Five Ways to Generate Passive Income.

Introduction

Today, we are talking about five tried and true ways to generate passive income that don’t require a substantial initial monetary investment. We’re going to cover what they are, how to get started, and your earnings potential. Now, I’ve personally tried four out of the five we’re going to be talking about, and I’ve made over $2 million from these revenue streams combined, so they do work.

Any passive income stream that you set up is going to require either an upfront monetary investment or an upfront investment of time and energy, meaning you’re going to do a bunch of work upfront to set up a system that can generate money for you without your real-time presence. Those are the income streams we’re going to be talking about today, and there’s going to be some variation in their earnings. Idea 1 potential as well.

Digital Products

Overview

So, the first one we’re going to look at is digital products. So, this could be anything from online courses to printables to templates. It could even be photography, or music, or video footage.

Getting Started

Now, at the easier end of the spectrum, you could simply create something like an e-book and then have somebody else’s audience sell it for you as an affiliate. If you’re some sort of an artist and you have things like photography, or videos, or music that you’ve shot, you could submit those to a stock website and collect royalties.

And at the more labor-intensive end of the spectrum, you could build up an audience like on YouTube, or through a blog, or a podcast. You could be creating weekly content in order to expand that audience, and then eventually, depending on what niche you settle into, you could create and offer a digital course.

Earnings Potential

Now, earnings vary pretty widely with this one. If you’re submitting photography to a stock website, you’re probably not going to earn that much. But if you’ve created a digital course, that’s something that can earn you hundreds, thousands, or even tens of thousands of dollars a month.

But of course, with a digital course, that’s something that you’re going to have to maintain and probably do updates to on a fairly regular basis. In my experience, that extra effort has been well worth it just in terms of the revenue that my own Idea 2 digital course has created.

Physical Products

Overview

Next up, we’ve got physical products. And as the name suggests, this is simply selling physical products online. So, you could do this through drop shipping. You could use a print-on-demand platform like Redbubble. This is great because you’re not actually managing inventory or customer service yourself.

Or you could do something like Amazon FBA, which is Fulfillment by Amazon. So, in this scenario, you’re getting a product manufactured somewhere, usually overseas, like from China. Then you’re sending those finished products to the Amazon warehouse.

And when someone orders your product on Amazon, Amazon will take that product and ship it directly to the customer. This is great because you don’t have to worry about order fulfillment, but Amazon does take a pretty hefty cut for being able to use their warehouse.

Getting Started

Drop Shipping

So, if you wanted to get started with drop shipping, first you’d need to source out a product. And it’s always a good idea to do some research first to see what products are currently selling. And then you’d want to open up an online store using something like Shopify.

When an order comes through on your site, that order is going to need to be relayed to the manufacturer who has created that product and who’s potentially storing that product for you, and then they will ship it off to your customer.

Amazon FBA

For FBA, again, you’re going to source those products, have the products made, and then you’re going to send them to Amazon’s warehouse. When someone orders one of those products, Amazon will ship it directly to your customer.

Print-on-Demand

And then with print-on-demand platforms like Redbubble, you just simply upload your designs, choose which type of products you want your designs to appear on (anything from mugs to T-shirts to pillows), and then when somebody orders that product, Redbubble (or whatever the site you’re using) is going to ship that product to your customer.

Startup Costs and Passiveness

So, for startup costs for print-on-demand, it’s free. If you’re doing something like drop shipping and you want to use a Shopify store to sell your product, that’s going to be around $30 a month.

FBA

FBA is definitely going to be your most expensive option here to get started. You’re probably looking at about $2,500. That’s so that you can pay for samples and inventory and warehousing. But in terms of earnings potential, FBA is probably where you’re going to generate the most amount of money.

Terms

And then in terms of how passive this actually is, drop shipping is probably going to be the most passive, probably only requiring a few hours a week. FBA, you’re probably looking at at least 5 to 20 plus hours a week. So, Idea 3, that’s going to be the least passive.

Content Monetization

Overview

Number three is content monetization, and this is one of my favorites. So, you’re going to pick a platform. It could be YouTube, it could be a blog, it could be a podcast, social media. It could even be something like a Substack newsletter.

