Smart passive income–They work 40 weekly hours: they need to cover their expenses and work for another person 8-10 hours a day. They do not choose what to do or when to do it. They have their own business: online and offline business owners work even more. And a long list of possible problems.
What if there was another way to work? A way of working in which time is not the main variable. In which money enters your pocket without even having to attend to it.
This truth also applies to the world of entrepreneurs. For you, a promotion could mean the benefit of earning more by working less. You will tell me that once you earn a certain reputation, you can increase prices without losing sales.
We are always in the same: until you get out of the way of direct income generation of your business. It has a natural ceiling and also the growth that you will experience will be rather slow. Because instead of worrying about generating more income, you will be focused on delivering the services sold to your customers.
What is smart passive income?
Smart passive income is income that is received without the need for your physical presence or direct action. That is, they are revenues that require you to put something in motion and once created generate income almost without having to do anything.
In other words, the smart passive income includes all the income that does not require an active participation of the person, leaving aside portfolio income.
If you are starting with your business or if you already have one in use. The sooner you start thinking about changing your business model to one that requires less time. Before you will reach the grail of financial freedom. And all thanks to the generation of smart passive income.
How to generate smart passive income?
The way to generate this income is so varied that you could create a business list or ideas and it would not stop for days. However, I have decided to collect the 75 best ideas of niches that can generate passive income in a free e book.
Finding an idea to know how to get extra income passively is not easy, no one tells you otherwise. I know more people who have crashed trying than people who have succeeded.
Types of smart passive income
To better understand the model, let’s review the two types of basic passive income. And also a third modality that although it is not technically a passive income. It can become a key strategy to earn more by working less.
It is an income that occurs over time and that comes from work done only once. I give you some examples so that you understand it better:
- An insurance salesman, who receives an annual commission when his client renews the previously acquired policy.
- A direct sales representative who is paid a commission each time his direct customer asks for a product again.
- An aerobics teacher who produces a video that is sold in different gyms. With each sale. It charges commissions.
- A marketing consultant who developed an e book on sales techniques and receives a commission with each copy sold through the Internet.
- A photographer who puts his images in a digital catalog of online sales. Each time a client downloads their photographs, they receive a commission for them.
- The owner of a restaurant or a business, who managed to grow enough to hire a manager who is responsible for taking it forward: he has created it, he has set it up. And now that it works, he places a manager and recovers his time to devote to new projects. The owner can continue to earn a salary, such as consulting / advisory services, and thus have a source of residual income.
Well, you will realize that there are many and very diverse types of activity that can generate a residual income. You may get money for new sales to the same customers as always; it may happen that new clients appear.
But in either case, it is not necessary to be behind the business. Or you can simply demand a small personal contact. As could happen with the insurance salesman, who reminds you once a year to your client about the renewal and asks if he wants to maintain the same coverage.
Notice how this modality of residual income differs from that of recurrent income, which defines what an active income would be.
Recurring income is what demands that you are permanently active, such as consultancy work, graphic design, writing, or any other type of service. You must dedicate hours and hours, day after day, week after week. In order to be able to charge your services to your clients.
- Although this type of income offers you more stability, since you can have a clear visibility of your income in the short / medium term, you have to face working hours.
- You are selling hours for money, and this definitely limits your income to the personal production capacity you have. Your business has a roof: your available hours a week. It also has another negative aspect, if you are sick or on vacation, you no longer generate income.
- In both cases, the only way to leverage your business will be to hire more staff with the consequences this has on the fixed costs of your business. And your personal peace of mind.
The leveraged income allows you to leverage the work of others who generate income for you. Here are some examples of leveraged income:
- The author of an e book that sells your product through an affiliate network that is responsible for promoting it.
- The manager of a sales team that receives commissions for the income generated by the people in his team.
- A contractor that wins with a small margin of work done by subcontractors.
- Launch a franchise of your business model, to allow other entrepreneurs to set it up in your city.
