5 Passive Income Ideas That Will Catapult Your Way to Financial Freedom

5 Passive Income Ideas That Will Catapult Your Way to Financial Freedom

I think “passive income” is a misused term in the online community. It’s a concept to make money online.

For instance, a freelance writer who gets paid to write articles online: He’s not generating passive income because he has to keep writing to get paid – yet, he’s making money online.

There are so many ways to make money online, but not all are passive income. If you’re not “making money while you sleep,” then you’re an online employee.

There’s nothing wrong with that, of course – some people would love to work from home. But if you’re pursuing passive income, you should automate your methods – you’re generating income without doing any work.

Before earning passive income, however, you have to put forth the initial effort and be grounded by certain realities (read this article). And the examples in this post are no different.

This post describes five passive income ideas that I believe can make you money while you sleep. These methods are not new — but if you’re pursuing passive income, it will behoove you to apply them in your monetizing strategy.

1) Affiliate Marketing

Basically, as an affiliate of a company or seller, you receive a commission after selling their product or service. But as an affiliate marketeryou are also a salesperson – hence the phrase, “selling other people’s stuff.”

I wanted to get that distinction out of the way because often, salespeople are associated with being sleazy and snake-oiled. But that doesn’t mean you have to follow suit; because, in this business, it’s all about your credibility.

You see, to make money as an affiliate marketer,you not only have to be persuasive but trustworthy.

You can write a compelling review of a product, but if your readers don’t trust you, there won’t be a sale. Trust is so powerful that you don’t even have to put a lot of effort into being persuasive – since they already believe in you.

Now, I’m not advising you to provide low-quality recommendations; but I understand the importance of your credibility.

So how do you build trust? By establishing relationships with your readers and being accountable for your actions. It’s doubtful anyone would part with their hard-earned money on someone they don’t know or find credible. So keep that in mind when promoting your affiliate products.

Speaking of promotion, one of the most popular methods affiliates use is their email list. Promote your affiliate products sparingly, though – as you don’t want to appear ‘spammy’ to your subscribers. That’s an easy way to lose them.

Only make recommendations to your list with the utmost goal of providing value. Keep your mindset on building relationships and helping them with their needs (being earnest in the process) — and not just making money. It’s easier to make a sale in that manner, as opposed to shoving it in their faces every time.

2) Niche-Commerce Sites

These are E-commerce sites that have your affiliate links embedded in them. The most popular one is Amazon Associates. When it comes to promoting physical products, this site is one of the best vehicles.


Because using niche-commerce sites, like Amazon, you cater to a specific customer demographic who is ready to buy. For instance, if your storefront sells Japanese-made tennis rackets, then most of your customers will be the ones specifically searching for these types of items. Your storefront attracts a targeted audience, as opposed to those who are just browsing for information.

The caveat is that it’s a bit more challenging to be persuasive and trustworthy with an E-commerce site since you didn’t build it to create relationships and community – it’s all about selling products.

So, in that case, how do you convince visitors to buy?

Well, the first step is already done for you; since the majority who visit your storefront are those who are looking for that specific item(s) you’re promoting. The only obstacles that keep them from swiping their credit cards are the descriptions and reviews of the item(s) and how well you present them.

Therefore, be as detailed as you can with your product information by providing a story or personal experience in your reviews. Communicate how this product compares to others and why your customers should buy it. This will help them make an informed decision before purchasing – which also allows for future transactions. Repeat business is one of the essences of passive income.

Another element to consider is that, most likely, your customers will gravitate to reviews with higher ratings. But if you’re successful in recommending useful products due to your own experiences and details — even though they’re lower in rating — your customers may still buy it.

So, don’t limit your products to those that only have higher ratings. Sometimes, products receive lower ratings due to price – which shouldn’t be the only factor to find the best item(s). Therefore, always be as detailed as you can and justify your recommendations.

3) Electronic Products and Services

These can take various forms, but are widely popular with products like E-books and video courses. Pursuing passive income through these methods works because the bulk of your effort is in creating these products – afterward, you need to promote them.

You can attract buyers using your strategies as an affiliate marketer, but you’ll gain a wider audience if you create an affiliate program for yourself. This is a great passive income idea because your affiliates are the ones who’ll do the work to drive traffic to your products. Your only responsibility is to make sure they get paid their commission.

The easiest way to create your affiliate program is through a third-party service like Clickbank, which is one of the most popular payment processors and electronic marketplaces on the web. They handle all the “back-end” stuff so that you can focus on the other aspects of your business.

After Clickbank approves your product, they’ll store it in their massive marketplace for other affiliates to see and recommend to others. If they produce a sale, Clickbank handles their commission, and you’ll profit with what’s left.

