Ah, those two magical words that sound so sweet, and yet are so hard to achieve…
Passive income is everyone’s dream scenario. We are free to pursue our life’s passions – whether that is traveling the world, pursuing a hobby, or spending time with our family – while money continues to roll in day in and day out.
What a wonderful fantasy.
But it doesn’t just have to be a fantasy. With the right knowledge and some hard work upfront, I truly believe that anyone can achieve the passive income lifestyle. Here are three concepts that will set you on the path towards sitting back, relaxing, and watching the money roll in.
The Power Of A Sales Platform
The single best way to guarantee yourself a good long-term income is to build a sales platform.
At the end of the day, a platform is simply a brand. You have built up trust with a group of individuals, and you are ideally positioned to leverage that trust into sales of a product. This “trust” can take many forms; here are a couple of examples:
A blog: In the last five years, blogging has evolved from a casual hobby to a serious business. There are many bloggers who make well over six figures from their blogs…and almost none of this revenue is from advertising.
Instead, bloggers use their brand to create their own line of products. One good example is Yaro Starak. Five years ago, Yaro was, in his own words, “barely making enough money to live independently.” Today, he uses his blog to market his line of high-margin information products…which generate more than $500,000 per year in revenue.
A book of clients: My friend’s father is a partner at a prestigious management consulting firm. He clears seven figures each year, and amazingly he does this without scrounging up very much new business.
Instead, he uses his existing book of clients for repeat consulting engagements. This client roster is more than large enough to keep him busy, and allows him to charge a very healthy hourly rate.
Of course, it took him years to build these relationships, but they will continue to pay out for years to come.
But be careful – you don’t want to make a quick buck at the expense of burning some bridges. It’s important to understand your audience and sell them products that they genuinely want, which leads me to…
Affilate Marketing is probably the single best way to generate recurring revenue. The idea is simple: find a bunch of “affiliates” and pay them commissions for selling your product for you.
For example, let’s say I’m selling a piece of software for $100. I can offer affiliates a commission of 20% for each sale. Every time they sell my product, I get paid $80 and they get paid $20.
The key to successful affiliate development is to find people who have relationships with potential customers. When best-selling author Tim Ferriss was building his first health supplements company, he reached out to affiliates who had blogs, e-mail lists, and other channels to reach customers. Within a year, Tim had an army of salespeople who were generating recurring revenue without any upfront cost.
The best part about this system is that negative cash flow is almost impossible. You don’t pay money unless your product sells.
The Value Of An Evergreen Product
An Evergreen product is something that is needed no matter what. Evergreen products are good business because they will continue to sell for a long period of time.
Examples of evergreen products:
The Snuggie: Some people might say the Snuggie is a fad. I disagree. I own a Snuggie, and it’s something that I will continue to use for a long time. Once it’s worn out, I’ll probably buy another one. I’ve written before about how the Snuggie is marketed brilliantly, but at the end of the day, it’s still a product that I find useful.
Ramit Sethi’s Earn1k: Everyone wants to earn more money. This will not change in the future. In the Earn1K, Ramit walks students through a step-by-step process to earn their first $1,000 as a freelancer. Ramit’s product is expensive, but it will continue to sell because it fills an ongoing need.
Dean Graziosi’s “Make Money In Real Estate.” People will always need property. Sure, there will be bubbles and busts, but there will always be a market for homes and apartments. In his course, Dean teaches people exactly how they can generate lots of money from real estate investment. Here's the thing: most people will never successfully act on this advice,