I notice that there is a lot of negativity associated with this topic and it carries a lot of baggage with it.
So today I want to explain, in detail, what passive income is and how I take advantage of passive income opportunities.
How To Make Passive Income
I strongly believe in “passive income”. For the past years I’ve built up passive or leveraged several income businesses.
At the same time, I know that there are a lot of online endeavors that are actually the opposite of passive.
There are quite a few people who talk about this who may not understand the true concept of passive.
This is not the usual B.S. you hear – this is about intentionally setting up your business and products for success.
Generating passive income is not about quitting work or only working 4 hours a week, it is about LEVERAGING YOUR SKILLS AND TIME TO GAIN MAXIMUM IMPACT AND INCOME.
Trading time for money is a bad idea. Let me say that again…
TRADING TIME FOR MONEY IS A BAD IDEA!
In this blog we are going to discuss what passive income truly IS, what it is NOT, and the parts of your current business you can automate to generate passive income.
Furthermore I’m going to walk you through my own passive income “system” also known as a sales funnel.
This funnel automates selling, marketing, sales, pitchin and fulfillment of products.
The goal here is to create systems best suited for you and that will WORK FOR YOU.
The system does the heavy lifting for you; all you need to do is constantly attract new people to the funnel.
PASSIVE INCOME – WHAT IS IT?
- Passive income has nothing to do with the amount of hours you work.
- Passive income is SCALABLE because it allows you to make more sales without you having to work harder. Even with loads of inventory bringing in more sales, that doesn’t translate to more work. I personally believe from experience that this is the only way to create multiple 6-figure businesses as a one-person operation. You won’t have to do more work, regardless if you only sell 5 or 500 copies of your eBook or course.
- With passive income you will have to do the work upfront such as automate the processes, and make continuous revenue day in and day out due to this.
- With passive income you can focus on the fun and creative part of your businesses because the more detailed and time consuming things are automated. With automation you won’t have to send digital files or passwords!
THIS ISN’T PASSIVE INCOME?
While it does provide a lot of freedom, passive income does not mean “set it and forget it”.
You’ll still have to work on your business by getting people to your site and “enter your funnel” ( this could be having them sign up for a free email course, download a video or register for a webinar).
Passive income is NOT totally passive!
Building the products and system that allow you to earn passive income takes a lot of work and discipline.
And often the people who possess the agility and motivation to take on this incredible work typically do not “rest on their laurels” once the money starts rolling in.
A quick important truth: Passive income doesn’t mean you will earn money without doing anything.
Even when you have your systems up and running, you still have to spend time on marketing to reach new audiences and attract new clients.
You also need to take care of customer service which is an ongoing process.
BENEFITS OF PASSIVE INCOME:
I must be honest with you,
The best thing about having several passive income streams is the FREEDOM it gives.
You cannot put a price tag on that. Especially if you are like me and love to travel, go on vacations and visit various places and see different sites.
The truth is being able to say “YES” to new experiences is a magnificent feeling.
Knowing that you have an up and running business that is continuously bringing in income even if you decide to take a break for a month, or visit family or friends or do something out of the ordinary, is just absolutely amazing.
My greatest joy is to be able to work on NEW businesses and NEW exciting projects as soon as the current project is set up and automated.
Building new businesses and working on novel projects is something I enjoy, so automating everything allows me to work on stuff I find interesting.
It also allows me to build up my income.
With passive income it is easy to double or triple your income over time.
This means that if I have a product that generates $5k/month passively, I can create a second product that brings in the same amount of income passively and double my income.
By doing this, I can keep adding “digital assets” to my “portfolio” of products and keep increasing my income without having to do tons of maintenance and work.
BEST PRODUCTS FOR PASSIVE INCOME:
Passive income products come in various types, however, there are two main types that we are going to discuss. These are eBooks and E-Courses (digital downloads and programs).
E-Courses – usually have an open and closed date, can garner lots of sales in a short time after its launch and have the ability to become an evergreen product.
eBooks – income through eBooks are consistent as they are available for sales every day.
Other popular products that you could sell to generate passive income are art prints, photography, digital downloads such as planners, blog themes, templates and physical products that are fulfilled via drop shipping.
MARKETING IS NOT PASSIVE
However, you can automate your marketing activities with these systems.
It is important to remember that although the income generated from the products is passive, the marketing isn’t!
That is why I spend most of the time doing marketing for my business and putting my brand out there.
Since the inventory of my products are “infinite”, my job is to attract as many people as possible to my sites, have them enter my funnel, to the sales pages and turn them into customers.
Even though I use a passive system, I need to put in some time for my business to GROW.