Simple, right?

Well, in essence, yes. But here are some points to consider if you plan on creating an affiliate program with Clickbank:

1) Clickbank may have a huge marketplace, but because of that, they house a lot of ‘junk’ products as well.

2) Most affiliates are attracted by large commission pay-outs and popularity. Therefore, have a compelling sales letter and apply the max pay-out (75%) to attract more people to market your product for free.

3) Affiliates need to be monitored to prevent shady promotions to ensure you’re still protecting your brand.

4) Clickbank has a one-time activation fee, a pay period fee for sending payments, and transaction fees for each product sold.

Aside from having a fantastic product, the reasons why most E-books in Clickbank sell for at least $39 are to cover the costs of fees and affiliate pay-outs. If it were any cheaper, it’s difficult for the vendor (seller) to make any money.

Nonetheless, people will buy these expensive products if they find them useful. So don’t concern yourself with the price yet. Concentrate on creating a stellar product, persuasive sales copy, then price it for what it’s worth.

4) Sharing Advertising Space

One of the most popular forms to share advertising space is through Google’s AdSense program. You embed a unique code to your site, people click on the ads, and then you receive a commission for every click of that ad. It’s free, easy to set up, and has proven to make serious money – if you have the traffic.

It doesn’t take a lot of effort to slap AdSense code in your site, but you can’t make money without anyone clicking on them either. People are more sophisticated nowadays since they can differentiate between ads and content; they won’t click unless they are attractive enough.

Unfortunately, there’s no way of knowing which ads people will choose to click since it’s dependent on their behavior. Furthermore, you have no control over ad placement. They both are relevant or irrelevant to your site.

This is why you need a lot of traffic to compensate for those who don’t click. Also, non-related ads may serve an audience who stumbled on your site by accident or are just browsing.

But to illustrate an example of how much you can make with AdSense, I’ll use a 1% clickthrough–rate (CTR):

Let’s say a page in your site with AdSense embedded receives 1000 visitors a day. Using the CTR example, 10 of those visitors click on those ads. For each ad clicked, you receive $0.80; therefore, your total revenue for that day is $8.00 – which equates to $240 a month.

Now I know that’s not enough to live on, but it’s essentially passive income – since you didn’t have to do anything else to earn it. If that’s a fixed conversion rate and more visitors click, then it adds up. Realistically though, ad commissions vary, as well as your revenue. But if you have a lot of traffic, you can live off AdSense.

5) Creating Membership Programs

If there’s one passive income idea that genuinely makes money while you sleep, it’s creating membership sites. I have yet to experiment with this type of monetization method, but I’m going to be trying it in the future. It doesn’t take a rocket scientist to know that you can make serious money using this type of business model. Take this for example:

If you charge members $5 a month to download your video course, and there are 10 of them who signed up, then you should be making $50 a month – for as long as they’re members. Now imagine if you have 1000 members. You can do the math.

Now, as always, it’s a straightforward concept; but it’s easier said than done.

For a membership site to be successful, you need to over-deliver your offer without suffocating your customers in the process by creating perceived value.

If your site charges a membership to share and receive information, it must be helpful, essential, and exclusive to those who sign-up. And like I mentioned before, people will pay for anything that fulfills their needs, especially if it’s not shared anywhere else.

Thus, only opening the doors to those who pay adds a level of exclusivity to the information you provide. Sure, you can get similar information for free by doing a Google search; but sometimes, you don’t get quality information from these accessible sources and time is a commodity.

The point is, if you’re thinking of creating your own memberships site, make sure you first garner trust, over-deliver in your offer, and communicate a perceived value on your products. Accomplish all three, and you won’t be pursuing passive income anymore.

You can create a membership site by hiring a programmer to code one for you if you yourself aren’t one, but that can be costly; thus, most people use third-party plugins/services to add this feature to their sites instead. It’s still an investment, but one that can pay itself in the long run.

One of the most popular and reliable membership site platforms to use is Paid Memberships Pro. Some of their features include “content dripping,” which is useful for site courses, or when you want to feed information via a schedule, and “restrict single pages, ” where you can have an option to allow members to pay flat fees instead – to name a few. For more features and information, visit their site here.

Final Thoughts

There are so many ways to make money online, but it’s important to discern which brings passive income and pays you to work online. Should your goal is to work from home, then my hats off to you. That’s quite an accomplishment in itself. The above passive income ideas I mentioned were just some of the most widely-used and effective business models to automate your income. As the internet matures in the coming years, I’m sure the list will grow. Regardless of what monetizing method you decide to use, always provide value. It’s your best move.

