Passive Income

[HiImJeremy]

G'day!

I'm only really starting in the workforce, but i'd like to learn more about passive income and how to do it. Does anyone have any good information they can offer? Books to read, websites, things like that? Anything like that will be great.

[WarrenG]

Yo Jeremy,

I have a thing about misinterpreting people's avatars, but I have to say I always think you're holding a joint in your picture for some reason!!!

Anyway, passive income.

Tim Ferriss's The Four Hour Work Week is probably the essential read on that topic, as well as his blog. If you haven't heard of him, he's a bit like Steve in that he's a successful and interesting blogger/author, and he's usually interesting to read even if you don't agree with him all the time.

Check out the "Muse examples" and "4-hour case studies" categories on the blog for examples of businesses. The viewpoint there is more about automating or outsourcing as many business processes as possible, so that the actual work you have to do is way down.

Someone will probably mention blogging, but I think T4HWW is a better place to start because the whole blogging/AdSense/Affiliate thing has been tired for a while (although if you're really passionate about a topic and would enjoy writing about it, it's maybe worth a try), and the book and site give lots of other different ideas and ways you can set up automated streams of income (step-by-step).

Personally though, I'd try to think outside the box and look at the next waves, for example, the phone app wave is getting saturated, certainly iPhone but there's probably room in Androids. So if you enjoy programming and problem solving, then that's another option you could look into.

But more generally, look for the next "waves" in terms of technology and how information is transferred between people, and try to catch them while they're just getting going. The annoying thing is I identified such a wave while chatting about this with a friend, and we were really excited, however, neither of use could remember what it was the next day.

But unless I'm sounding like I think I'm an authority, I only earn $150-200 / month from passive income, so maybe I've got it all wrong.

[HiImJeremy]

G'day!

Thanks so much Warren, that is some excellent advice. I will look into this dude for sure.

Also, my Avatar - that is in fact a spoon. lol. On the spoon is some apple pie and a bit of cream - i was almost in tears it was THAT good.

Thanks again! How exciting this all is!

[VinceG]

Passive income... Best way is to write and sell books. Making a Tim Ferriss-style 'muse' is very interesting, but also very hard. I had to read 4 or 5 books before I finally realized that the reason Tim makes it look so easy is because he went to Princeton, and has enormous amounts of energy to just throw into whatever gets in his way.

That said, it's probably much easier to do now than when I first read 4HWW. Your mileage may vary.

[WarrenG]

Originally Posted by VinceG

Passive income... Best way is to write and sell books.

Based on?

Making a Tim Ferriss-style 'muse' is very interesting, but also very hard. I had to read 4 or 5 books before I finally realized that the reason Tim makes it look so easy is because he went to Princeton, and has enormous amounts of energy to just throw into whatever gets in his way.

Oh yeah definitely. He's definitely a really driven guy, and you no way in hell did he reach that level of success on 4 hours per week - but he's setting his sights higher, so if you just want a little passive income then you can do that with proportionately less drive. It's still hard, but worth trying I think.

That said, it's probably much easier to do now than when I first read 4HWW. Your mileage may vary.

And it's easier to do it on your second muse than it is on the first, and on the third compared to the second...

Strangely that's all I can think of as a "Go to" resource on passive income, at least off the top of my head. The rest of my knowledge (such as it is) I think I picked up from various places, so I'd be interested to hear of other resources and books people recommend too.

[VinceG]

Originally Posted by WarrenG

Based on?

Most of the people I know of who are making real passive income are authors. Most of the rest are landlords or other kinds of investors. A select few have online businesses. Landlording is not truly passive, unless you use a management company, which really cuts down on the profits, (you might as well invest the starting capital in stocks) and online businesses often take a long time and a serious act of will before they become truly passive. Tim ran his mind drug outlet for like two years actively before he had a mental breakdown (you'd think his products would've helped him with that! ) and ruthlessly chopped it down to where it would run passively, then took a two week vacation where he did little else but agonize in the back of his mind over whether his baby would still be there when he got back.

Authoring? Hard to beat. Also hard to do, but your work is cut out neatly for you. With business, it isn't.

[VinceG]

Ramit Sethi is also highly skeptical of the idea of passive income. He says most people are just fooling themselves and don't have the skills/dedication required to pull off even the smallest amounts of passive income.

Honestly, the best thing I've ever run across for earning money is the LoA. It works, amazingly.

[WarrenG]

Originally Posted by VinceG

Most of the people I know of who are making real passive income are authors.

