Welcome to Episode 47 of Praestabilis: Excellence in Marketing.
In Episode 47 I discuss the concept of creating passive income. For over twenty years I worked as a classroom teacher and simultaneously as a real estate broker and residential appraiser. During those years all of my income was active, meaning that I had to be actively present in order to earn money. Passive income is actually “residual” income, and this means that you do the work once and then get paid over and over again for years to come.
Setting up a viable passive income stream is the dream of many small business owners and freelance service providers. This is a system where you don’t have to be there and work every minute for the money you earn. You put in the work to set it up and then, as it runs, you earn. In other words, you don’t just earn money equivalent to the time you put into your work.
My background before coming online was as a classroom teacher and also working part-time as a real estate broker and residential appraiser. No passive income there; if I wasn’t doing the work myself I did not get paid. I did have people who helped me with my real estate business from time to time over the years, but I was hands on with supervising them and their activities at all times. In fact, this actually cost me money over the years because the time I was spending with them was time taken away from my work where I was earning the full amount.
Let’s Get Back to How to Create Passive Income
For example, you’re a content writer and you get paid by the word. This means that if you write a certain number of words, you get a certain number of dollars. The rate you receive might be excellent and your earnings high. But there’s a ceiling that you’ll never break through because even at a good rate, you only have so much time and there’s only so much work you can do.
Or, you write an eBook. You do some background work to create the book, publish it, and advertise it. This includes building a website where people can purchase and download your eBook, and efforts to drive traffic to this site. The site is totally automated. People land there and buy, and the cash rolls in without you doing anything further.
What a Passive Income Isn’t
Unfortunately, there are some widely-believed myths regarding passive incomes as well, so let’s look at what a passive income isn’t.
A passive income isn’t a lazy way to make money. You’re not going to be sitting on a beach sipping a frothy beverage while the money rolls in. There’s work to do to set up a passive stream of income. There may also be some light maintenance. Be prepared to put in this work.
Passive income streams also aren’t just about making money. A passive stream of income can help you deal with economic insecurity. It can give you a “salary” that releases you from having to work for every penny. You can give yourself a financial cushion that allows you time to focus on other aspects of your business.
Ideas for Passive Income Streams
So, how do people create passive incomes? Here are some of the common ways people do this:
eBooks. You can create eBooks and publish them on platforms like Amazon’s KDP (Kindle Direct Publishing) as Kindle downloads or paperback books . You may also use a platform you own and control like I do with Nanacast for most of my products and courses. They can be selling on those platforms (as well as your website) while you take care of other business.
Evergreen Online Courses. Offer online automated courses and webinars. These aren’t live courses, but pre-recorded and automated, and on “evergreen” topics that are always relevant.
Digital Products. Create other types of digital products such as video tutorials and podc...