How To Make Passive Income Online (3 Business Models) – UPDATED!
I've been building businesses since 2008 and have generated over $5M in earnings. In this post, I’ll distill what I’ve learned into three passive income business models you can choose from.
Today I am going to share with you how to make passive income online, with three specific business models to choose from:
The FP Model: Starting with Active Income
The AA Model: Advertising Your Way to Income
The EP Model: Making Money By Being Expert Enough
But first, something we all know but an important ongoing reminder: The internet is an amazing place, folks! I probably don’t need to tell you there’s more than one way to make money online. And today, I’m going to give you the lowdown on three strategies you can use to do just that!
I’ve built several businesses since 2008 using one or more of these models. I’ve been featured in magazines and articles across the globe, and since I started my journey I’ve generated over $5M in earnings from these businesses. All of my income and expenses for those businesses dating back to October 2008 have been tracked publicly on SPI.com. You can see 10 years of income reports here.
But you don’t have to read all of my income reports to learn how I’ve made these three strategies work for me—or how they can work for you.
In this post, I’ll distill what I’ve learned into three business models you can choose from to decide which path you want to go down.
Those three models are the FP, AA, and EP models.
“But those are just acronyms, Pat! Tell me what they meeeeeaan!”
Fear not. I’ll explain them all, andhelp you figure out which one suits you best.
A Quick Primer on Passive Income
But first, let’s about talk passive income! What is passive income? There are many different definitions out there, but mine goes something like this: Passive income is all about building online businesses that can work for you, that allow you to generate income, and grow and scale, without a real-time presence. In other words, you don’t trade time for money. You build something up front that can continue to work for you over time.
In SPI Podcast Sessions 192, 193, and 194, I go a little deeper on what passive income is, which you can listen to here:
The Smart Passive Income Online Business and Blogging PodcastThe Smart Passive Income Online Business and Blogging Podcast
SPI 192: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 1SPI 192: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 1
How To Make Passive Income Online (3 Business Models) – UPDATED!
I've been building businesses since 2008 and have generated over $5M in earnings. In this post, I’ll distill what I’ve learned into three passive income business models you can choose from.
Today I am going to share with you how to make passive income online, with three specific business models to choose from:
The FP Model: Starting with Active Income
The AA Model: Advertising Your Way to Income
The EP Model: Making Money By Being Expert Enough
But first, something we all know but an important ongoing reminder: The internet is an amazing place, folks! I probably don’t need to tell you there’s more than one way to make money online. And today, I’m going to give you the lowdown on three strategies you can use to do just that!
I’ve built several businesses since 2008 using one or more of these models. I’ve been featured in magazines and articles across the globe, and since I started my journey I’ve generated over $5M in earnings from these businesses. All of my income and expenses for those businesses dating back to October 2008 have been tracked publicly on SPI.com. You can see 10 years of income reports here.
But you don’t have to read all of my income reports to learn how I’ve made these three strategies work for me—or how they can work for you.
In this post, I’ll distill what I’ve learned into three business models you can choose from to decide which path you want to go down.
Those three models are the FP, AA, and EP models.
“But those are just acronyms, Pat! Tell me what they meeeeeaan!”
Fear not. I’ll explain them all, andhelp you figure out which one suits you best.
A Quick Primer on Passive Income
But first, let’s about talk passive income! What is passive income? There are many different definitions out there, but mine goes something like this: Passive income is all about building online businesses that can work for you, that allow you to generate income, and grow and scale, without a real-time presence. In other words, you don’t trade time for money. You build something up front that can continue to work for you over time.
In SPI Podcast Sessions 192, 193, and 194, I go a little deeper on what passive income is, which you can listen to here:
The Smart Passive Income Online Business and Blogging PodcastThe Smart Passive Income Online Business and Blogging Podcast
SPI 192: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 1SPI 192: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 1
The Smart Passive Income Online Business and Blogging PodcastThe Smart Passive Income Online Business and Blogging Podcast
SPI 193: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 2SPI 193: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 2
The Smart Passive Income Online Business and Blogging PodcastThe Smart Passive Income Online Business and Blogging Podcast
SPI 194: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 3SPI 194: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 3
“But Pat,” you might be asking, “is this really possible?” It’s definitely possible. And you don’t need a huge investment, either. Unlike investments such as real estate or stocks, you don’t need a ton of money to start to build something.
But there’s one thing you need to be super clear on. It’s definitely not easy to do. Some people may tell you there’s a magic button or blueprint you can use to get rich, all by doing nothing. Don’t get me started on people who say you can make it happen overnight. No way, no how. It takes a lot of hard work. You’ve got to put in the hours.
You have to work hard now to build assets that will continue to work for you later. But once you start to build that passive income stream, you start to gain a little flexibility and freedom. You have a little more time to do more things, build even more passive income streams—or do fewer things, if that’s what you prefer!
So as I introduce these three business models to you, realize that yes, they all take time, but that time will also be very much worth it.
Cool? Okay, let’s get started.
The FP Model: Starting with Active Income
FP is the Freelance to Productmodel. In this model, you start by freelancing, then you find a problem that can be solved with a product.
Yes, we’re talking about passiveincome. And yes, freelancing is activeincome. So what’s the deal? To be perfectly honest, I believe freelancing is the #1 way to get started a building business of your own. You’ll learn a lot of skills, and you’ll get paid a lot quicker, too. You need some active income first!
But the biggest reason I recommend starting with freelancing is you’ll get to know the industry you’re in really well. You’ll learn it so well, that you’ll be able to find the holes, the opportunities, that allow you to create a successful product-based business.
Let me tell you about my friend Brian Casel. He was a freelance web designer who used to bill all his work by the project and sometimes by the hour; it was all tied to his time. He could only fit in a certain number of projects, and he was basically living project to project. It was not an ideal situation.
Brian had found a huge need for web design in the restaurant and food truck space. After getting tired of working with client after client, he decided to turn his service-based business into a product-based one. He made his services more standardized and productized. He eliminated all his client work and created templates and products to serve that market instead. And it’s been going great for him.
All active businesses can be turned into more passive businesses by using products you’ve already made, by using software to do a lot of the legwork, and even having other humans do some of the work, too.
The AA Model: Advertising Your Way to Income
Next up, I’ll tell you how I made my first bit of passive income in 2008 with business model #2: the AA Model.
AA stands for the Audience and Advertising Model. It’s one of the most-used models for building passive income online—but it does come with a fair number of warnings, which I’ll share with you in a minute.
If you’re a YouTube personality, this is how you generate your income. An amazing example of this how Antonio Centeno got 1 million YouTube subscribers. If you’re a blogger who gets a lot of traffic to your site and uses advertising or sponsorships, then you’re also following the AA Model. Got a podcast with sponsorships? Same deal. I talk about successful podcast sponsorships and other ways to make money podcasting here:
The Smart Passive Income Online Business and Blogging PodcastThe Smart Passive Income Online Business and Blogging Podcast
SPI 193: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 2SPI 193: (Updated Recording) Types of Passive Income Generated Online and What to Expect From Each – Part 2
How To Make Passive Income Online (3 Business Models) – UPDATED!
Reviewed by Unknown
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July 16, 2018
Rating: 5
Reviewed by Unknown
on
July 16, 2018
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