Have you ever looked at people who claim to earn tons of money for very little work and asked yourself, “What’s their secret?”
Well, I’ll tell you.
Their secret is almost always passive income.
Passive income describes earnings derived from something that, once it’s up and running, requires little — if any — work to maintain. Its opposite is active income, which refers to income that stops coming in when you stop working.
The reason some people can become so successful through passive income is the fact that there’s nothing really stopping them from adding to their portfolio of income streams.
There are some people that survive entirely on passive income. Most people, however, including myself, use it to supplement their active income.
Whatever your goals are — to give up the day job entirely, or to simply treat yourself to more of life’s luxuries thanks to a bigger paycheck — you have to start somewhere.
Here are five passive income business models that can work for you, whatever your area of expertise.
Five Sources of Passive Income
1. Release An Ebook
Releasing an ebook is a natural step for bloggers looking for a source of passive income, but you don’t have to have experience writing engaging content to be successful with this business model.
If you’re not confident with the written word, just hire a ghostwriter (go here for a list of places to find freelancers). Just keep in mind that most of the time, you get what you pay for.
You’ll also need to provide your ghostwriter with a solid brief if you want to get the best out of them.
That brief should include (but isn’t limited to)…
Don’t just write an ebook about anything. The topic you choose should be something you’re very knowledgeable and passionate about. It should also be something people want to know about and that at the same time, hasn’t been covered to death by other writers.
Don’t just pick up a pen and start writing — or expect your ghostwriter to. It’s important to map out exactly what your book will contain and how it will be laid out. Create a detailed outline to follow.
Understanding who you want to buy your ebook is critical. Don’t assume the audience for it matches your current customer base to a T. That particular detail is going to change what you include in your ebook, and the style and tone used to write it.
For a more comprehensive look at writing an ebook that people want to read and are happy to pay for, have a peek at this excellent post by Amy Lynn Andrews.
2. Sell An Online Course
Generally speaking, creating an online course is far more labor-intensive than creating an ebook. But it could also potentially command a lot more cash from customers. Rarely will an ebook be a viable product if it costs more than $10-$20, but a course can easily go for 10 times that.
Alternatively, you can charge a monthly fee for access and earn a recurring income from customers (DistilledU is an excellent example of this type of model).
Creating an online course necessitates that you know your niche inside and out. You’ll probably have to enlist the help of a designer and developer, and ideally, someone with the skills to produce video, too.
If you’re going to be charging monthly, it’s important to offer members value for money with regular updates (making this not entirely passive), as well as members-only access to features like Q&A forums or live webinars.
3. Create a Subscription Site
Many subscription sites share similarities with online courses that charge a monthly access fee. The type I’m referring to are designed as educational resources — however, unlike a “course,” they’re not meant to be “completed.” Copyblogger’s content marketing community Authority is a good example of this sort of site.
Of course, a subscription site doesn’t have to sell information. Streaming sites like Netflix and Hulu are both examples of sites that sell entertainment, rather than education. Weight Watchers sells diet and weight loss support. eHarmony sells… hopes and dreams, I guess?
Whatever these sites sell, the message I’m trying to get across is that pretty much any niche can be monetized to create passive income through a subscription site. You just have to ensure the content of that site is worth paying for.
4. Build a Tool
This one requires that you possess design and development skills — or at least the ability to work with someone who does.
The concept behind the idea is simple: you identify a gap in the market for a product that helps people in your industry perform a task more quickly or efficiently. You design and build a tool that fills that gap. You then monetize it by charging customers for access.
This is something I’ve done more than once. While there’s a certain amount of work involved in maintaining the tools — and a lot of work that goes into marketing them — a simpler tool can be pretty self-sufficient once it becomes known in the industry.
This one also has the potential to become something bigger. Take Moz, for instance. Okay, so the company is going through some tough times right now, but it’s come a long, long way since the 2007 launch of PRO, its first set of SEO tools.
5. Create an Affiliate Site
Or, monetize your existing site or blog through affiliate links.
An affiliate link is a special type of URL that contains the ID of an affiliate (which in this case would be you). Generally, that link will point to a product for sale on another site. The idea is that you use your site to promote said product, include your affiliate link, and when someone clicks said link and buys that product, you earn a commission.
Generally that commission is very small (although it depends on what you’re promoting); however, the idea is to build up a site populated with many affiliate links, so your earnings are accumulative.
An existing blog can be monetized using affiliate links, or you can create a site for this purpose from scratch.
Take a look at UK consumer site Money Saving Expert and gadget review site Wirecutter to see examples of some seriously awesome affiliate sites.
One of the reasons these sites are so successful is their reputation and the quality of their content: they share information users trust.
Another reason is their niche.
As with all the other business models featured here, your niche should be something you have enough interest in to be able to consistently produce quality content around it.
It should also be a niche with a wide range of products to promote. At the same time, the less competitive your niche, the higher your chances of success – so you need to strike a balance. If a niche has little to no competition, there’s probably a reason for that – lack of consumer interest.
If possible, pick a niche that’s about to boom.
Do you know of other business models that can generate passive income in any niche? Let me know in the comments below.
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