Authoring? Hard to beat. Also hard to do, but your work is cut out neatly for you. With business, it isn't.

OK that's interesting, since my first book is coming out soon. Do you know: How many books do these guys have published, and, how much income do they make? How many books do they put out per year?

Honestly, the best thing I've ever run across for earning money is the LoA. It works, amazingly.

Tried it without success. I manifested a spider appear once. But it didn't bite me and give me the proportional strength and agility of a spider, so I'll only call that a partial success.

[WarrenG]

Originally Posted by VinceG

Ramit Sethi is also highly skeptical of the idea of passive income. He says most people are just fooling themselves and don't have the skills/dedication required to pull off even the smallest amounts of passive income.

In my case he's right, financially speaking. If I work out the time I spent doing the work on the online business, versus the passive income I get, I'd have been better off getting a temp job for a few months, then taking the rest of the time off.

That's just the financial side, though. Pursuing the passive income was a very worthwhile experience for me, and I learned things that have led to other opportunities and experiences.

[VinceG]

Originally Posted by WarrenG

OK that's interesting, since my first book is coming out soon. Do you know: How many books do these guys have published, and, how much income do they make? How many books do they put out per year?

No.

[WarrenG]

Originally Posted by VinceG

No.

Can you find out?

[VinceG]

Originally Posted by WarrenG

Can you find out?

Why do you want me to do your research for you? See, this is your whole thing. I don't care about passive income anymore, I use the LoA. I'm just sharing my experiences. One author I know is John T Reed, who has a website at johntreed.com. Another is Steve Pavlina. Another is Jacob Lund Fisker of earlyretirementextreme.com.

It's not hard to find authors. Just find a couple and ask them what their experiences are.

[Shift]

Hey Jeremy,

To use an NLP principle, you want to find a passive incomer and model them. Pay less attention to their techniques and who they know and more attention to how they think and what order they do things in. You might even be curious about their lifestyle, such as diet.

There's a lot of people spinning their tires in the world because they don't know what's important and what's not. Techniques are a dime a dozen. Learning to think in a way that is conductive to making money is priceless.

[Curtis2011]

Here we go again...

[Andrew Brunelle]

What do you love to do? Do it. Find a way to monetize it. The easiest business to start is a web-based business, but it is probably very hard to earn a solid income from it if you don't know what you are doing. Buy some books on the subject and learn about it firsthand. Passive income has many forms, so choose the ones that feel right to you.

[WarrenG]

Originally Posted by VinceG

Why do you want me to do your research for you? See, this is your whole thing. I don't care about passive income anymore, I use the LoA. I'm just sharing my experiences. One author I know is John T Reed, who has a website at johntreed.com. Another is Steve Pavlina. Another is Jacob Lund Fisker of earlyretirementextreme.com.

It's not hard to find authors. Just find a couple and ask them what their experiences are.

Sorry, I misread you as writing "people I know" not "people I know of."

I thought you were talking about friends of yours, not famous bloggers who sell their books through their site. Building a high traffic blog and then selling your book through it is arguably harder than building a high traffic blog and selling affiliate products etc etc. Because you have to make the product yourself.

[Sypyres]

Check this book out "Jeremy".
Moonlighting On The Internet -- Yanik Silver

I have it at home and it's pretty interesting. One of the thing I could highlight is about E-books. It takes way more ($) to go publish a book than doing it online. And this goes for anyone here. Take what you are good at or what you know and write it out. Produce an E-book and sell it online. No, it's not easy as 1,2,3 but worth in the long run. I highly recommend looking into this. BTW, this is not a get rich quick scheme.

[mikethedrummer44]

Originally Posted by Andrew Brunelle

What do you love to do? Do it. Find a way to monetize it.

Only do this if there is a NEED (or better, a DEMAND) in the marketplace for what you love to do.

[pianoperformer]

I'm trying to figure this out too. My only passive income right now is from adsense. My other forms of income are from my training programs that I offer on my Web site mostly, but that's not passive in the least. I'm thinking of writing an eBook, but can't decide on the subject matter.

[lycan]

There is... no... such... thing... as... passive... income...

Take the example of a tree. Does it generate passive income (fruit)? Not really. You have to plant it, nurture it, protect it, etc. And one day, it dies anyway. So what did it provide? It provided an income that was spread out through time. You could have gotten the lump sum and then financed it with the earnings from the tree if you preferred it. Or you could have earned the lumped sum and taken the seasonal earnings out in the form of interest and slowly eat away at your capital in the same way. The income was not passive, it was just paid in installments.

