How to Create an Online Passive Income Stream

Passive income is the Holy Grail of all the ways to make money.  Just the concept alone brings to mind the image of sipping margaritas on an exotic beach, while cash swiftly accumulates in your bank account.  It seems like everyone wants a piece of the passive income pie.  Just turn on a television late at night and I guarantee you’ll find at least one “foolproof” system for making easy money.

The question is can you earn a passive income?  I believe you can.  That’s because for the 18 months I’ve been living off the revenue streams I created over two years ago.  The problem is a lot of folks have a misguided notion about passive income.  They think it doesn’t involve effort.  The truth is it is possible to build a passive income stream but you have to be willing to work hard to set it up.

Today we’re going to talk about how to create a passive income stream.  Specifically we’re going to discuss how to use the Internet to set up revenue that’s practically automatic.  So with that in mind, let me first clear up two myths…

Myth #1- Passive Income Requires ZERO Effort

This one always pisses me off.  For a lack of a better term, the world is full of predators ready to take advantage of your gullibility.  They use words like easy, simple, and automatic to convince you that it’s easy to make money on the Internet.  Even worse, they make you believe that passive income requires zero effort.  Like all you have to do is press a few buttons and WHAMO money flies into your bank account.

Repeat after me …

“There is no such thing as 100% passive income”

Yes, at this point I have an income that’s virtually automatic.  But it took over 3 years to get to this point.  During this time I spent many weeks working 50+ hour weeks – More than what most people do in their “full-time” jobs.  My point is you should forget the notion that passive income requires no work.  If you want money, then roll up your sleeves and go get it!

Myth #2- Full-Time Income = Full-Time Work

Next, I want to dispel the myth of working full-time to earn a full-time income.  Right now, I spend an average of five hours a week on the activities that add up to a wage that’s better than your average American.  This is good news because at the end of the rainbow of all your hard work is that period when you can sit back and enjoy the fruits of your labor.

It’s time to eradicate the idea that you need to work full-time in order to feel fulfilled.  I’ve spent the last seven months traveling and working very little.  But once I get home (today actually), I’ll be working at least 40 hours a week.  My point is I work hard when I want to work hard.  And I slack off when I feel like it.   The effort I expend isn’t tied to another person’s preconceived notion of how much time I should spend on a business.  Instead I’ve decided that my life will be separated into periods of serious effort coupled with times where I relax.

Now that we’ve dispelled those two myths, let’s get to how you can set up a passive income stream…

Step 1: Find a Way to Make Money

There are dozens, even hundreds, of ways to make money on the Internet.  Your goal is to find one that can be automated.  I’m sure you can earn a great living by being a freelance writer.  However I wouldn’t choose this method because this income is directly tied to the amount you work.  This type of job will never be considered passive because you need to expend effort in order to generate an income.

The secret to passive income is to build something one time and then use it to make an automated income.  This can be done in a variety of methods:

  • Affiliate marketing (This link has a step-by-step blueprint on how to build a successful affiliate business)
  • Create a high-trafficked website and monetize it through advertising
  • Build a series of niche specific businesses that focus on Google Adsense
  • Write an information product or eBook
  • Buy underutilized domains, improve them, and then flip these sites for a profit

As said before, you’ll have to work on each of these businesses.  However these can all be considered passive because they can easily become automated.  The litmus test is if you’re working full-time with no break in the foreseeable future, then it’s not called passive income, it’s called being self-employed.  See the difference?

Unfortunately I can’t tell you what business is best for you.  Although I personally use affiliate marketing and information products, I don’t think it would be fair to push you in any particular direction.  What you create has to come from within.  I recommend researching the best models for making money on the Internet and then starting a business that fits best with your lifestyle.

Don’t get sucked in by the “Internet marketing gurus” who promise an easy system for making money – Instead brainstorm/mind-map a system that’s simple to follow.  My rule of thumb is if you can explain a business model on a small piece of paper then it’ll probably work.  On the other hand, if can’t clearly describe how you’ll generate an income then this business is doomed to fail.

Okay, now it’s time to roll up your sleeves and get to work…

Step 2- Create Your Money-Making Mechanism

In order to make money you have to create what’s called an “offer.”  This is something of value that people want.  The nature of the offer depends on the business model you choose. For instance, you’ll need to do the following for these types of online businesses:

  • Write an eBook and then build an affiliate program to promote it
  • Develop a website/blog that takes advantage of search engine traffic
  • Create a free report, landing page, and autoresponder sequence that promotes affiliate products
  • Build a series of niche-specific websites that earn money from Google Adsense

This might seem like a repeat of the previous step.  Actually this is the step of the process where you get to work.  I know it’s not going to be easy.  But you’ll be surprised at what you can accomplish if you dedicate a few hours each day towards building a sustainable Internet business.