However, if done correctly I can easily take a break, go on a vacation for a couple of months without working at all and everything should continue to run on autopilot and stay steady while my income stays the same.
I really like to implement next-level marketing strategies, and since I run a passive business, this is where I invest most of my time in.
I have tried several marketing approaches, however there are only some that work and produced great results in my experience, and these are:
Often times, online marketers and sellers with humongous platforms don’t have their own, self-created products.
These people tend to make a living by promoting other people’s products to their audience (something I do as well).
Note: Check out this list of My Top Ten Affiliate Programs For Beginners.
Joint venture partners and Affiliates are great because they provide the best way to reach huge diverse audiences without having to work harder on sales and marketing.
Nonetheless, combining affiliates and joint venture launches can be challenging.
This is because working with other people can be difficult.
You need to be extra focused and be quick on your feet. Also, the workload can be a lot more than you anticipate.
Using affiliates is not so much for passive income but more about leverage.
It can put you in front of hundreds of thousands of new people, without having to spend the time building that audience yourself.
I prefer to scale up quickly!
Instead of spending a year growing your own traffic, it is best to just tap into other people’s audiences with a strategic partnership.
This part of my marketing strategy, is truly passive.
Offering a free email course that touches on a specific topic and answers burning questions establishes trust and helps you sell your products passively while people move through your “funnel” (learn how to set yours up here).
In the free email course, I mention my paid course at strategic points throughout the course, adding promotional copy that is jam packed with extremely valuable information.
The email course should provide helpful information however; the last email should be a pitch for the paid course.
This is where people could get more in-depth information and actionable strategies for the topics discussed in the free email course.
With this strategy, my products sell every single day as people go through the free email course and are introduced to my product at the end.
If you haven’t yet created a free email to promote your product, you can give other incentives such as setting up an auto responder sequence.
Include your best articles from the past, some limited time promotions you have for new subscribers or any other helpful incentive.
Remember, when people sign up for your email list, their excitement of you is at its peak, so it is best to communicate with them right away.
In this day and age, webinars have the highest conversion rate, above other marketing strategies.
With Webinars, you can reach up to 10%+ conversion rates if you have a good pitch, a great product and a great audience.
This means that if 100 people signup for your webinar, up to 10 people could purchase immediately at the pitch.
This stands far above every other metric and strategy, even email marketing – which I vouch for all the time.
The combination of high value content, urgency, engagement and the energy of the live webinar, results in a powerful sales strategy.
The beauty about webinars is, once you have a few recorded ones, you can set them up to passively promote and market your products.
If, for example, you do a live webinar where you pitch your signature product at the end, you can record this webinar and use it again as it not only contains valuable information but it also includes your prerecorded pitch.
For people to be able to opt-in for the webinar replay, all you have to do is set up a simple “funnel”.
As soon as they watch the content, they receive valuable information but also become familiar with you and your expertise.
Moreover, you give them the opportunity to immediately make a purchase when you pitch your product after they’ve watched the trainings.
This is like a compressed email course funnel.
This approach is similar to that of offering a free email course. It is passive but highly effective.
People sign up with their email to receive the information given by the free video, replay or training.
They automatically receive access to the video/replay but are also given the opportunity to purchase your paid product.
HOW TO SET UP THE TECH STUFF
When a customer purchases your product, you want it to be automatically fulfilled, not manually.
Choosing Your E-Commerce / Product Selling Solution
You need to have a clear understanding of what you need from a selling platform.
When making this decision, think beyond selling 10-20 e-Books.
Check your solution for:
- Monthly fees vs. % of sales – monthly fees not as expensive as % of sales
- The possibility for affiliate programs with multiple options and tiers
- Automatic digital downloads – takes away the dreaded work of manually and individually emailing the products to each buyer.
You must use SYSTEMS THAT fully AUTOMATE THE selling and fulfillment of your products.
Here’s how I do it:
A plethora of passive income selling systems exists, e.g. a customer purchases a product from you or you having a membership site that followers can pay to get access to your material etc.
If you are simply selling a digitally downloadable product like an eBook, PDF or other file, than all you have to do is set up your store and button and attach a file delivery action to deliver the PDF download.
This is the simplest form of generating passive gains.
A client purchases the product in digital form and immediately gains access to the digital product (you can also deliver videos, .zip files, and more).
THE SIMPLE PASSIVE EMAIL COURSE
If you’re just getting started, I recommend using this system for your first online course.
It is simple and inexpensive to set up. And it’s automated through and through!
