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(Before Starting Your Passive Income Journey)
Sure, wanting to generate passive income to supplement and maybe even replace your income is all well and good, but before you go all in on your passive income journey, there are some questions that you must answer, so you can set your passive income goals.
For some of these questions, you may have already answered them, but some may be new to you. Sure, you can go in blind—I did that once, and boy was it one hell of a learning experience. But having a plan, or at the very least some kind of framework, will be a huge benefit to you, especially in the long run.
Before we get to the questions and answers, my challenge to you is this: write them down.
Sure, you may already have the ideas in your head, but if you’re about to embark on a passive income journey of your own, having your answers and your goals written out (at any length you like) and easily accessible, will serve as a critical reminder and motivator to get you through those tough days. So get your paper and a pen, or a fresh Scrivener document, and start writing.
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What are your passive income goals?
As I mentioned in my Introduction post (which you should totally give a read), my passive income goal is to generate just $47 dollars a day. That roughs out to about $1,410 per month. But $1,410 a month sounds a lot more intimidating than just $47 a day. That’s one of the primary reasons why I broke it down. $47 a day is a goal that I personally feel is attainable, especially since I’m just starting off on working to supplement my current income with a side hustle that generates income passively (which is unlike the other few side gigs I have as a compiling editor, transcriptionist, and college sports statistician—those are forms of active income generation, where I trade my very valuable hours for dollars).
Now, that daily dollar amount might be too high for some, and it might be way too low for others, but for me, it’s something that I feel comfortable with using as my jumping off point for generating passive income.
But that also brings us right back to one of the best points of passive income, which is that it’s infinitely scalable, once you have all your systems in place. That’s the part that takes the work, but when you have your systems in place, and you can grow your traffic, the possibilities of just how much income you can earn passively are truly endless.
How much money do you want to make in the short term?
To the finer point of generating $47 a day in passive income, specifically, I want to make that much every single day for a year, which will mean that I won’t have to pay my rent out of what I make in my current salary. Also for the short term, I want to make enough passive income that I can also use it to cover my bills and stash away some of that money to invest in both this website and my creative writing website, TheFakeRedhead.com.
For the overflow, I’ll save for retirement or investing, or for travel, maybe even for buying a house (with enough of a down payment that I’m not going to have to be saddled with a mortgage for the next hundred years) or whatever else I can manage to do before I keel over and die. And I want to be able to do a lot.
What about the long term?
For my long term passive income goal, there’s nothing I’d love more than to be able to use passive income to replace my entire salary. Considering how much I’m making at my day-job right now, and how much I know I need to, you know, actually live, I don’t know how long it would take before I could safely step away from working full-time. Certainly more than just $47 a day, but it’s very difficult at this point to come up with an actual, solid number right now.
But I want to eventually have enough money to cover my salary, so that I can replace the time I spend at work with following my true passion, which is writing science fiction novels. I have so many stories locked up in my head, and I want to be able to have time to write them.
If you’re looking to completely replace your salary with passive income, know that it can take a very long time to do. But that shouldn’t mean you should give up if you’re not reaching your passive income goals on the outset. Passive income generation and successful side hustles take a lot of hard work, dedication, and late nights, especially to get up to those high numbers with lots of zeroes trailing off the end. Could you, right now, live comfortably on a side hustle that brings in $4,000 a month? Good. Sure, you want to get to $40,000 a month, but you’re not failing if you’re only at $4,000. It’s still more than you’re at right now. Don’t think of lower numbers as failure. It’s a win, it’s always a win.
Keep at it, and you will find your success.
What do you want that money for?
I’ve answered that question in the points above, but what are YOUR passive income goals? To supplement your current income? To splurge on a copy of Peter Lik’s Equation of Time? To upgrade to a newer car? For the down-payment on a house? A trip around the world? To stash away for the kids’ college funds? To buy a ranch in the hills of Waimea and adopt a million cats? (Oh wow, what an oddly specific dream to have.) To leave your job and continue to grow your online community and live your life on your own terms?
Speaking of the down-payment on a house, more and more lately, I’ve been thinking about investing in real estate. It’s not something I’m remotely ready to dive into right now (see: I need more income before I can even think of that), but having a rental property or two seems like a very interesting, and steady, source of passive income (especially once you pay off that mortgage and can pocket those payments instead). Now, there’s a lot that goes into being a property owner and a property manager that I know I need to do a LOT more research into before I dive in, but I can’t help but think more and more how that might not be a bad idea. Eventually.
It helps that I live basically adjacent to a college town, so—mark this thought down for future adventures.
How will you get it?
Related: Having the right money mindset is critical to earning passive income. In my Required Reading series, I introduce books I have read and loved and highly recommend: Click here and check out my review of Dan Lok’s F.U. Money.
There are countless ways to reach your passive income goals online. If you can dream it, you can do it, but read on for some highlights, some of which you can establish as quickly as…today!