Your Turn

I hope this post was enlightening and has provided new insight to your online business endeavors. But as always, I appreciate any input you may have. Do you have any other passive income ideas that I might’ve missed? Please share by commenting below. Thank you!

Photo credits: Background vector created by dooder – www.freepik.com

Pursuing Passive Income: Knowing What You’re Getting Into

Pursuing Passive Income: Knowing What You’re Getting Into

Hello friend, and welcome to my first blog post! My name is Warren, and I’m the founder/creator of this site. I want to start my first post with a short, true story that inspired me to chase the passive income dream.

“The date was November of 2008, and I’m on my second month, serving a seven-month assignment to Iraq. After a long duty day, it was time to relax in my tent, ten of my brothers-in-arms shared. There really wasn’t much to do after the end of our duty day except to workout, eat, and read. Therefore, on this exciting evening, I chose to do some reading. 

I turned to one of my bunkmates (an active stock investor) and asked if I could borrow one of his books. He lent me Robert Kiyosaki’s “Rich Dad, Poor Dad,” which I devoured reading – to say the least. I always wanted to become a business owner. I was fascinated by the notions of escaping the ‘rat race’ and generating cash flow – which was just a couple of the book’s premises. 

After returning home in April of 2009, I started finding ways to emulate Mr. Kiyosaki’s business ideas. It wasn’t until I read Tim Ferriss’s “Four Hour Workweek,” which pretty much gave me the idea to tackle the world of internet marketing. The book encompasses the idea of creating income and enjoying life to its full capacity while not letting work take over. This is why I chose to make a living online since I figured it was the best place to realize that concept. 

And so, my journey began…”

If you haven’t read Robert Kiyosaki’s and Tim Ferriss’s books, then I highly recommend you do – or at least find other sources for inspiration. It’s imperative that you feel inspired when you start an online business because it makes being motivated easier. 

It’s not the only reason, but motivation is an essential element to have if you decide to venture into this competitive environment.

What Passive Income is Not

Although you can be very successful in making a living online, you also need to keep the following points in mind: 

1) It’s not an excuse to be lazy 

Just like in any business, the first few months (or years) are filled with growth-challenges that will require your utmost attention and effort. Because when you finally reach a point of seeing residual income, there’s the possibility of slowing down.

I’m not saying that’s a bad thing, though – you shouldn’t be at a high tempo all the time. Just ensure that your desire and drive to keep your business alive never escapes you. 

If anything, this phase in your business should now be geared towards expansion – whether it’s hiring an employee (or more) or engaging in other online opportunities.

2) It’s not something you can take for granted 

Making money online is a serious business, and it’s not easy to maintain. Don’t come into this thinking you’ll be an overnight success and attain wealth beyond your imagination – by doing less work and being impatient. Yes, you can be wealthy (other people have done it) with the internet. Still, it most definitely will not happen overnight, and with just little effort. Work hard and stay focused.

3) It’s not an escape 

When you start to make a steady stream of passive income, it doesn’t become a ‘set it and forget it’ situation. Because once you become a site owner (or multiple-site owner), seize other online opportunities, and/or add employees to your business, the tendency is to believe it can now run itself.

Unfortunately, that’s farther from the truth.

It’s a good sign to know your business has grown to the point where you’re working less and enjoying life more – that’s the goal, after all. But don’t make the mistake of becoming complacent in the process. It’s still your business, and it still requires your utmost attention. 

Even when you’re enjoying the warm, sandy beach and fresh ocean breeze of an island resort in the Caribbean, you still have responsibilities for what you’ve built. 

It’s a part of you now. 

It’s your livelihood. 

Forget this tip, and your business may soon fail due to the competition. There’s always someone else out there, trying to do things better. Therefore, you need to stay competitive.

Don’t Be Discouraged

The points I just mentioned were some of the realities of making a living online – and they weren’t meant to discourage you in any way. I feel it’s important that, though the rewards of living a financial and stress-free life are enticing, they will not last if this reality disillusions you.

You certainly deserve to enjoy the fruits of your labor and pat yourself in the back for a “job well done” – but also, never forgetting what got you there in the first place. The last thing you want to have happened is to lose your business (or at least have it go downhill) due to laziness, complacency, or being less-driven. 

Don’t forget – you’re not the only ‘Sheriff in town.’ There are thousands of other ‘players’ out there, playing a serious game on a field called – the internet. 

Are you ready to play and win?

Share Your Thoughts

What did you think of my first post? Have you read (or heard of) any of the books I mentioned? If not, what’s inspiring you to venture into this type of business? Do you see yourself becoming one of those online success stories? 

 I’d love to read your comments below, and thanks for sharing!