Obviously this step is going to take awhile.   Once it’s completed, you’re ready to move on to the third step…

Step 3- Generate Leads for your Online Business

This is the step where most online businesses fail.   It’s not that hard to create an offer that makes money but it’s really challenging to get people to notice it.  The fact is lead generation is the most important step in this entire process.  It’s like being a salesperson… If you’re not cold-calling or networking then you’re not going to succeed.

In terms of an online business you do lead generation by directing web traffic to an offer.  Some businesses (like my affiliate marketing site) only require a few hundred visitors a day.  Others (like most Google Adsense sites) need thousands of people a day in order to turn a sizeable profit.

I can’t underemphasize the importance of web traffic.  It really is the lifeblood of any Internet business.  That’s why it’s important to spend time during the planning phase on how you’re going to generate leads for your website.  Some of the techniques should include:

  • Implementing Search Engine Optimization (SEO)
  • Building a social media presence
  • Using pay-per-click (PPC) advertising
  • Running an affiliate program
  • Creating videos on YouTube
  • Writing eZine articles
  • Buying advertising on email lists
  • Networking and partnering with other sites

Each of these methods requires an in-depth explanation that can’t be covered here.  So again, I put it to you to research the pros and cons of each.  I can say that each of these methods has been successfully used by an Internet entrepreneur to build a solid passive income stream.  Get the facts first and then try them out for yourself!

After setting up your sources of traffic it’s time to follow-up with the people visiting your online business…

Step 4- Following Up with Prospects

It’s been said by many experts that it takes over seven exposures to a marketing message before a person will make a purchasing decision.  I don’t really know if is true or not.  What I will say is you can skyrocket the success of an online business by getting people on an email list.

The best Internet marketing businesses have email lists.  This is a group of prospects that can be contacted on a regular basis.  Even if you’re not sending them an offer, it’s important to correspond on a consistent basis because this builds authority and trust.  This list will be one of your most important assets.  You can literally write an email in an hour and use it to make thousands of dollars.  Powerful stuff, right?

How do you entice people to join an email list?  I’ve found the best way is to offer a lead magnet.  This is a valuable piece of content, given away for free, in exchange for getting a prospect’s contact information.    You earn an income by providing great value on a regular basis and then mixing in the occasional offer that makes you money.

Also, it’s important to contact your list on a regular basis.  I don’t mean pitching offer after offer.  Instead be that one person who consistently sends useful content.  Then when you make an offer people will buy from you because they’ve grown to trust your recommendations.

You might wonder what program to use.  I personally recommend the Aweber email marketing system.  I know it’s tempting to save money by using a freebie program.  I think this is the worst mistake you can make.  Most of the free email marketing programs are filled with advertisements and usually your emails aren’t delivered to the recipient.  So basically you’re losing money every time the ‘send’ button is selected.

Finally I think it’s important to build a solid autoresponder sequence in your Aweber account.   Initially you’ll want to send over 90% of pure content that’s helpful to the reader.  Then once trust has been build you can drop this down to 70% to 80% with the rest centered around promoting a product that helps people on your list while earning you some money.  Which leads us to…

Step 5- Automate, Automate, Automate!

Okay, the previous four steps were all about working hard.  Now let’s talk about removing yourself as a cog in the machine.  In other words, how you can automate this online business and turn it into a legitimate source of passive income.

I have to say automation is a beautiful thing.  There are many days when I haven’t even looked at a computer – Yet I’ll earn $400 to $500.  It’s a great feeling to spend a day traveling and then login to my Clickbank to see how much money I’ve made while having fun.

The question is how do you automate an online business?  Well, that really depends on the nature of the site(s) you’ve built.  Some can easily be automated, while others require a good plan and a lot of work.  To give you an idea of what I mean, here are three different ways you can automate an online business:

#1- Run an Affiliate Program-If you own an info product then an affiliate program is a great mechanism for creating automated, passive income.  Your job is to recruit people to promote your eBook by providing an excellent commission rate supported by top-notch sales tools and an email sequence that teaches them how to make money.