What exists are different levels of productivity for "work". Britney Spears gets a whole bunch of money to show up at a stage and sing. Why? Because her singing is way more productive than the singing of supposedly more "talented" people. She has the marketing capital built over a decade to back her up. Capital is whatever makes your work more productive/easier. You could write a book and earn a ton of royalties from it for decades, or you could write a book and have to beg others to buy it. Don't focus on "passive income", focus on "easy income", meaning, work that is extremely productive.

[HiImJeremy]

Thank You. This is all very helpful!

[VinceG]

Originally Posted by WarrenG

Sorry, I misread you as writing "people I know" not "people I know of."

I thought you were talking about friends of yours, not famous bloggers who sell their books through their site. Building a high traffic blog and then selling your book through it is arguably harder than building a high traffic blog and selling affiliate products etc etc. Because you have to make the product yourself.

I wasn't going to answer this, just let you learn this yourself, but what the hey.

You're being extraordinarily silly. Why are you drawing a distinction between "people I know" and "people I know of"? I've interacted with each of the people I mentioned. I post on and follow the ERE forum, also bought the book. I've purchased Ramit's course and read his blog and subscribe to his email list. I've read all of Reed's articles and had short email exchanges with him. Ditto for Steve. You think just because I don't have coffee with them regularly that I don't know them? I know them better than I know most of my real life friends! None of them write books or put themselves out there to teach and enrich the lives of others.

Then you make statements like "Building a high traffic blog and then selling your book through it is arguably harder than building a high traffic blog and selling affiliate products etc etc." How would you know this? Do you have a high traffic blog? Did you bother asking all of the "people you know of" who do know? You don't have to "arguably" know, you could know "for realz." You're asking me for insights from the "people I know" when all of the answers you seek, all of the advice you need, is right in front of you. You're just failing to take advantage.

[Brutha]

Ditto for Steve. You think just because I don't have coffee with them regularly that I don't know them? I know them better than I know most of my real life friends!

Steve regularly says that people who only interact with him online don't really know him.

[Acting Like Godot]

I am a published author too. Made some money, nothing to shout about. Won't be able to replace my day job, that's for sure.

Now, about books being passive income. Firstly, it generally takes a lot of work and time to write a book (during which time you earn nothing). When finally you get royalties, well, you could say this is "passive income", or you could say that you're getting paid very late, for work dine a long time ago.

Secondly, even after the book is published, the income isn't that passive. You have to put constant effort into marketing the book, keeping the publicity up for as long as you can.

That means things like the book launch; book readings; meet-the-author sessions; blogging about your book; speaking at events; getting interviewed etc.

[mikethedrummer44]

Originally Posted by Acting Like Godot

I am a published author too. Made some money, nothing to shout about. Won't be able to replace my day job, that's for sure.

Now, about books being passive income. Firstly, it generally takes a lot of work and time to write a book (during which time you earn nothing). When finally you get royalties, well, you could say this is "passive income", or you could say that you're getting paid very late, for work dine a long time ago.

Secondly, even after the book is published, the income isn't that passive. You have to put constant effort into marketing the book, keeping the publicity up for as long as you can.

That means things like the book launch; book readings; meet-the-author sessions; blogging about your book; speaking at events; getting interviewed etc.

I think this comment says a lot about all forms of passive money.

If you think passive money is something that'll just be around for you to collect every morning, it's not.

In fact, even the best sources of passive income are usually a bit finicky. Like internet marketing and the stuff taught by site build it.

Sure, if you get a website ranking on the top of the search rankings, you'll be making passive income. But if you're making money on a keyword, that means it's a profitable keyword. Internet marketers are ALWAYS looking for profitable keywords.

Sooner or later, someone else is going to come along and give your nice "passive" website a bit of competition. Bye bye passivity.

Not to mention you have to work your ass off to get to that "passive income" level in the first place.

The most reliable form of passive income I've heard of is earning a large amount of money (usually more than two-three million) and investing it in relatively safe investments to make a small percentage. Since you're playing with a large amount of money, that small percentage is more than enough to live on.

I'm not wealthy enough to fully understand that (yet), though, so maybe someone else will have some better insight.

[lycan]

Originally Posted by mikethedrummer44

The most reliable form of passive income I've heard of is earning a large amount of money (usually more than two-three million) and investing it in relatively safe investments to make a small percentage. Since you're playing with a large amount of money, that small percentage is more than enough to live on.

The trick is getting the 3 million in the first place.

