Updated: September 7, 2021
Earning a truly passive income is the end goal of the vast majority of internet marketers and you could very easily consider it to be an absolutely ideal situation in terms of finances and business. What is passive income? Simple: it means that you earn money without having to work. That doesn’t mean you haven’t worked for it though – it just means you’ve sewed your seeds so that you can profit long into the future.
In other words, you invest some time and money into setting up a business model that is capable of ‘running itself’ and from then on, you reap the benefits. You might even continue to work on the business model in your spare time to scale it further, or to keep it going, but the point is that you don’t have to actively trade your time for money any more. Once you have a passive business model, you can literally continue to earn money while you’re sleeping.
Working online increases your freedom to a great extent because it allows you to choose how and when you work. But if you’re providing a service to a client, then that’s still not true freedom. At the end of the day, if you take time off, you lose money. And you can still upset your clients and end up losing your means of income. But with passive income, you really do get to experience true freedom.
Now you can choose to take the entire day off, or to refrain from working for the next week even and there will be no repercussions. Want to spend more time with your kids? You can! Want to go for a stroll and feel the sun on your face? You bet! Want to go travelling? Play a computer game? Work on a personal project that means a lot to you? Stay in bed?
I think you’re starting to get the picture…
Using Passive Income to Begin Truly Wealthy
But for many people, passive income goes further than this. For many people, passive income isn’t necessarily about working less but rather it is about increasing their income. More so than any other type of business, a passive income model will allow you to scale. Why? Because if you start earning money that doesn’t require your active input, then there’s no reason that you can’t use your free time to set up another passive income model.
And then another.
And each time you do this, you increase your potential earnings several fold. You can also often increase the earning potential of a passive income model simply by investing more money into it in order to scale it up directly. And the more separate passive income businesses you create, the more resilient your business will become. With ten separate businesses, all running at once, you can consider your income very safe.
It would take multiple businesses all to fail at the same time for you to have any threat of serious financial strain.You can use a passive income to set up multiple businesses then and you can use a passive income model to fund other business plans and thereby ‘bootstrap’ your larger ambitions and projects.
What it’s Like to Have Multiple Passive Income Streams
I’m going to break from convention from a moment and share with you some personal experiences of passive income. One was my friend. Being a very forward thinking guy, he invested a huge amount of time into writing content for a new website he was developing when he finished college in the early 2000s. By the end of one long summer, he’d written hundreds of thousands of words and was able to fill his site as well as posting a ton of content on ‘Ezine Articles’ (not a strategy that would work today).
He ended up landing the number one spot for one of the most popular search terms on the web and then used this position in order to attract a huge amount of traffic to his website. Better yet, he used that position sell Affiliate schemes, including many that offered recurring income. In short, her was earning nearly $100,000 per month by the end of it while not having to put in any subsequent work – except a little maintenance here and there.
He used this money in order to fund the lifestyle he wanted – he bought a house and bought one for his brother and then went travelling. He eventually sold the site for astronomical amounts of money and today lives in Spain with his girlfriend, where they spend most of their time ‘foraging’ (he’s a weird guy, okay?). I have had similar experiences myself. About 6 years ago, I wrote a hit app that sold hundreds of thousands of copies and generated a lot of income. It was nowhere near the success of my friend’s website but was enough to bring in an additional $1,500 per month.
Bearing in mind though that I was already on a very healthy salary, that meant that I was now earning $4K monthly without doing any extra work. I was able to use this money to buy a large house myself, as well as to fund a huge amount of travel and to kit out my home office/gym just the way I always imagined it. And the sense of excitement and pride that came from seeing those numbers start to climb… I can’t tell you how exciting it was.
That app eventually died down but I currently have numerous other continuous income streams. I make money from book sales, from websites, from apps and from my YouTube channel and all of this is on top of the money I earn from my main ‘gig’. The other day one of my videos had a surge and earned me an extra $200 in a day! I did nothing to cause this but that amount of money allowed me to buy a cool monitor set-up without it coming out of my main income (and being tax-deductible means I didn’t pay any tax on it, either!).
Why am I telling you all this? Just to illustrate that there are countless ways you can create a truly passive income and all of them allow you to live the lifestyle you want. It doesn’t necessarily have to mean becoming rich and quitting your day job (although it can), it can simply mean enjoying the success, excitement and reward that comes from beating the system and figuring out a way to literally get money for nothing.