What Does It Mean To Earn Passive Income

Earning money while sleeping. That’s a dream right there. And you want it bad. Who wouldn’t? If you could do something that you would be earning money while sleeping – that’s magical.

And it will provide you with freedom of unexpected calibre. You would not be working. That’s a relief. So, now you can take an unlimited vacation. Because your business will be running on autopilot. You aren’t even there. But you are reaping benefits every time it gives an output. Take the example of Facebook. Its owner doesn’t do the heavy lifting. She can literally take a month off, and things would run as usual.

There are people hired to take care of everything. She exists for reaping massive payouts and making big decisions.

Those don’t happen all the time. And you can delegate that too. You don’t have to show up at the office. You relax – do whatever you want. And make cash like anything.

At this point, you can travel, do charities and make connections along the way. This is the best way to live life. When you don’t have to worry about getting food on your table. When you can work when you like. Or not. Because those passive checks are rolling in.

As of now, you are probably working in a job which you hate. Or the one where you do lots of other work than you were hired for. This happens way too much. And passive income is something of a distant dream. Maybe if all stars align themselves and almighty is pleased on you. You hope to get there.

But you don’t know-how. Or you are scared. Is it even possible? What if only a handful of people can earn passive incomes. And the rest has to be happy with what they can get.

A paycheck every month – often low compared to the work and talent. And no hope of retirement because saving money isn’t enough.

Of course, you entertain the idea. And sometimes you get on the edge. You see the ‘get rich quick’ schemes. And it’s tempting. Your rational mind keeps saying to you that it is a bad idea. But sometimes you want to dive in because what if it’s a legit thing.

And going on this venture, you have lost money. This is often a reminder that – many people want to get rich, get those passive checks with minimal work. But often they want quick and easy. Clearly, many scammers are fooling because many people are falling for this scam.

Clearly, there has to be something else. Something more or different – which has to be put in to get that passive money. And maybe that’s possible. But it might not be something which you dream of. It can be something totally different than you have any expectation of. Something which requires you to look beyond and do massive work. Are you ready to break your ideas and take in the real pathway to passive income?

Entrepreneur Vs Freelancer

Who you are? Can be a differentiating factor. Entrepreneurs are people who make things which are bigger than themselves. So by definition, they are making a passive income for themselves. For example, if you start a YouTube channel on cooking – then you might succeed or note. But when you open a channel focusing on trending things. Then slowly, your videos will trend. Because that’s how you have been focusing your energy on.

Of course, entrepreneurs fail too. And sometimes it takes a long time. But if you have an entrepreneurial spirit, you can’t do anything else.

Of course, you will have a job to support yourself. Or savings to float you for years. But every now and then, you will think of the business. How to start it, what to do and many times – jump in. You like risks, you like doing many things and pushing the culture forward.

Before you even jump in, you have to find who you are – an entrepreneur or freelancer or someone else. Because that’s how your journey can be defined. Of course, you can jump from one thing to another. But you need to be aware of who you are – at any moment.

So, by definition, – an entrepreneur is making business which will bigger. And often there is an exit plan. So you get loads of cash. Or equity which keeps paying you – passively for years.

What if you don’t have an entrepreneurial spirit – at least right now. And you like to do things with precision. You make money by investing your time and finding clients. You may increase your rate, but you are limited by time. That’s the definition of a freelancer. And it’s fine to be a freelancer. But the question is – can you earn passive income with this journey. And if yes, how?

Yes, freelancers can earn passive income too. But that’s not easy. Because by definition, you have to invest time to earn money.

And chances are you have to change the way you see you being a freelancer. Because once you consider yourself as a personal brand, things change fast. You can earn more money, give more to your clients or fans. And have a large impact on the culture.

You can use your skills as a freelancer and make something which isn’t a business like entrepreneurs do. But something on a small scale. Often, you are still doing everything. But the workings have changed. You work on your own time. And the rewards keep coming in like clockwork. So you would still have to work. But it is more flexible than a freelancer and less worrying than an entrepreneur.

Becoming Personal Brand

You have found that you know and love the software. And you can make software recommendations, try them and give feedback. Over the years, you have found clients who want users like you. Who are smart in the software space, upgraded and have well-thought-out feedback. You earn a lot from this freelance work.

But since this is freelance – if you stop working, you don’t get paid. Also, you have to keep finding clients for your work. Because some do repeat. But it depends on their requirement.

You want passive income. It’s a dream. And since you have already earned your money, you just have to find the way to earn money while not actively working.

Here come the courses and services which you can offer. This is an extension of you as a freelancer. But you are now upgrading yourself. You still want to give software recommendations – but now you are selling them as a service. You craft out a plan, a service to give 2 recommendations per month of general business. And business owners can subscribe to your service. They needn’t actively look for it, it is supposed to enrich them and help them when needed.

Or you can target the software people at companies to use your service. And once you have enough paying clients per month – you need to deliver. But here is the trick.

You aren’t making things for each client. Rather you are profiling and releasing 2 software recommendations per month. And you can make 4, 2 to be scheduled later. Then next month, you don’t have to work, and money will come to your bank account in a passive sense.