A lot of affiliates don’t know how to get started with a product.  By providing a step-by-step blueprint you’ll give these people special knowledge most other product owners won’t reveal.  The upshot is this empowers many affiliates to take action and promote your eBook.  What’s cool about this technique is it doesn’t require much “hands-on” work.  Basically you set up an affiliate program one time and others do the hard work.

#2- Manage an Email List- With this technique I recommend directing all web traffic to a landing page and getting people to subscribe an email list.  The automated part happens when you set up a series of autoresponders.  The members of your list will receive emails in a timed sequence that is a mix of quality content and direct sales messages.  All you have to do is write these emails one time.  The rest is handled by your email marketing program.

This technique works even if you have a content site – Specifically online destinations that are monetized through advertising like Google Adsense.

Again, all you have to do is get people onto an email list and set up a series of autoresponders.   The only difference is every email will be a teaser of the content that’s on your site.

In theory, subscribers follow the hyperlink and then click on the advertising you’ve embedded in the content.  Email marketing works well with Google Adsense because you can keep earning money from the people on your list because they’ll continue to click on your money-making ads.

#3- Search Engine Optimization- The third technique takes advantage of Search Engine Optimization (SEO).  It’s easy to make money when you have a site gets a lot of organic traffic from Google.  To monetize this technique you need to offer a product/service that specifically solves a problem people are looking to solve.

I’m definitely not an expert in SEO.  But I’ve learned that search engines love sites that are filled with quality content.  When you build a site that ranks well for thousands of keywords, it becomes easier to turn this into a passive source of income.  All you have to really to is monitor traffic stats and make sure money is coming in.

Furthermore, it’s important to continue to add content.  This can be done by creating it yourself.  Or automate the process by hiring an outsourcer to post articles to the site.  They get paid to create content, while you get to enjoy the fruits of their labor.

Now… I just gave three ways to automate the process of making money.  Obviously this won’t happen overnight.  In all likelihood you’ll need to work for months, even years to put your business on autopilot.  Eventually though, the business will become automated and you can let it run on its own.  However, there is one major obstacle that you will encounter at this point…

The Dreaded Product Life Cycle (PLC)

Every business has what’s known as a “product life cycle.”  Without going into a long-winded explanation, a PLC has four major phases:

1)      Market introduction stage

2)      Growth stage

3)      Maturity stage

4)      Saturation and decline stage

What does this mean for your passive income business?  To put it succinctly, you’re either growing or you’re dying.  Sure, it’s fun to go off and enjoy the proceeds of a business.  But eventually an outside factor will decrease your profits.  On a long enough timeline this money will go away forever.

The harsh truth is there are a lot of things that could happen to eliminate this income.  Your traffic sources could dry up.  Google PPC could delete your account.  Affiliates start promoting a competitor’s product.  Basically anything could happen.  And the sad thing is you won’t really know what will go wrong – Until it’s too late.

While I do believe in the power of passive income, I’m also a realist.  You can’t ignore an online business indefinitely.  Eventually you have to invest time into it or expect that the money will one day disappear.  That’s why stress the importance of what I call “growth activities.”  These are things that you (or an outsource worker) do on a regular basis to prevent the fourth phase of the product life cycle.

What does a growth activity include?  This could be any (or all) of the following:

  • Networking with other online business owners
  • Creating more traffic to your site
  • Expanding/Retooling your PPC advertisements
  • Writing more ezine articles
  • Adding additional content to your site
  • Recruiting more affiliates for your information product

Like I’ve mentioned in other sections, a growth activity really depends on the nature of your passive income.  The rule of thumb is to do a 80/20 analysis of your business, find what works the best, and then make 100% certain you always continue these activities.

Final Thoughts on Creating Passive Income

The world is full of passive income opportunities – Especially when it comes to the Internet.

While I’ve only covered a few techniques, there are a lot more out there.  My advice is to take action right now.  If you’re not working on building an online business that makes you money then it’s time to start.

Do independent research.  Find a business model that works best for your situation.  Buy the best product that teaches this technique.  And then don’t stop till the money comes rolling in.

I know this sounds like a simplistic overview of what’s like to make money on the Internet.  But this is the exact process I followed in late 2006.  I found the best course that taught affiliate marketing , studied the lessons, and then worked my butt off till I was making a full-time income.  It wasn’t easy.  In fact, I spent many nights worried that I was making the right decision.  However my dedication has been rewarded because for the last seven months I’ve earned money while traveling through Europe.

