The 5 Steps You Need to Follow for Passive Income

Most of us spend most of our waking hours each day working hard to make other people rich.  It’s tough to get ahead when every time you get a paycheck, the previous paycheck is already spent!

The answer is passive income.  You only have so much time in life, and trading most of that time for a little bit of money isn’t a very good deal for you.  That’s why every wealthy person I’ve ever met does this one thing to change the equation.  That one thing is to earn a passive income.  So we’ve put together a list of 5 ways we earn passive income.

Every idea on this list is something you can do in about 1 month’s time to earn a passive income for years to come.  I encourage you to spend some of your available time (when you’re not working hard to make someone else rich) on one or more of these projects to completely change your life and your future.

Write an E-Book

One of the most often overlooked sources of passive income is e-books.

E-books might not seem as exciting or even profitable as some other sources of online income, but in my experience, they can be a great source of long-term passive income.  Especially if you’re looking for something you can create this month to generate passive income for years.

Here are a few things I love about e-books.

  • You can literally start now and be done in a month’s time.  There’s no real ongoing work or updating required to earn income from it unless you use some other channel to market it.  Really, if you want, you can write it, list it, and be done.
  • You can earn income for years!  Some other sources of passive income fizzle out really fast if you don’t keep updating them or adding new content.  But in my experience, e-books will keep earning you a paycheck for several years.

Lots of people are afraid to write an e-book.  They don’t think they know enough or they think they’re not a very good writer.  You don’t have to be an expert or an amazing writer to earn an income from an e-book.  Just pick a topic you know something about, or that you’re passionate about.  Write what you know and don’t pretend to be an expert if you’re not.

Books from the perspective of a beginner or someone who’s learning have a lot of value.  They make you really relate-able to the reader.

So here’s what you do.  Write your book in a word processor like Microsoft Word.  Most e-books are about 50,000 words.  If you can get above about 30,000 then you’ll probably be fine.  Once you’re done, have a friend or someone read through it and help you fix any typos or things that don’t make sense to them.

Next, go to smashwords.com.  They’ll take your Word document and put it in the format it needs to be in and distribute it out to Amazon, Barnes and Noble, and all the other major e-book sites.

Then you’re done!

If you have a website or YouTube channel to market your e-book, that’s great.  But if not then you can check the box.  You’re now an author.  And then get back to normal life and wait for those checks to roll in!

Time to Earn Your First Dollar: 1 month
How Long You’ll Keep Getting Paid: 10 years
Earning Potential for 30 Days Work: $100 to $1,000 per month—really depends how you market it
Ongoing Work Required: Almost none

Build a Passive Income Website

This is actually what we do full-time and what we teach to hundreds of people at any given time.  Building your own informational website is a great way to earn a large, passive income for a long time

Here’s the basic idea.  Take the same type of content you would put in an e-book and put it on your own website website.  If you target the right keywords then with about 30 posts you can get enough traffic to earn a great income.

And how do you earn this income?  There are 3 ways we use all the time.

  1. Affiliate products—you link to products that other people are selling (on Amazon or various other sites) and you earn a commission for every sale.
  2. Advertising—Once you start to get some traffic, you can place ads from premium ad networks on your sites.  This is getting to be a more and more exciting way to earn income every day.
  3. Information products—Take some of your content and organize it into a premium content package.  It can be in the format of a written guide, audio guide, or video course.  However you want it to be.  You start selling this on your site to those who want the premium information and suddenly your site income gets really interesting!

This is actually a lot simpler than most people would think.  PontoonGuide.com was build almost entirely in 30 days (about 1-2 hours per day) and within 2 years it was earning over $4,000 per month just for affiliate products.

The biggest mistake people make is that they quit too soon.  They write their 30 articles and when they don’t earn an money in 3 months they quit and delete their site!  This is a HUGE mistake.  It’s normal for a new site to take 3-6 months for its content to start to bring in any substantial amount of traffic.

It’s easy to get overwhelmed even thinking about building a website.  But we’ve got you covered.  We’ve taught hundreds of people how to do it with our program called Project 24.

In Project 24 we help you build up your online income so that it can replace your full-time income in about 24 months.