This one is number one, because it is the best way to build and scale whatever successful side hustle you choose. Sure, you can be selling services left and right, but without a blog to go with it (and interaction with the active and wonderful community that blogging comes with), it may feel like you’re shouting to the void, with very little upside. You can start a blog in as quick as 15 minutes and as low as $3.95/month through Siteground, and getting up and running and ready to launch in as little as a few days.
There are a lot of survey sites out there, and I will go over those another time (they’re all worth it, because a majority of them are free to sign up), but one I want to focus on here is Swagbucks. Not only is it a survey site, but Swagbucks ALSO pays out for activities like using their search browser and watching videos. You can also generate bonus points for answering polls and meeting daily and monthly goals, and join contests to win some very valuable gift cards. It’s easy and low key, and you can redeem those points for gift cards to your favorite stores, or just straight-up cash through PayPal. Sign up with my referral link and you’ll get 300 bonus SB!
Running ads on your blog will net you some money, but don’t think you’re going to be making bank on the outset. It’s a supplement, but not what you want to rest your risk on. Honestly, the people who are making enough through running ads on their website to replace their entire incomes, they have more than 300,000 visitors a month. Let’s be honest—that’s not going to happen for everyone, but it’s important to understand that you don’t NEED to have 300,000 visitors a month to have a successful side hustle that makes the money you’re looking to earn. Not sure where to start? The best option for new side hustlers is Google Adsense.
Start A Podcast or YouTube Channel
Similar to running ads on your website, you’re probably not going to make yourself rich by monetizing your Podcast or YouTube channel (#HardTruth). Like running ads on your website, it takes a massive following to truly see significant income through these realms (especially since YouTube recently changed up its monetizing structure), but SOME passive income is always better than no passive income, and diversifying your income streams is key, especially since video getting more and more popular a platform for side hustlers. Not only that, but building trust through video is a great way to get eyes on your blog and whatever you’re pitching there. So, if you’re passionate about YouTube-ing or podcasting, don’t let fear stop you from diving right in.
Create Your Own Online Course
Online courses are a HUGE business right now, and people are making four, five, six figures and beyond by creating a course online and offering it up to their passionate fans. And you can create an online course for ANYTHING. There are courses on blogging, courses on affiliate marketing, courses for learning the finer points of Photoshop, courses on how to play guitar, hell, there are even courses for teaching people how to knit. The sky’s the limit for not just what kind of online course you want to create, but also how much you want to sell it for and if you want to make it evergreen or only open to purchase at certain times a year.
Selling eBooks is another very popular option, because just about everyone has access to some kind of e-reader these days, and eBooks are not difficult at all to create. It takes some time, a little editing, and just a dash of graphic design magic (that you can outsource on the cheap if you’re not comfortable), but you can have your own eBook up and running in as little as a few weekends. The best part: once you do it once, you can sell it as many times as you want. Pick your topic, write about it, determine how you’re going to host it, and go.
I’m currently working on a full-length eBook, The Passive Income Start-Up Guide, which will detail all the ways in which you can implement passive income generating tips as soon as today. Click here to sign up for the email list and get first word on its availability.
While this isn’t the MOST passive, it’s still more passive than less passive. If you’re creative in any way, like art or design or crafting, you can open up an Etsy shop and sell your wares. And you can use your Etsy shop to sell digital products too! That’s passive!
As I said earlier, obviously this isn’t going to apply to most people (even, right now, me), but if you do have extra money lying around, then investing in real estate is a great way to generate passive income. Now, this can entail renting out your home or room on a website like AirBnB or VRBO (which has the lowest access barrier, financially speaking), or this could mean purchasing a property of your own, renting it out, and letting the income you earn from renters cover things like home maintenance and your mortgage. And once that mortgage is paid off, that’s more income that you get to pocket and put into either your future or purchasing more properties to use as rentals.
Did you know that there are people who will pay to have someone sleep in their house while they’re out of own? Now house sitting (or pet sitting), is something I consider “predominantly passive”, because all you’re doing is your normal routine, but at someone else’s house (maybe at the cost of a part of a tank of gas). Thanks to the age of the Internet, you can work on generating passive income, even when you’re getting paid to watch someone else’s tv and maybe raid their fridge for a few days. This one’s got an low threshold for access too, since it’s really about being trustworthy and who you know. Have a friend who travels a lot for work? Ask them to hire you to watch their place while they’re gone.
And much, much more. What are your favorite sources for generating passive income?
How Much Money Do You Have To Spend Now?
This is important, because while it doesn’t take a lot of money to start your online business, it does take some. The old adage, “you have to spend money to make money” rings true not matter what you’re doing. On the positive side, you don’t have to spend much to get started, and especially if you start things off the right way. You can get hosting for as low as $3.95 a month through Siteground. Get started today.
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