Many readers of Smart Passive Income knows how Pat defines “passive income” – however, I call it side income, as there is still work that is required, albeit sometimes minimal. I don’t disagree with Pat, but I want to highlight that for the same work you put into one “passive income” project, there are many other ways you could spend that same amount of effort to generate income.
What Am I Talking About
I want to remind everyone that there are so many different ways to generate side incomes. For Pat, he has done it three separate ways: he developed and sold a product at Green Exam Academy, he sells affiliate products on Smart Passive Income, and he sells advertising on his niche site Security Guard Training HQ. And that is just what he does online. He also consults, does trainings, and has an iPhone business. So, what I’m getting at is that when you read Pat’s Income Reports, realize that it is a compilation of various side businesses that are all part of the whole.
A Small List of Income Generating Opportunities
If you read Smart Passive Income, you may be like, “Hey, I already know this stuff”. And you may. But maybe there is something here you haven’t thought of. Maybe you will identify a monetization strategy that will work for your current or next side income project.
Here are some basic ways to generate side incomes:
- Create a Product and Sell It
This may be one of the most common forms of generating a side income online. There are many different products out there: eBook, Plugins, courses, applications, subscriptions, even a gadget or item. If you have a niche and a following on your website, this could be a great way to generate a side income. Once you develop your product, your revenue stream becomes passive. You may have upkeep – such as advertising, but not much more once it is developed. Check out Pat’s eBooks the Smart Way for more information on how to develop a killer eBook and sell it.
- Create a Product and License It
This may not be as common, but could be the most lucrative. If you have a great idea, and there is already a strong competitor in your niche, why compete? Why not license them your idea for a cut of the sales? This really makes your income stream from this passive, but requires effort to sell your idea to the company. For more information on licensing, check out Tim Ferriss’ A Beginner’s Guide: How To Rent Your Idea to Fortune 500 Companies.
- Buy a Product and Sell It
This isn’t a passive income strategy, but it is a profitable side income for millions of individuals nationwide. You can buy items for cheap, and resell them for a profit. Look at all the shows on TV now: Pawn Stars, Storage Wars, etc. You can do this too. Check out a side project of mine, My Multiple Incomes, where I share my First Side Business: eBay Success.
- Sell Advertising
This can be a truly passive way to generate income online. Have a niche site, ad AdSense and watch the income stream in. It does require work in developing content, and optimizing for search engines, but once your site is up, you can make a steady passive income stream. You can even automate the ad selling process: read John Chow’s I Make More Money Selling My Own Advertising.
- Sell Affiliate Products
This is probably the second most common way that Pat generates income online, as well as most bloggers in the “Internet Marketing” space. Selling affiliate products is pretty passive, but to get the best results, you usually have to use the product yourself and write a review about how it has helped you do something better. Pat has created 8 Principles for Effective Affiliate Marketing on a Blog, which is a must read for anyone considering selling affiliate products.
This also isn’t passive, but maybe your product isn’t something that you can sell. Maybe your best asset is your own personal skills. Maybe you are a writer or web developer, or graphic artist? Well, there are a lot of easy ways to sell your skills online. You could check out sites such as oDesk, Elance, and Guru, all which cater to freelancers. Want to avoid these sites? Read Ramit Sethi’s Want to Earn More Money? How To Find Your First Clients.
Similar to freelancing, you can put your knowledge to work and consult. Have you become a key player in your niche? Are you getting all types of people asking you questions or advice? Maybe you can monetize this by charging for your time. Pat did it recently, and you can too if you have the right skills.
- Invest for Income
I think a lot of people forget the importance of investing in generating an income stream. You can easily do this by owning a basket of high-quality dividend paying stocks, or a diversified bond portfolio. Each will create a steady stream of income that you can use. Not only can this generate income for you, but you can achieve capital appreciation as well. So, you could take the same time writing, developing a product, etc., or you could spend a little time researching high quality stocks and really earn a passive income.
- Own a Rental Property
This may be out of reach for some, but if you can afford the capital costs, this can be a great side income stream. This is a business, just like any listed above, but it can generate more passive income once the property is purchased and due diligence has been done on tenants. Check out the Financial Samurai’s take on Why Rental Property is a Powerful Asset Class.
The Big Takeaway
What I really want to leave you with is the old saying, “there is more than one way to skin a cat”. In fact, the best way is probably to have a combination of multiple side incomes. I call this income diversity. Just like you would diversify an investment portfolio, you should really consider diversifying your incomes portfolio. This can be achieved by having a day job (salary), a side business (maybe blogging), and maybe you invest for income as well.
Even within each category, you should consider diversifying your income sources. What happens if Google bans your AdSense account, and since you built your entire niche site around that, what would you do? By diversifying, you can protect yourself, and potentially make more money!
Readers, how do you diversify your income? Do you have multiple income streams, or do you plan to?