One of the best things you can do to build future wealth is to develop multiple income streams now. Mostly, ones that require more time than money to create. Most profitable passive income sources demand a lot of your time, however, starting just one revenue stream today could prove highly profitable down the road. I started Valuist without much of a plan or even a consistent publication schedule. But after writing for a while, opportunities to make money started presenting themselves, mostly in the form of well-paid collaborations and consulting. After monetizing Valuist woefully late in the game I am now realizing how important it is to just get started, and I’m excited to explore more of these passive income streams myself.
The easiest ways to earn passive income
1. Create and sell an ebook or other digital product
Writing an ebook or creating a digital product might be the easiest method of earning money while you sleep. The beauty of this model is that once the product is completed you just have to promote it. In fact, promotion is arguably more important than the overall quality of the product. You won’t be able to sell it unless it gets seen by a ton of people. Not that quality isn’t also important, but the truth is that bad books are sold everyday but there are many excellently written ones that never get seen due to bad promotion.
How to write a successful ebook or develop a digital product:
- Write about what you know and write it well, or don’t write at all
Ebooks may be one of the easiest products to create and distribute but if writing isn’t your strong suit, you might want to reconsider writing an entire book. That seems obvious but the quality of ebooks, and ebook writers, definitely vary wildly. Sure you could hire a ghostwriter but it’s more cost effective to create content for a medium that you’re comfortable with. An intriguing video or audio product may be more time consuming to produce but could also prove more accessible and consequently, more profitable.
- Solve a problem
Unless you’re a great novelist – and let’s face it, not many of us are – the easiest way to attract ebook readers is to provide an intelligent solution to a common problem. Sell the dilemma, not a product. Start with any problem you can solve, jot down key topics and outline the structure from there. A lot of work goes into writing and editing an ebook but they don’t have to be nearly as long as books published via the traditional publishing route.
- Promotion is key
In order to promote a digital product like an ebook, ideally you’ll want to pair it with a dedicated, single-page website, that provides prospective readers with a strong incentive to buy. Incorporating a website gives you an easy way to share your product across social media platforms, as well as the ability to attract customers organically through search results.
2. Develop an instructional or educational course
The great thing about creating and selling an educational course online is that you can potentially keep selling it to the same clients. That is, you can offer your course through a subscription model and continuously provide additional content and updates to retain old customers, while simultaneously strengthening your program to attract new buyers faster.
The key to creating a great instructional course online is to:
- Be an expert
You might be able to fake expertise in a pamphlet-sized ebook but don’t expect to attract subscription-paying clients with a half baked course. You have to know what you’re talking about as well as how to present the information cogently to an international customer base.
- Create evergreen content
Focus on creating content that’s going to be relevant forever. That way you can limit the amount of additional work you have to do to keep this income stream flowing. Teaching a commonly studied language is a perfect example of an evergreen topic. When I starting learning Spanish, I first turned to YouTube where I found the channel “Spanish With Paul.” I enjoyed all of his free videos and the free mini courses and later, I purchased his complete course on learning Spanish.
- Make content that’s attractive to a large number of people
Unless you can reach a high-paying, niche customer base, it makes a lot more sense to build courses around topics that have mass appeal.
- Build a solid foundation
Not all experts are great teachers, or know how to create a well structured course. But you don’t really have to be a great teacher to be successful at selling digital products online. You just have to follow one of the many proven models. If you’re having trouble designing your course, get a couple of books on the topic or purchase someone else’s course and note how they present the information, as well as how you could improve it.
- Provide support, updates and bonus content
The only way to retain current users even after they complete your course is to consistently provide them with added value. For instance, you could offer bonus material, provide your course in new formats, improve tests and update your courses each year.
3. Sell advertising space
Whenever and wherever you can draw massive readership, viewers or listeners, you can make a lot of money by serving them ads. Advertising is as old a business as entertaining crowds and though the traditional route can take a lot longer to establish, it’s still one of the most consistently profitable ways to earn income with your content. Once you attain the right amount of traffic at least.
To make money through advertising on a blog, video series or podcast:
- Create a lot of high quality content
Unlike with an ebook, digital product or online course, to earn decent revenue from advertising you have to publish new content on a nearly constant basis. Not just any content, stuff that people want to read, see or listen to – and not just a few people, a huge number of people.
- Draw visitors and entice them to spend a lot of time on your platform
It doesn’t matter how good your content is if no one is seeing it. One of the best ways to promote a website is by establishing an active social media presence. And if you’re producing clear and engaging content on a consistent basis your website will eventually become more visible in search engines as well. Create reasons for visitors to stay on your website by reminding them of your other content with internal links and plugins displaying your other posts.
- Target your users with relevant advertising
Your ads have to be relevant to your audience or your click-through rate – the number of people that actually click on an ad – will be abysmal. In order to figure out who your target audience is, you can analyze your web traffic to discover where your visitors live, how long they stay on your site and what kind of content they are drawn to. Luckily many ad companies now use keywords from your website, or cookies that track user interests, to target relevant traffic.
- Analyze your results
There are a lot of ways that you can improve the results of your advertising, far too many to attempt to cover here. The important thing though, is that you don’t settle for your initial results. Experiment with ads in a variety formats, in various places to see what proves most effective.
4. Do affiliate marketing to supercharge your profits-per-conversion
Affiliate marketing is also a form of advertising of course, but it’s closer to a partnership than the traditional advertising model. You also get a much bigger slice of the conversions (sales) that come from your sources. Though with typical advertising on a website you are paid a tiny amount when an ad is seen and a little more when ads are clicked on, affiliate advertisements often pay out high amounts when your traffic leads to sales.
Some of the benefits of affiliate marketing:
- You don’t necessarily need a platform like a blog, podcast of YouTube page
Affiliate links can be provided to end-users in a number of interesting ways, such as through your social media channels, email campaigns or even offline.
- Affiliate marketing pays a much higher rate per conversion
If just one person clicks on your affiliate link and ends up purchasing the product, payouts vary, but are often between $20 – $150. Obviously the more traffic you can draw, the better your chances of converting visitors to customers for an affiliate, so it’s wise to do affiliate marketing in tandem with other advertising efforts.
5. Investing is the easiest way to earn additional income
You probably saw this one coming. The easiest way to earn money while you sleep is to simply invest wisely. Though nearly every other option we’ve discussed so far requires more dedication of time than money, to unlock the incredible power of compounding returns you need to invest a lot of money over a long time. Investing throughout your career, specifically in equities, accomplishes several goals at once: It provides you with a nest egg for the future, allows you to earn supplemental income without doing any work (beyond what you had to do to earn the money) and teaches you discipline.
Of course you don’t have to invest in stocks and bonds, you could invest in real estate or something else, but for my money index fund investing is about the easiest risk-adjusted return out there. I often make several hundred dollars a day, at least on paper, just based on a small jump in share price. However, as with all things, stock investing isn’t perfect, it’s also not unusual to lose several hundred to several thousand dollars a day when prices drop. Conversely, however, those market corrections provide an opportunity to make a lot of money
Unlike creating a digital product, there is a lot of risk involved in investing. For instance, if you sell during a market crash, you could decimate years of returns and end up with far less than what you started with. Also, if you invest in individual stocks there’s a chance that the company goes bankrupt and you lose your investment. Therefore it’s wise to determine your ideal asset allocation and learn as much as you can before you get started (Valuist is not a bad place to start!)