Well, this has been a pretty long post about creating a source of online passive income.  I did my best to cover all you’ll need to do to get started.  Now, I’d like to know your thoughts.

In the comment box below, let me know what steps you’ve taken (or you’re taking) to create passive income in your own life.

Take Action. Get Results.

48 thoughts on “How to Create an Online Passive Income Stream”

  1. Fantastic post, Scott!

    Despite having only a year of blogging experience under your belt, right now I probably visit your blog more than visit others. This is because you’ve progressed so fast, you provide quality content, and you’re not just some automated robot (you’re actually a really kind human being).

    I’ve noticed the importance of getting a list of contacts. I might not have too many subscribers to my blog, but I’ve increased Twitter followers and therefore increased traffic.

    A quick question:

    ‘I found the best course that taught affiliate marketing , studied the lessons, and then worked my butt off till I was making a full-time income.’
    I understand you’re also educating your brother and he’s making great progress too (and he’s working very hard!)

    Which course did you find?

    Keep up the amazing work, Scott 🙂

    • David,

      Thanks for he kind words. I do try to come off as a “real” person rather than just a regurgitator of facts.

      Building a nice Twitter follower list is a very essential part of the equation. Particularly if you also make an effort to have a real connection with a lot of them (something I need to do better on)

      The course was a an 8 week course by Ewan Chia. I am pretty sure he doesn’t offer it any more and it was quite a bit pricey (1200+$) so I would have a tough time throwing a recommendation that way anyhow. But it was a really involved training to go 0-60.

      I think it likely would not have been worth the money for someone who knew a fair amount already though.

      Thanks for the comments! Have a great week!

  2. Hi Steve,

    Creating an online passive income stream definitely involves a lot of hard work and effort. Thank you for dispelling the myth that it is easy. I love how you have explained the various methods you are familiar with and what goes into it.

    Right now my biggest concern is getting traffic so that is what I am focusing on. At the same time, I am learning more about affiliate marketing and I would also probably create an information product once I have gotten more ideas. So it is very helpful to see the links you have included for these topics.

    Thank you for sharing your valuable experience with us!

    • It certainly does take hard work, at least if you want to be successful.

      I went about it the other ways, getting my successful affiliate marketing products up well before I ever thought of starting a blog. In some ways I am glad I did, a blog is a very long process to really get going (as I am sure you know)

      I have been at mine for about a year (maybe 9-10 months seriously) and JUST starting to think about monetizing, ebooks and such.

      …But you have the first step definitely right…I don’t know if I consider myself an expert on blogging yet (I am sure I am not). But working to build up a decent following before branching out certainly seems like the important first step

  3. Hi Steve

    There is so much good information here I need to bookmark and come back and read again. Thanks so much for so generously sharing all this with us, your readers. From tomorrow I will have sourced products to sell online and already selling them offline from this weekend. Want to have affiliate products too that complement my small niche.

    Patricia Perth Australia

    • Patricia,

      As small as you niche Is I am sure there must be some affiliate products out there. If not what a wonderful opportunity to make one! It is great that you have some products coming out. I look forward to hearing how you are doing with the sales. Good luck!! 🙂

      • I want to sell books that relate to my niche via amazon. Just have to get it up and running once I see how my store goes online with my sourced products. There are actually quite a few lavender books out there I found when I did my research so that’s promising too.
        Could I ask you to please check out my first guest post too. Want to give Rick some link love as he is a brilliant writer and been very helpful on my blog too. thanks Steve.

        Patricia Perth Australia

  4. Great post. And I agree with point #1. I also spent a couple of years building my affiliate sites, and now can sit back and relax and make money while I sleep. People tell me that I’m so lucky, aand think it just happened overnight. But they’re wrong. It requires sweat, trial and error, and some frustration as well. But it’s well worth it.

    • I feel you. This blog (for now) is just a vanity project where I spent most of my work time, though hopefully I will get more out of it in the future.

      All of my earning have been from affiliate sites/info products, where I am still making a decent living with almost no effort. Of course from my understanding of PLC, that just means I pour my energy (and money) into my next product, which is this blog.

      You may get by with resting on your laurels for a long while. I certainly cut back on workload a fair bit while traveling and enjoying myself for 7 months. But eventually you need to put some more effort in.

      It is great that you really do get that it does take blood sweat and tears to make pretty much anything work.