Time to Earn Your First Dollar: 3 months
How Long You’ll Keep Getting Paid: 2 to 15 years depending on the topic
Earning Potential for 30 Days Work: $500 to $5,000 per month
Ongoing Work Required: Check in every couple months

Start a YouTube Channel

YouTube is a huge opportunity right now.  In fact, we recommend to everyone in Project 24 that they also make a YouTube channel for their website.  But even without a website, a YouTube channel can be a great source of passive income.

This works just like the website.  Pick a topic you can share information about and then start recording videos.  Keep them simple.  Use a cell phone camera and YouTube’s video editor.

Once you start to get views on your YouTube channel, you can start making money with ads.  But that’s not even the exciting part.  You can also start making money just like we talked about on your website.  You can recommend affiliate products and even sell your own info products.  So if you’re not up for writing a bunch this month, just start making some videos.

Let me give you a little example.

Our YouTube channel for CamperReport.com has only 8 videos on it that were filmed on an iPhone.  Now, about a year later, that channel has had over a million total views.  It’s crazy awesome!

So here’s my recommendation.  Spend this month making 30 videos.  Upload them to YouTube and schedule them to post once a week for 30 weeks.  If it starts to pick up, you’ll probably decide you want to make more videos because the income will be just too exciting!

Time to Earn Your First Dollar: 5 months
How Long You’ll Keep Getting Paid: 1 to 5 years
Earning Potential for 30 Days Work: $400 per month
Ongoing Work Required: Adding more video content on a regular basis will dramatically grow your earnings—but if you don’t add more content, then no ongoing work is required

Record a Podcast

There are reasons that podcasting isn’t our number 1 recommendation.  We actually talk about them in this YouTube video. But it’s still a viable business.

A podcast is going to work just like the YouTube channel, just through a different medium.

My recommendation is that you record a season of a podcast.  Like a TV show.  That way you’re not committing to an ongoing, weekly episode.  Spend the next month recording 30 episodes on any topic you want and schedule them to go out once a week.  I would pick something informational or entertaining.

Time to Earn Your First Dollar: 1 month
How Long You’ll Keep Getting Paid: Less than 2 years
Earning Potential for 30 Days Work: $50 to $500
Ongoing Work Required: Like a YouTube channel, to continue to earn on an ongoing basis and take your earnings to the next level, you’ll need to keep adding content

Start Investing

The most important source of passive income over the course of your life is investments.  If you’re not putting money away into some kind of investment from a young age, you’re missing out on more money than if you miss just about any other opportunity.

The difference in how much wealth you will accumulate if you start investing at 25 vs 45 is astounding.  And it’s the #1 way that most wealthy people generate passive income.

Here’s what I recommend.  Just look online for a good investment broker.  If you’re in the United States, TD Ameritrade or Fidelity are two great brokerages that will let you open an account without having to work with a slick financial adviser who just wants to make a commission on your investments.

Set aside a little bit of money.  Most investment accounts require a minimum of either $500 or $1,000 to open a new account.  So get that much set aside.  Then, open an account and make a deposit.  If you don’t know anything at all about investing, just put it in an S&P500 index fund.  It’s not the top investment out there, but it’s a good mix of a bunch of stocks so it’s about as safe as an investment in the stock market can be.

From there, I recommend you keep investing every month.  But if you don’t, at least put some money in whenever you can.  I also recommend you learn as much as you can about mutual funds and investing.  The more you know, the better you can invest.

I just want to reiterate one point.  I make really good money using the methods I’ve talked about in this article.  But I have made and will definitely make a lot more money from this one than all four of the others combined.  And that’s saying something because internet marketing is my full-time job.

Time to Earn Your First Dollar: Immediate
How Long You’ll Keep Getting Paid: Forever
Earning Potential for 30 Days Work: Infinite
Ongoing Work Required: Check in occasionally, invest more!

Top 5 Ways To Generate Passive Income

Obviously it is not as simple as snapping the fingers of yours. There’s a little energy involved with creating a passive cash flow stream. But the moment it is established, you will not be asked to do a lot more than collect the cash.