STEP 1: Update! We switched to ActiveCampaign. So now we integrate our checkout cart and ActiveCampaign for email courses and it’s SO MUCH EASIER than using MailChimp!
STEP 2: Build out your course content as a “Sequence” in ActiveCampaign. When people are subscribed to the Sequence’s tag it will trigger the email course.
Again, your checkout cart will automatically add people who purchase your product into this list when you set it up during the Store and product set up.
You can set up a welcome email to be delivered immediately once they are subscribed to the list, and then lessons can be delivered every day or once a week.
STEP 3: Create a new product in your checkout cart
STEP 4: Add a delivery file PDF that is a simple “Welcome Packet” explaining how the course is delivered, any passwords or special information, contact info, and product details.
Answer as many potential questions as you can in this document.
The main thing to include is a reminder for people to check their Spam or Promotions tabs in Gmail, as the course emails can end up in there.
STEP 5: Deploy your “Buy Now” buttons and add them to your sales page (I prefer to use the text URLs and add them to my own custom button images).
Now the flow looks like this:
Leads land on your sales page > purchase your product through a checkout page > ActiveCampaign delivers the purchase message, the Welcome Packet PDF file, and automatically puts them on the private “Course List” > this triggers the automation workflow to begin > customer receives the email course automatically on the days that you set up in the workflow.
This is a great way to set up a simple email course.
INCLUDING INSTRUCTION SHEETS
In Step 4 I mentioned adding a welcome packet. This is extremely important.
You need to create a file that answers any and all potential questions that your new customers might have.
When will they receive the first lesson? How long will it be until they get a password? How do they access the course?
Where can they reach you? What should they do if they have a question or are missing a lesson?
This will ultimately make your passive income system even more passive.
You don’t want to be answering a bunch of emails, especially if they are all about the same thing!
So you can continually update and refine your Welcome Packet PDF as you get more common questions.
It’s like a pre-course FAQ and instruction booklet.
You need to send a “thank you” email or welcome packet with further instructions to students.
There might be a week or two between the person registering and the course starting, so it’s helpful to include:
- a list of start dates
- when the lessons are delivered
- how to access the course community
- how to join the live chats or coaching calls
- and trouble-shooting instructions.
Sending this information automatically reduces the need to keep answering the same questions and provides a sense of comfort for the student.
Sometimes, you may even want to include a video tutorial about joining the course, or finding the group forum.
Just like creating products up front and selling them creates passive income, creating these robust FAQ’s and resources for your new students or customers will mean less work for you in customer service hours.
This makes the entire system more passive for you.
Some people don’t read the instructions, but an easy-to-follow welcome package will reduce the email queries you receive.
THE BIG PICTURE:
FROM CASUAL VISITOR TO RAVING CUSTOMER
Okay, there’s a lot going on now! See, I told you passive income wasn’t for the lazy 🙂
So now you’ve got a course or product that’s all set up to be delivered passively. Awesome!
How does all this stuff, you know, fit together?!
- Basically, people enter your “funnel” – meaning your free content, your email course, your autoresponder.
- They are exposed to you multiple times in an automated sequence – they see you on video, get to know you from your emails. They become familiar with you and your expertise.
- Over time, they are pitched your paid product via emails or on webinars. They go to the sales page.
- If they purchase, they are taken into the paid course automation, or delivered the paid product right away via your delivery system.
- Your job becomes getting people to sign up, get into the “top” of your funnel, and start engaging with you and your content.
Traffic > Signs up for your free lead agent > learns a lot and gets to know you > learns about your paid product > begins to trust you > visits sales page > purchases product > receives product or added to automation course > receives lessons.
Note: If you’re looking for more information on a sales funnel solution you might try Russell Brunson’s 30-day free bootcamp. You’ll learn how to setup a funnel and how they work. Sign up HERE.
As your business grows, so will your funnels and passive income systems. You might introduce more complex systems, more customization, and more products.
These days I ONLY do things that can create passive or leveraged income.
I leverag my time to get maximum results with minimal upkeep.
I don’t offer services or coaching, because it just doesn’t make sense to do anything hourly.
And it doesn’t make sense to make things you can only sell once.
I’m all about putting in the work up front, and getting paid for years down the line.
So every day I am either creating or promoting things, not “maintaining” things.
Maintenance is boring and a waste of your creative energy.
Passive Income has also changed the way I think about scaling up.
It’s a lot easier to imagine the possibilities of increasing your income and impact when your products have infinite depth of inventory, and you know that when more people buy, it doesn’t actually create more work for you.
Passive income is real and doable you just have to do it right – learn information – follow sound strategies, take action and BE CONSISTENT.
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It helps a lot.