And you’re going to get paid through advertising, or sponsored content, or affiliate marketing. The biggest opportunity for content monetization, in my view and in my experience, is on YouTube, but it does take some time to get going.

Affiliate Marketing

Overview

Number Idea 4, four is affiliate marketing, and this is probably my favorite form of passive income because, in my experience, it’s been the biggest earnings for the least amount of work.

So, this can be as basic as promoting products through Amazon’s affiliate program. For example, if I was to leave links underneath this article of all the equipment I use for my article, and they all link to Amazon, anytime anyone looked in there, clicked one of those links, and went to Amazon and bought one of those products (and even some other products that they might be shopping for at the same time), I would then get a commission for that.

Personal Experience and Strategy

Now, what’s actually worked best for me is promoting other people’s products to my email list. 

And because of that, the people on my email list are really into different products and services that can help them speed up their publishing process and help streamline the process. So, I have a favorite keyword research tool called Publisher Rocket. So, that is a product that I regularly promote to my audience.

I also promote other people’s digital courses that I think would be a fit for my audience. And at this point, I’ve managed to create a six-figure affiliate marketing revenue stream, and usually all it takes is me sitting down and writing two or three emails.

And normally, if I’m promoting these products to my list, I’m being supplied with swipe copy, so the emails are already written for me. I just need to go in and do a little bit of tweaking to add my own voice.

Building an Audience and Getting Started

So, again, biggest earnings potential here with the smallest amount of work. Having said that, in order to earn the most amount of money possible, you need to have some sort of an audience, and it takes time to build a list and build an audience. So, this isn’t something that you’re probably going to be able to have instant success with.

Now, how you get started is you build a website or you get yourself on a platform like YouTube, and you start building an audience and an email list around the topic that is going to be related to the products and services that you’re going to want to promote.

If you write a blog, you can write blog posts about a certain topic, and then you can include affiliate links in that blog post that go to the products that you would like to promote.

Either way, it’s probably going to take months, perhaps even a couple of years, to really get an audience big enough where you’re going to be earning a substantial amount of income. And if you do want to learn a little bit more about affiliate marketing, go ahead and check out this video up here.

Self-Publishing

Overview

And now we come to number five, which is my absolute favorite because it has made me quite a bit of Idea 5 passive income over the years, and that is self-publishing.

Business Model

Now, in order to turn this into a passive income business model, you’ll have to do one of two things. So, if you are writing non-fiction or fiction books, you’re going to have to outsource because this is something you’re going to have to do at scale, and you are just physically not going to be able to write all of those books yourself.

So, you head on over to Amazon, you do some research to figure out the types of books that other people are actively searching for. Then you hire a writer to create those books. You purchase the rights from them, you publish the books, and then you collect the royalties in perpetuity for as long as those books are for sale and in demand.

Low and Medium Content Books

These are things like daily planners, journals, workbooks, activity books, coloring books.

Now, the wonderful thing about these books is that they don’t need a writer. You can create these books yourself, eliminating that expense, and you can do those at scale.

The underlying principle here is the same: you go on Amazon, you do some research to figure out the types of low content or medium content books that people are searching for. You create those books, you upload the digital files to Amazon KDP, and then you collect the royalties.

So, this is all print-on-demand. So, when a customer comes along shopping on Amazon and they find your book, they order a copy. Amazon will print off one copy, and they will ship that directly to the customer.

Startup Costs and Passiveness

Three Steps to Publishing Your First Low Content Book in Less Than a Day.’ You can find that down in the description below.

If you’re outsourcing fiction or non-fiction, the prices vary pretty dramatically, but to get something of good quality, you’re going to be paying a few hundred a book at least.

I know when I started out, I was doing fiction, and I was spending about $500 on very good quality fiction novellas. And this is why I love low content publishing so much: you can do everything yourself, it’s not costing you anything, and you get to collect all of the profits.

Terms

Now, in terms of how passive it really is, this depends. Sometimes I was putting in a few hours a week. At the peak, I was probably putting in about 20 hours a week.

But again, when I had baby number one, I was able to step away for a full 6 months, and there was between $20,000 and $30,000 in passive income rolling into my bank account each and every one of those months.

It was all about just putting in that upfront effort to set up the system, and then I was able to completely remove myself from the equation and keep generating profits.