Below are 5 great passive income ideas you are able to apply today to begin making money “in your sleep”:

  1. Blogging. You do not have specific programming expertise to begin a blog and add content to it on a daily or weekly basis. In case you blog about a favorite (i.e., lucrative) subject like individual financial or maybe celebrities, the website of yours could earn a few 100 dollars per month. You may additionally want to try out goods and look at them online. In order to create passive income, you are able to place advertisements on your website through an associate system as Google AdSense. You are able to also make affiliate income by featuring specific items on your site through programs as Amazon or ClickBank Affiliates (depending on the state of yours of residence).
  2. Selling and writing an ebook. Lots of successful business owners create an ebook and get a passive income by offering it online. If you’ve an unique set of skills or maybe degree, you are able to cash in on the knowledge of yours by providing it to others. The ebook of yours could be featured on your own personal website and also the sites of the affiliates of yours. You are able to also produce an online forum for users who have purchased the ebook and would like to find out more; this’s a good way to expose and sell additional “backend” programs associated with the ebook of yours.
  3. Peer-to-peer lending.
    Furthermore, since many stocks do value over time, you’ve the additional benefit of seeing your initial investment money grow.
  4. Buying dividend–bearing stocks. Many publicly traded company stocks pay a monthly or quarterly dividend, providing you with a guaranteed amount of money throughout the year. Some tax-exempt stocks, such as real estate investment trusts (REITs), pay out a good percentage of their earnings through dividends, giving you up to a 35% return on your investment. Additionally, since most stocks do appreciate over time, you have the added benefit of seeing your original investment money grow. You can easily buy dividend-bearing stocks through discount brokers like E-Trade and Ameritrade.
  5. Renting property. With the real estate market still in a monetary slump, you are able to buy and lease out real estate to create a passive income each month through the tenants of yours. It is important you get a great deal on your purchased property without invest extra capital repairing the location up, since will result in a delay in if you really begin earning cash on the investment of yours. When you are able to buy and also lease out a number of properties to trustworthy tenants, you might not actually have to maintain your typical job any longer.

Introduction to Passive Income

Among the easier ways to acquire financial independence is reconfiguring the life of yours so that a sizable portion of your revenue is not intentionally earned by the labor of yours. To do that, it may originate from passive income. The concept of passive income is strongly associated with the Berkshire Hathaway design.

The fundamental concept of passive income is it’s cash received that requires little or maybe no work to be able to sustain the flow of earnings once the original work has been done.

Pensions

A very effective doctor, for instance, or publicist, lawyer, cannot “inventory” the profits of theirs. Although such a profession is able to offer an extremely cozy lifestyle, it involves far in excess of sacrifice unless you genuinely enjoy the day grind of the chosen profession of yours.

Furthermore, when you choose to retire, or end up unable to do the job any more, the income of yours will stop to exist unless you’ve some kind of passive income.

Throughout the career of yours, which of the 2 you focus on will probably depend upon the current financial situation of yours, skills, talents, and personality. The 2 kinds of passive income are:

The perfect to comprehend is a person who takes out sizable bank loans to create an apartment complex or even get rental houses. Even though this can turn a very little amount of equity into a big cash flow stream, it’s not without risk. When making use of borrowed cash, the margin of security is a lot smaller since you cannot absorb the exact same level of setback before defaulting and discovering your sense of balance sheet obliterated.

Yet another example of the very first group of passive income is somebody who has an ownership stake within a working industry like a factory or maybe furniture retailer and also enables the company to issue debt to fund development.

The next group of passive income is making use of sources which don’t need capital to begin, maintain, and expand. These’re much better alternatives for those that wish to begin by themselves and build a fortune out of nothing.

The lawyer or doctor, for example, may use her or the income of his to invest in a healthcare start-up or purchase shares of healthcare companies he understands like Johnson and Johnson. With time, the dynamics of compounding, dollar expense averaging, and reinvesting dividends are able to lead to her or maybe his portfolio generating considerable passive income. The downside is the fact that it is able to take decades to attain enough to actually enhance the standard of yours of living. Nevertheless, it’s nevertheless the surest road to wealth according to the historic performance of company ownership and stocks.

Passive Income and taxes
A significant benefit of earning passive income is it’s commonly taxed more favorably compared to active income. The reason behind the concept is it offers folks an incentive to purchase assets which will help grow the economic system and create jobs.

For example, an entrepreneur that works in the organization she or maybe he founded would need to spend an additional 15.3 % in self employment payroll taxes when compared with a person that just received a passive fascination with an equivalent limited liability company who’d pay only income fees. Put simply, similar income earned actively is taxed at a greater price than in case it had been obtained passively.