It is also easy to lose 3 million or create the illusion of income due to inflationary losses (you earn interest but the rate of inflation is higher than that, so in fact, you lost wealth and are just slowly eating away at the 3 million). Most "safe" investments amount to government bonds. Government bonds are safe because the government is the one controlling the thing the bonds are denominated in (the central bank can always buy all bonds by printing the required currency). The downside to this is that they can create the illusion of paying interest when they are not, in fact, doing it (they are borrowing at a negative real interest rate, you are in effect paying them to spend your wealth).

[WarrenG]

Originally Posted by VinceG

You're being extraordinarily silly.

Yeah, really helpful comment there Vince. That's going to lead to a productive conversation isn't it?

Why are you drawing a distinction between "people I know" and "people I know of"?

l'll spell it out, since our wires are crossed. I misread your post, and thought you were talking about author friends of yours, people you in regular contact with. I'm a writer myself with my first book coming soon and the contract sat on my desk, and my experiences don't match what you said, so I asked for more info on what they were doing that I'm not. That's why when you didn't know the answers to those questions I asked if you could find out, you know, bring up those questions with next time you see them, or call them etc. Again, not knowing you were talking about big name bloggers that I already knew about.

Then you make statements like "Building a high traffic blog and then selling your book through it is arguably harder than building a high traffic blog and selling affiliate products etc etc." How would you know this?

Well, my logic was this:

1) Building a high traffic blog AND writing a book

is harder than

2) Building a high traffic blog AND signing up to an affiliate program

Because you can sign up to an affiliate program in ten minutes, while writing a book takes longer (although I've read some books that seem to have been written in under 10 minutes).

I said "arguably" because you might do better selling your own product; people might have more trust in something you made rather than something you recommend, and you might push it harder than someone else's product.

But that doesn't necessarily make it the better strategy - the counter point is that you can recommend more products than you can make. Also, books tend to be priced at maybe $20 max for a hardcover, which is a few dollars royalty, and ebooks usually go for $40 tops (I sell one at $30), whereas some affiliate products can give commission much higher than that.

I reckon Steve makes over 100 times more from affiliate sales than book sales, and I don't think his income would be greatly different if he'd recommended another product instead of writing it. (just educated guesses though admittedly)

Do you have a high traffic blog?

Not in my opinion, but others do consider 40k+ views a month to be pretty good. And yes I've sold books I've written through the site, as well testing many affiliate products and other ad programs.

Did you bother asking all of the "people you know of" who do know? You don't have to "arguably" know, you could know "for realz." You're asking me for insights from the "people I know" when all of the answers you seek, all of the advice you need, is right in front of you. You're just failing to take advantage.

That's your assumption. I've been blogging for years, and I've done lots of research into it and the monetisation of it, and I've been in contact with plenty of other bloggers (and web entrepreneurs generally). I ran a mastermind group for a while too. Same goes for authors - when I started writing my book I reached out to lots of authors, and people who ran publishing companies, who I met both in person and online.

The reason I was asking you, as I said, is I thought you were talking about something different to the "create a high traffic blog and monetise it" strategy, the impression I got was of some strategy for book writing primarily, like churning out lots of books or whatever.

[VinceG]

Never will I understand why people with real-world experience in things ask advice from people who don't. I'm shutting up now. You have all the answers you need, and I have none of them. Please just talk to yourself.

[WarrenG]

Originally Posted by VinceG

Never will I understand why people with real-world experience in things ask advice from people who don't. I'm shutting up now. You have all the answers you need, and I have none of them. Please just talk to yourself.

If you'd read my post, you'd know the answer to that, silly. For one thing, your first posts made it sound like you knew what you were talking about. For another, I wasn't asking you for advice. For another, I don't know assume to know everything on the topic, and I thought you were talking about something I didn't know about. Of course I'd want to know more.

[Debo]

I keep hearing that what you love doing and know a lot about you can make a good income from. I worked in the UK for 10 years as a smoking cessation specialist, mainly community groups and one to one sessions, worked my way up, included many natural ways to quit, plus hypnotherapy, then trained other health professionals in smoking cessation, the thing for me is I never got bored with it and enjoyed my job 100% only left because we emigrated and I still tried to do the same job here (OZ) but they didnt want me their loss, so how could I get something going online doing this job and make a living from it? I have thought about it a lot lately, a website? online support network? skype? I dont know but there must be a need for it because my groups were always busy, plus I did have ahigh success rate. ( The smokers did all the hard work, i just guided and supported them)

Debo