  5. When I first got started online it was so annoying how every site promised me all this cash with no effort on my part. I hoped it was true, but knew that there was no way it could be. After working hard (and I mean hard) for 1.5 years on my blog I am finally starting to get some traction. I have done all of the things you list here. The one thing that most gurus leave out of their pitch is that TIME is the variable that you can’t control. You can do everything the right way but the longer I am here, the more success I have.

    • Yeah nothing is fast or easy for making money online. ANyone who says differently is out to make a buck off of you i think.

      Blogging may be one of the longer processes too. The only shortcut I could see would be starting a new blog with a built in fan base from another blog and a nice big friends list from twitter/facebook etc. already in place. Building from zero take a long time to really, “make it happen”

  6. Steve,

    That’s a great and comprehensive post!

    I think people can actually prove myth #1.
    How? Well, when they start making passive income, they can “start” putting in zero effort. 🙂

    But then, as you’ve rightly indicated in the PLC section, the minute you break the myth, your income stream starts dying down. And then what follows is what happens when you “rest on your laurels”.

    We are all waiting to have you return home and come out with great stuff. I can see that this post of yours was meant to prepare your readers for your upcoming paid product 🙂


    • Thanks Mark,

      Depending on the product maturity phase may even last a while. So it could be possible to go 5-6 months and not really notice any change, but it will come unless growth efforts are put into it.

      The people who “start” putting in zero effort are the ones we never hear from. They are those little sites everyone stumbles across now and then. the ones with no visitors that earn no money.

      They get online put in a few hours work. They sit back, wait for the money to come rolling in and when it doesn’t get discouraged and leave for greener pastures.

      OH well, do we really need our niches more crowded?

  7. Fantastic work Steve – now that’s how you get things done! I already had the creation process down pat from what I’ve learned over the years already but I want to definitely thank you for bring up the product life cycle because that’s one thing that I think a lot of us over look.

    Information is going by so quickly that because you’re creating an information product, you know for a fact that it will eventually become outdated as new practices emerge and interests decline. The hardest part would be to create evergreen products but it’s just so hard to tell.

    It’s definitely something to remember so you’re not trapped in a cycle of constantly releasing a product every few months and focusing on creating sustainable passive income.

    • Yeah it is easy to overlook PLC. But it is a pretty proven theory. Proven by HUNDREDS of years of history.

      It is very possible online to live for a decent amount of time only on your passive income. But there is a limit even online. Growth efforts must be put in or it will all dry up in the long run.

      Evergreen products certainly last longer than anything tied to a specific date. But even those are really only “longtimegreen” products. even the best evergreen product will eventually fall into decline

  8. Steve that was a really good and informative post, but I’m puzzled as to why you didn’t include selling physical products on the web? All businesses, including those you mentioned, need to promoted in order to make sales. If you use a drop shipper you can still travel the world while someone else deals with all the tedious aspects of store keeping. As income goes, it seems pretty passive to me.

    • Well for one the post was already pretty long 😉 . Mainly I guess it is since I do not have a ton of personal experience with drop shipping.

      I did sell physical products online. I actually did this BEFORE I ever got involved with Affiliate Marketing. It wasn’t drop shipping though, I just purchased from a small vendor and made a big site to sell it online. I wasn’t that good at it and it only did, “ok”

      You are right though, I certainly did overlook drop shipping, though, Like I said, probably simply because I lack more than just a knowledge of what it is having no personal experience in it myself. (Though i do understand the concepts well enough)

  9. This is a fantastic post!! For several years I was able to live on 100% passive income but then, alas, Google killed my portal sites. And idjut me didn’t use them to build my list as well.

    Ah well, lesson learned.

    Being killed by Google kinda sorta killed my desire to make portal/niche/small sites, so now I’m taking more of the ‘promote my brand’ thing. From there, I’ll continue with affiliate products and ebooks (they have always done well).

    • Yeah. Google is a huge factor in site entropy. Since they constantly fiddle with their algorithms, i do not see that changeing. I think entropy happens regardless, but something like the Google “slap” can make a slow decay into a dead stop in days. That is pretty shocking.

      Pre AM. I was making a mint off of some Adsense loopholes. Admittedly playing a “little” fast and loose with the rules. When Google tighten up their Adsense, in one day I went from a solid income to nothing (again).

