I think many of us are interested in the concept of passive income but we are just not sure where to start. As my business has grown so have my passive income streams – some small, some large – and it’s these which initially allowed me the freedom to walk away from a corporate job. If you are thinking you want to get started with passive income I hope this post will at least get you thinking about what is possible. This isn’t by any means an exhaustive list, but it is a good place to start. The exciting thing is there’s a whole world of opportunity out there awaiting you.
What Is Passive Income?
Before we talk about what passive income is, let’s be very clear what it’s not.
It’s not some dodgy internet scheme or a ‘get rich quick’ approach.
Neither is it something where no work is involved.
Rather, depending which approach you take, it’s leveraging what you already have in place to earn additional income, the example for this is affiliate marketing, advertising or sponsored posts on your blog. It’s in addition to the services or products you already sell within your business.
Alternatively it’s doing some upfront work for longer term income. This would be things like selling e-books, courses etc.
At heart it’s called passive income because you can make money around the clock, you aren’t tied to exchanging dollars/euros/pounds for your time.
Even if you have an existing business it’s a good idea to add passive income streams to what you already offer. Overall it’s a good idea not to put all your eggs in one basket, aiming instead to generate multiple income streams. Even if some of these are quite small overall they will add up to a larger income over time.
Option 1: Affiliate Marketing
Let’s start with affiliate marketing. This means that you set up as an affiliate of certain companies and then when you make a sale of one of their products (or sometimes services) you get a % of the sale. It can work for both physical and digital products.
A few of the affiliate networks you might have heard of are:
- Amazon Associates
- Commission Junction
- Affiliate Window
The great thing about affiliate marketing is that you can find companies to work with in almost any niche, for example Amazon sells virtually every product under the sun. There are some regulations you need to follow when you become an affiliate, such as having an affiliate disclaimer on your site, so do a little research and also read the T&Cs for each affiliate network carefully.
Top Tip: if you are interested in working with a particular company google their name + affiliate program and see what comes up. Alternatively they may have information on their affiliate program at the bottom of their site or you could reach out to them directly.
Option 2: Blog Adverts & Sponsored Posts
You will need a relatively large readership before companies will be interested in advertising with you or placing products for review but it can be a good way to align with brands that are a fit for your business. You can try reaching out to companies to see if they work with bloggers or sometimes you will be approached.
There are some legal things you need to comply with such as ensuring you let your readers know that you have been given products for review. In terms of the search engines, such as Google, they always indicate that any paid links should be ‘nofollow’ and just be wary as you can be de-ranked if you don’t adhere to this. Don’t panic though when you add your link in WordPress or whichever platform you choose you can just mark it ‘nofollow’ (which means that the search engine doesn’t let that link influence the link target’s ranking).
Option 3: E-Books
You can create e-books about your area of expertise and sell them direct from your site. Create a Word document and then format it as a pdf – you can use Google docs for this if you don’t have Adobe Acrobat.
(NB. If VAT MOSS is a concern for you then Gumroad automatically deducts and pays the VAT – you can also deliver other digital products this way)
Option 4: Kindle Books
You can also turn books (fiction or non-fiction) into Kindle files which you can sell on Amazon KDP. Anyone can set up an account and then all you need is your book turned into a .mobi file, you can either do this through software such as Jutoh or you can pay a freelancer to do it.
Kindle gives you access to a much wider audience plus if you opt for the KDP program you can run offers such as giving your book away for free or running sales on it. (KDP means your book needs to be exclusive to Amazon) These help you to start ranking in Amazon. Whether you want to write books about a specific niche where you have expertise or whether you have always dreamed of being an author, then becoming an indie author is now open to everyone.
You will need to market your book yourself though and it helps if you have a large following to get started. Reviews are hugely important and the people who gain the largest income from Amazon usually have multiple books available which they link together.
Option 5: Online Courses
Lastly, online courses allow you to share your expertise and leverage your time – if you are running the course live you are normally serving several people at once rather than 1-to-1 as most services are. Or you can build an evergreen course and then sell it multiple times.
There is obviously some ongoing upkeep in this, such as answering people’s questions and adding fresh material, but if you enjoy creating content and connecting with your audience this can be a very rewarding route – both financially and work wise.
Courses can be delivered in multiple ways. You can have simple text courses delivered by email, these can also be a great way to build your mailing list, or you can opt for courses including video, audio or webinars.
They are also a good option for almost any niche – if you can teach someone how to do something then you can create a course around it.
Some are evergreen courses where people can join at any time, others have a distinctive launch phase and people need to sign up before the end date and then you all work through the course together. Other courses are run live, for example if you have a webinar element.
These are just some of the ways you can generate passive income but hopefully they have helped you to start thinking about the ways you could bring elements into your existing business or start from scratch. With all of them you will need to dive a little further into each subject area to make sure you are all set up ok and within any guidelines or legislation. However, they are definitely worth the upfront time investment as over the longer term they can reap excellent returns in terms of income.
I am definitely open to creating some more content around any of these options, so if that would interest you let me know in the comments section below which types of passive income excite you!