As you can see, here there are also different models for different types of businesses. And notice that the leveraged income can also be residual income. If you achieve the combination of both, you will be on the right track.
Active leveraged income
This is the third alternative I was talking about. Maybe you get a bit out of the smart passive income scheme. Because it demands your participation directly. But it has the good thing that it will allow you to generate more income the more people you attract. In general. It is achieved through convening events.
How to open an online business with passive income
As always I love taking as examples the one-person services businesses. So if you are a designer, programmer, translator, writer, accountant, etc … listen to me well, because I’m going to list 7 very specific options to generate recurring or leveraged income:
Sell your own e book: 100% digital product, online sale 24 * 7, 365 days a year. An ideal complement for a service business. What do the great chefs do in the culinary sector? They write a book, right? Well you copy, write your electronic book. I did it and it was not bad for me.
Launch a community of payment: it is a residual and leveraged income. Set a monthly fee and seek to sell subscriptions. Of course, the value of the services that you are going to provide to this online community is the key when selling your subscriptions. You can check how it works in the Tribe .
Sell templates / tools: designers can easily recycle designs made for a client, and changing the Look & Feel, sell them as templates in online markets dedicated to this topic. Leveraged income.
Sell your developments as a product: the same model as the previous one, but for a developer. There are many content managers – or CMS in English – with enough communities to sell products. Start with WordPress, Joomla and Drupal. Develop a plugin or module, and offer it to the community. You can charge for support or documentation, or have a more advanced version of payment or receive income for more advanced rationalization services. Again, in many cases, if you start a client project with the idea of leveraging your work, it will be much easier to get something out of this strategy. You have thousands of examples in Theme forest.
Online training: another 100% automated leveraged product. Many people are willing to buy online training if it provides immediate value. The fact of being able to train at the time you want when you want is a very tangible benefit. Omar de la Fuentes and his Word Press course with Genesis is a perfect example.
Build an online directory: although currently the large directories seem to have been somewhat obsolete, there are still many poorly covered niches where a directory of offer / demand for employment and advertising will continue to have great value.
Sell your podcasts: an ideal complement to point # 1. You leverage the same content and another format (mp3) and sell it on other channels. The Podcasts are exploding in Spain. Do not waste time while driving the car or doing sports in the gym is becoming fashionable. Think about it, because I have not wasted my time and I’ve already set up mine.
The benefits of smart passive income
Well, and what is good about passive income? Why they so coveted and what are are the reasons why they attract both bloggers? Well for three very simple reasons:
You earn more by working less: no one wants to work 40 hours a day all their lives. If there is a way to earn the same by working half, that will be what we want. And that’s what you get with smart passive income: generate income even if you’re sitting on the couch at home watching TV
Opportunity to create your own lifestyle: be an employee or freelance worker, if you offer services you will be “tied” to schedules, deadlines and clients. With passive income, if you have created them in the right way , you can choose how to live, where to live and what to do with your life. You are not tied to anything or anyone.
Freedom: beyond creating your own lifestyle, passive income gives you the freedom to not have to respond to others except your own customers.
The three benefits are closely related to living without ties and living the life that you really want. There’s no more. Even if you cannot live sitting watching your bank account grow, you can get a freedom that no employee can have.
Do not know what to sell exactly? No problem
Do none of these ideas come close to what you want? No problem, I have a guide with 75 proven market niches so you can choose between 75 options to launch yourself into the 2.0 world.
Now is the time: start generating passive income
If what you want is to earn more money, work less and ensure a good retirement, then it’s time to start creating income channels that do not demand great dedication.
Now is your turn. You have to sit down and start investigating what is the passive income that will allow you to spend more time with your family, take vacations when you want, live in Japan if you feel like it or just sitting around generating income from home without doing “almost” anything.
Are you prepared to abandon the classic 40-hour workweek? “Only” you have to open a business with a future or create a product that generates smart passive income.
The longer you take to create it, the more money you will be losing. Forget about being a slave to your watch and your schedule and start to see how money goes into your pocket without you always having to work.