      I am definitely with the whole “promote the brand” thing now. Contacts, networking and the sort is something that they can never take away from you. Even if Google were to do a complete 180 on the way they do business, it would just be a setback now. Perhaps even an opportunity.

  10. You’ve got some awesome info here, Steve! The info in step 6 regarding testing and tracking your stuff I found especially helpful! Thanks, and retweeted!

  11. Awesome post, Steve!

    It’s refreshing to read the truth about making money online instead of all the smoke & mirror post floating about.

    I am working the affiliate route currently and will introduce a few of my own products as I continue to build my little empire. 🙂

    Working really hard is what people have to expect in order to become successful, it’s the manner in which businesses grow to where they are highly profitable. Thinking this is an overnight cakewalk is a huge mistake. Like you say, roll up those sleeves.

    • Thanks Jimi.

      I do try to have at least one highly actionable post a week with real, “steps” for people to take.

      The people that “get” that it takes hard work do well. Usually they do well they can afford to take serious, “time” off to enjoy some of the fruits of their labor. I think that those that come online thinking they can get “something for nothing” fade away pretty quick.

      There is a lot of hype on people who make 400,000 in three days work. What they don’t show is how those people almost always spent YEARS laying the groundwork for a product release like that. And even the product itself may have taken months of hard work to prepare for.

  12. Hi Steve:

    An outstanding post, full of information. wow. To me passive income feels harder, and that is from outside. Have not done it ever. Now if you have an affiliate site and you are managing it, there is so much work already, even if you have a software to automate, you have to do customer service and affiliate management. List building, email marketing, balancing the books every day, that can be done with the help of the software may be.

    With all that work, I was getting the feeling, passive income is creating income with another product that your loyall customer buy those who like buying from you. So for me it will take a long time to make passive income.

    fran a

    • Fran,

      It does take a long while to build a passive income.

      Like you pointed out, even affiliate marketing product, though semi passive take some work to upkeep, even if it is just, “book-keeping” and running some outsourcers. The thing is these programs CAN be mostly passive for a while so at worst the amount of time you need decreases.

      YOU will get there I am sure, it just takes a lot of time and effort on those products to make it happen.

  13. Thanks Steve.

    It is good to find direct information like yours. As I work to create my Ideal life, and help others do the same its good to have direction from a leader of it like you.

  14. Hi Steve,
    This is an excellent article. It’s a really good guide on how to develop a plan to create passive income. IT’s not so much that it requires zero work, but that you put in the work efficiently to find the right sources of income from the start.

    • Glad you liked it Ricard. You are right, work definitely can be iminimaized when you get it right from the start. That is why I think planning from the start is an important thing to do.

      I must say with your “last Blog” title shakespeare didn’t do seo, I am looking forward to visiting your post once I finish commenting. Sounds very interesting article to me! 🙂

  15. Hi Steve,

    This is a comprehensive post, really very informative. I agree with you in regards to PLC, we have to always look for growth in our business and always develop good content. Otherwise, our business will suffer. Thanks for sharing

  16. Hi Steve, some excellent advice here Steve. Too many people are making an income telling people how to make money on line that it’s really simple, passive and automatic. It’s akin to selling spades in a gold rush.

    It’s hardwork and takes a lot of time to get things going. As you said, 3 years. Which is something like 4500 hrs of work…..not quite the 4hr work week people envisage. (albeit eventually)

    Have a safe trip home.


    • Great reference. It is exactly like selling spades to a goldrush. Some people do go out and make fortunes with them, but just enough to keep it going. Most fail and the only sure people to profit are those spade salesmen.

      That is not to say there are not real and viable methods out there, but just that is more than a simple task. Hard work and dedication (and pushing through possible failure) can make you achieve great things…but nothing worthwhile was ever easy.

      Thanks for the well wishes. Home now. Just have to recover from jet lag.

  17. Hi Steve,

    I really like the way you laid out this article. I think everyone should find their own way of making passive income. What works for me might not work for you. I have to agree that there are many ways to make money online but I think everyone should have their mind set upon what ways to make money online with and then focus on it and start implementing the steps you mentioned here.

    • You are 100% right. Different things work for different people. There is certainly no, “do this niche and make money” at best you can simply show the guiding principles to being successful. Even then it is certainly possible that the steps could even change somewhat overtime.

      At best I guess it is get a rough guideline, set up your own plan to work within it and be willing to adapt and change as needed.

      Thanks for a great comment!

  18. Hi Steve,

    This is an epic post. I really enjoyed reading it and will have to bookmark it so I can come back and refer to it again.