Similarly, you can make courses – an end to end thing where you can share your knowledge. It can be suited for software people who want to become like you. So you package everything you know in a course. And then you build up the funnel, attract the people and have people buy the courses. Now, you have already made the course. You don’t have to keep making the course, you can buy ads to make a funnel. And people will end up buying your course. So, you work once and then work little every interval to have sales rolling in.

So, yes, it isn’t like a passive work which is where you sleep, and money keeps coming. But you work less, you can work upfront and often you can take vacations and not worry about money.

When you think of passive income, often you think about living on some beach, far off. And you never come back. And that’s possible. But that’s a difficult thing to do. For that, you need to keep making business – failing and ultimately winning. Or sometimes, you end up failing all the time, and it remains just a dream.

I encourage you to think of passive income as a lifestyle, where your work keeps decreasing. Or you keep taking on new roles. And the system keeps getting automated.

You would need support along the way to help you. And that’s why many beautiful software companies exist. Once you have a good ecosystem coupled with your offering, it all becomes a no-brainer.

Upfront Work

At this point, you are thinking – this isn’t passive income in real sense. You are still doing the work. That’s partly true.

Search the internet on ways to make money online. It’s heavily searched. You will find two types of content available—one which is a legit way to earn money – where you are promised huge money. And after you dive in, you realize there isn’t much money. And you are doing menial works. Which pays cents. And to make a payout, you have to earn hundreds of dollars. That would take months. Which isn’t doing anything to motivate you.

Then they lure you to refer someone. They promise to pay a percentage of your referral’s income to you. Which sounds great. Unless you realize that they will be earning pennies. And most importantly, they would give up just like you. So there starts a chain where you keep referring and new users keep coming in – doing a few days of work. And then giving up. So the companies get their work done. Because you were tricked. And now you are tricking others into joining their shady program.

Even if you work hard for months, it’s not worth the time and energy to get that payout. So, this isn’t a good way to earn money online.

Another thing which you will land upon is the scam websites. Where they offer many variations of the offer. One might offer you tens of thousands of dollars for nothing – just keep investing and refer others.

Some might offer you huge amounts of money, but the work you will do will be illegal. And all sorts of a weird combination.

You might be lured because the money is huge. In every scam, you get looted, and in the end, the only person getting rich passively is the owner of the scam.

This shows how much people like earning passively. Amidst all these garbage, there is a true way to earn money from your work. This is the personal brand way. Where you work hard to get either email subscribers or clients. And over time, you make connections. And then you make courses or services – which you offer them. They support you because the courses are worth it.

This is like a funnel. At the point, you do the outreach. For example, if you are collecting email subscribers, you might be a guest posting. And with each guest post, you will collect certain email subscribers. And all your subscribers will go through the funnel – at the end, they buy the course. Sure, it isn’t exactly – plug and play. But you do the heavy lifting of making course, outreaching and making connections in the beginning. So, you simply write one email every month. And boom, the money rolls in.

To understand this, take Paulo Coelho – the writer. He wrote a massively popular book – Alchemist. That’s his trust. You don’t have to have so much audience to sustain. The connection is there. That’s the heavy lifting. Every year, he writes a new book. And his fans buy them. Boom, you get your paycheck.

You can make this even amazing online when you have your fans direct connection like an email address. So you can sell directly at a premium every year. So you don’t have to sell crazy numbers. A book priced $20 bought by 1000 true fans will give you $20000 income per year.

There are many combinations of this. Of course, you still do the work. But you do the heavy lifting either in the beginning. Or maybe twice in a year And you reap the benefits every month. This is passive income in real sense.

Automatic But There’s Work

Ramit Seth of ‘I Will Teach You To Be Rich’ writes his email. And that’s his major contribution apart from some leadership decisions. Rest of the thing is automatic. Because he has already done heavy lifting like – huge guides, blog posts, and SEO – readers keep coming in.

They go through his funnel. And buy his course. He doesn’t have to write massive guides at the same frequency nor create new courses. He still does that so he can scale the income even more. Because he has hired people. And he is transitioning into a business.

You don’t have to do that if you don’t want to scale as Paul Jarvis does.

Paul has few courses, he opens them twice a year. And it’s enough for him to survive and pay a few freelancers. He has already made the connections, great blog post and outreach. He keeps getting new leads. All he has to do is open up the course every year.

He doesn’t have to make new courses. He just tweaks them for updates information. And that’s his passive income. He can literally drop all other projects and write his Sunday newsletter. And he will keep getting money every time he opens the course. That’s passive income at his finest.

At any point, you can choose to scale or add new projects, but that would mean – active work and uncertainty.

Here is a recap for you to have passive income rolling

  • Find your passion – something which you can do for a long time. And give your twist
  • Cultivate it – hang around different communities. Do the heavy lifting, build your personal brand. Get those email subscribers and fans
  • Do something to keep that connection strong. For example, Seth Godin writers daily. But when he launches a course, everyone flocks. Because he has made those connections and kept them alive. Try weekly blogging
  • Survey your fans – test and come up with an offering – may be a course, sheet or service
  • Now sit back and launch, relaunch with a funnel in place. So you keep getting new fans along the way
  • Congratulations on having your passive income, you earned it