieving this.
Although there are lots of different ways to earn a passive income, to meet our requirements they broadly break down into 4 main methods:
In previous articles, we’ve looked at what is passive income, some general passive income strategies, and how to find your niche. In this article, we’re going to look at 12 proven passive income ideas that you can use yourself, in whatever niche you choose.
These ideas are not either/or options, you could use several of these ideas together in one business. You should leverage your audience and visitors to generate as many income streams as possible.
If you provide real value, and people are very satisfied, they will naturally want to buy more things from you. Give them that opportunity!
Creating an eBook and selling it as a downloadable PDF is a very simple method that anybody can use to build a passive income stream. You just have to create a book, or other resource, that is valuable to people in your niche.
This could be a tutorial, or how-to guide, a list of resources, a directory, some templates, ready-written letters, a collection of reviews or tips — anything that people would find useful enough to pay for.
You could even re-package a series of blog posts, and sell them as a book. This is quite a popular strategy, as people are prepared to pay for the convenience of having everything in one place to refer back to.
Maybe you already have some specialist knowledge or skills that other people would like to learn, or you’ve spent a lot of time finding things out that other people need to know.
If you haven’t, then if you find out what people need, you could learn it yourself and then produce an eBook about it. Or outsource it and get somebody else to write it for you.
A good way to find eBook ideas is to look at books in your niche on Amazon, and see what people are buying, and also what they are saying in the reviews. That will often give you an idea of the shortcomings in existing books.
Maybe there is something you can do better, or you can focus on a specific aspect that the reviewers highlight as being missing from the existing books.
An eBook doesn’t have to be a great big epic manuscript. Some of the most successful eBooks are little 10 to 20 page PDFs, in simple text format.
It’s all about the value of the information they contain, and they can sell for anything from a couple of dollars right up to a hundred dollars or more. Whatever you sell your eBook for, it’s all profit.
The most common price point is somewhere between $5 and $30. Obviously the more you sell them for, the fewer copies you have to sell in order to make your desired income.
You may find you sell more copies if you price your book cheaper, however the more expensive it is, the higher it’s perceived value will be so you may actually sell more copies at a higher price!
The only way to find out what works in your market, is to try it and see. And of course to look at what competing offerings there are. Your book might be more expensive but better, or it could be less comprehensive and cheaper — either position is valid.
You will need to setup a website, perhaps a blog about your niche, in order to sell your book, and you will also want to promote it on social media, and build a mailing list to sell your book and other products (getting traffic to your website, using social media, and building a mailing list are whole subjects on their own which will be covered separately).
The beauty of this passive income idea, is it is very passive. Once you’ve written the book and setup your website or other sales channel, it looks after itself. It’s also very scalable — you can just produce more books.
A typical eBook might take 3 or 4 days to produce, could you do one per month?
Your book might only earn a few hundred dollars per month, but what if you have 10 of them… or 20. eBooks often continue to sell years after they were originally written, with little or no ongoing work.
To handle the sales process, delivery, and payment, you can either sign up with a service like Gumroad, or implement it all on your own website. The Gumroad route is probably much easier, and they also handle all the EU VAT for you, which is a major headache for publishers from all countries selling eBooks in the EU.
Alternatively, rather than produce your own books or information products, you can sell other people’s.
This has the advantage of not having to produce the book or product yourself, and you can promote products that are already proven sellers. You promote the product in exactly the way that you would if it was your own, but you send them to the vendor’s sales page (probably via an affiliate link, as below), rather than your own sales page.
The strategy here is to create content that will attract and engage your audience, and then send them to other sites that will pay you a commission if they buy something. There are a number of ways of doing this.
One is to create a review site for the products you are promoting, so people will read your review, and if interested go off and buy the product. This is a fairly transparent ploy, and to be honest it’s been done to death in recent years. Nevertheless, if you can find a niche that hasn’t been over-exploited in this way, it can still be a winning strategy.
Perhaps a better way, rather than just producing a site full of reviews on products you’re promoting, is to produce a site full of useful and helpful content, that happens to include affiliate links in context.
You could, for example, have a site all about windsurfing that contains useful tips, techniques, tutorials, and interesting articles, and include some affiliate links where appropriate. You could have links to books about windsurfing on Amazon, links to windsurfing gear for sale on Amazon and eBay, links to courses, boards, sails etc, but make these links relevant and in context.
So you’re giving useful, helpful information, and mentioning by the way, ‘this product happens to be really good for X and if you’re looking for Y, then this one is better’.
This type of advice-led promotion is far more useful to your audience than just promoting products for the sake of it. You’re adding real value through personal recommendation so your audience will appreciate it more. They are also far more likely to buy when they get there.
So you’ve decided that you want to build a passive income. You’ve looked at a few different passive income strategies, or ways of earning a passive income, and you’ve seen a few ideas that look promising. But how do you choose what to do — how do you choose your niche?
Choice is a good thing. Except when there’s too much of it.
First of all, let’s look at what we mean by a niche, and why it’s important.
A niche market is a very specific part of a broader market. It doesn’t exist on its own as such, it’s created simply by targeting a very well-defined segment of a wider market.
The appeal of a niche market is that you can be a big fish in a small pond, rather than trying to be all things to all men and consequently struggling to get yourself heard. It’s a way of getting a competitive advantage by specialising in a very particular market, and potentially serving it better than anybody else.
Imagine that you wanted to start a blog about cars. How many web pages or blogs about cars do you think there are? About 694 million as it happens…
Your chances of getting noticed, and making yourself heard amongst that much competition are practically zero. And what are all those people looking for anyway — they could be looking to buy cars, or to rent cars, insure cars, look at pictures of model cars, or they could even manufacture cars. It’s so broad and undefined, there’s no way of knowing.Continue reading