    I’m trying to learn how to create an online income but I’ve still got so much to learn. I’ve picked a strategy that I think I can make work.

    Now, I’m just trying to implement like crazy and hope that I see some return for my efforts. I like the trial and error method.

    I wish that these IM gurus would start writing about how many people they actually help to make money and create the lifestyle they want. What is their success rate?

    How many people from their last course achieved what they wanted out of it? I wish there was more transparency and accountability.

    I know that we’re all responsible for what we create in our lives and some people won’t help themselves, no matter how much you try to help them.

    I just think there is too much money being paid to these so called gurus for very little return on investment.

    Thanks, Steve, for the honest, down-to-earth look at what it really takes to be successful online. You can have my money any day. 🙂

  19. Hi Steve, really thought provoking stuff here. I’ve not worked on the passive income thing too much. I have a newsletter that can be written anywhere and it scales well, but I still need to do all the writing. This will be a great post for me to look at again later.

    You have a lot of points that work for any business however. I am not a big fan of PPC personally. It can be used judiciously to get attention for a new website or product, although I think of it as a sugar rush. You get a quick effect that goes away just as fast, and I’ve found it very expensive for the results I’ve gotten. I’ve found that article marketing or social media is like a well-balanced meal instead, and it costs little or nothing. Article marketing may even pay you!

  20. Awesome post Steve.

    I just started using Adsense myself as a way to monetize my blog early in the game without much effort.

    I love passive income. Some other models I am exploring is app creation, and I just got done building an entire sales funnel for gathering up tons of customers in my network marketing business.

    I love network marketing & affiliate marketing probably the most, just cause no product or customer service creation needed on my own end.

    In terms of marketing, I love articles and SEO cause it’s like the passive income of marketing techniques haha. Though the thrill of instant traffic from paid stuff is great as well 🙂

    Social media is fast becoming my favorite place for traffic.

    Thanks for the info again Steve!

    • Greg,

      AM is great. I did pretty well there and in many ways it is a ton easier than blogging for money making (IMO) ultimately though you might want to look into creating a product of your own. Particularly after you have a bunch of contacts, etc. within your niche community to help you promote it (as your affiliates)

      I agree with articles… It took a few years, but my main niche market have just over 1000 articles on ezinearticles alone. A few of them hit the sweet spot and still send me dozens of people to my mailing list every day.

  21. Hi Steve,

    this post is really amazing. I am actually blown away, also reading through the comments I noticed that I am not the only one.

    I managed to read more useful things here in this post than after a year subscription to some of the top marketers that keep repeat the same stupid things all over again.

    Well, I’m still not that far in the game so my online business is on semi-automatic, far from being 100% automated, but I will get there sooner or later, it all depends only on myself and how much time I invest in this venture.

    • Thanks Zarko,

      I appreciate the kind words, since I know you know what you are talking about! :). Automation is awesome and but it is a process. Rome wasn’t built in a day after all. Getting a start on it is all you can do, just work it and build your empire a brick at a time!

  22. Very informative and info packed. Great for people starting out and also reminding me not to drop any of the parts of the equation for my business. You’ve definitely got a knack for providing a well thought out set of how-to’s here. Look forward to reading more throughout your site.

  23. Steve,

    Very interesting to read your thoughts about how to create an income stream from the working online! This is really huge effort made by you, I can imagine!

    I just found out today that a lot of people may not know the difference between “making money online” and running a business!

    Great writing!

  24. Brilliant post Steve.

    Good to see someone not spruiking the ‘follow my system and you’ll be rich in 30 days’ line. I believe it’s true that anyone can make it if they are focussed and determined, and having the details laid out like you have in this post makes it a no-brainer. I wonder how many people will take action though, and put in the effort.

    Keep up the great work with your blog.

  25. Steve,
    I loved what you had to say, and thanks a ton for being as all-encompassing as you were. I’ve currently been self-employed for a while now, but I’m still “working” and I’ve been looking for ways to scale my business for a more passive stream of income…You’ve given me some good ideas.

  26. I have been earning a living online for the past three years writing content for others. As you said in your article, your income is solely dependant on your ability to churn out articles, reports etc.

    I have realised that I don’t want a J.O.B. but an online income that will progressively increase.

    To that end, I am in the process of writng a course in a really interesting niche that I will market.

    Thank you for some really helpful and insightful posts.



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