There are many ways to build a passive income. Among the most popular, historically, have been investing in a certain portfolio and letting compound interest grow that money and buying and renting properties.
But as social media and platforms like YouTube grow in popularity, many content creators are learning that they can reap the rewards of passive income themselves. Some make money selling pre-recorded classes online, for example, others earn ad revenue on their podcasts and YouTube videos, and still others make money through their blog or TikTok affiliates.
Sometimes the passive income these creators generate is big enough to quit their day jobs entirely.
If you’re interested in starting to earn passive income and someday even quit your job, here are three tips from entrepreneurs who earn thousands, or even tens of thousands, of dollars in passive income per month.
Sell an existing skill to supplement your income
Graham Cochrane, 38, was working as a full-time music producer trying to make ends meet when he started his blog and YouTube channel, The Recording Revolution. Initially, the idea was to share his knowledge of music and attract more clients to his production business. But he quickly realized that they were both vehicles for making money. Today, that business grosses $40,000 per month in passive income.
When it comes to starting your own passive income stream, Cochrane recommends building on the skills and knowledge you already have.
“The turning point for me was when I had the idea to turn my audio recording and mixing knowledge into an online course,” he recently told CNBC Make It. Selling digital products based on that “provided an income stream liabilities and allowed me to earn much more money in a day, spending less time, than when I was self-employed.
After many years of growing his online business, Cochrane has a second online course business dedicated to teaching people how to monetize what they know and are passionate about. That generates $120,000 in gross sales and passive income per month.
Within just a few years, he began to scale back music production. He now works only 5 hours a week on his online businesses.
Lean on how others have found success to grow
Shannon Smith, 24, was laid off from her waitressing job at the start of the pandemic and spent months trying to figure out how to make up for lost income. At first, she worked about 10 hours a day as a physical trainer. In July 2021, she started making TikTok and Instagram videos to teach people how to build wealth and business online. She now earns around $8,000 per month in passive income through affiliate marketing.
“I see a lot of people trying too hard to completely reinvent the wheel with social media posts to put their business in the spotlight,” he recently told CNBC Make It. But “I’ve learned that the key to going viral and increasing your audience is to study what works for others,” he said.
Once you’ve found the niche topics you want to discuss in your content, Smith recommends studying the conversations people are having around you and expanding on them. What questions keep coming up around you? He also recommends paying attention to what your successful competitors are doing with their content. Are they talking to the camera? Do you use long subtitles? And don’t forget to use the relevant hashtags you see appearing on your platform.
Smith no longer works as a fitness instructor and spends just two hours a day on her online business.
Diversify your income streams to make it easier to quit
Michelle Schroeder-Gardner, 33, started her blog, Making Sense of Cents, in 2011 to track her college loan repayment progress while working full-time as a financial analyst. She now earns an average of $760,000 per year in passive income thanks to this, having expanded her coverage to include investment advice and financial products.
Michelle Schroeder-Gardner quit her job in 2013 to work full time on her Making Sense of Cents blog.
Photo: Sydney Hampton Photography
Source: www.cnbc.com