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How to Develop Passive Income

The following is a guest post about passive income by Miss T blogs at Prairie EcoThrifter. She grew up in the Canadian prairies and still lives there today. She is passionate about saving money, being healthy, looking out for our environment, and most of all having fun. Her blog shares tips on how you too can live a green, debt free, and fun life.

If you run a Google search online, you will come across lots of people looking for professionals that can perform tasks for their businesses on a contractual basis. These people are known as freelancers. Freelancers can do everything from providing websites with content to creating websites from scratch. The opportunities are plentiful and the revenue potential is unlimited. Freelancing is a great way to start bringing some extra cash into your household. Here are three ways that you can freelance and generate passive income for years to come.

Passive Income – Online Website Writing

Online writing is one of the oldest forms of online passive income because everybody needs content. You can write for a blog or website and generate a one time fee but that doesn’t bring in the residual income. Instead, you should focus your efforts on writing for sites that will pay you income over the long term. Ehow, Helium, and Hubpages are all good websites for writers looking for passive income. You can take 15 to 30 minutes to write a short article and publish it on their websites. You will get paid each month based on the amount of traffic that your article receives and how many page views it get a month. A few articles on these sites could easily bring in a couple hundred bucks every year.

Passive Income – Online Book Writing

Another way that you can put your writing skills to the test is by writing newsletters and books for people looking for authors. Helping someone publish a book can be a rewarding experience both emotionally and financially. Most ghostwriters make the mistake of just asking for a one time fee for their writing help. Instead of requesting a flat fee for your work, you can request a percentage of the profits earned from book sales. A well marketed book with quality content will continually sell copies month after month. This will result in income for both you and the book seller. You may just find that a popular publication will bring in income for a long time.

Passive Income – Online Product Creation

Product creation is a fantastic way to earn passive income from a one time endeavor. There are always website owners looking for someone to create an online application or a plugin for a website. These products have the ability to generate a large sales volume because of their practicality and usefulness. If you have the ability to create such a product, you should do so with the stipulation that you receive residual income. You never know whether or not the technological innovation that you create will be the next great hit product. A small 10% share of the profits of a smartphone app could bring in as much money for you as a full time job.

As the Internet’s popularity continues to grow globally, freelancing opportunities will become even more plentiful. The freelancer that has the foresight to create useful products that people need will find himself bringing in consistent income on a regular basis.

So, have you ever tried freelancing? How has it improved your financial situation?

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42 comments to How to Develop Passive Income

  • These are good options to earn residual income from the web. I would consider putting together a mix of potential income sources so that you don’t end up relying on only one source which might get hammered for some reason.

    You could also make a music video, post it on YouTube and go viral.

  • These are great ideas. When I first started blogging, I also started a Hubpages account and added a few articles. However, I’ve not been very diligent in adding any more content. This might be something I want to continue at a later date. Thanks for reminding me of this.

  • @optionsdude. Believe me I have considered my celebrity potential and using YouTube to make my big break but I have determined I might be more successful elsewhere…lol.

    Thanks for the tip about mixing it up. It is good to have variety so that you aren’t tied to only one thing.

  • @Little House. You’re welcome. I too have not found the extra time to write any hubs but it is on my radar as a great option.

  • I have freelanced and it has worked a little. I just have trouble with the time commitment.

    I feel that none of these are truly passive income generators because they all require time and effort. A site that you write content for once and you are done, and earns you money, could be truly passive income.

  • @ Robert. Yes the time commitment to get started can be a drag. However it is an investment for the future. Once you get things up and running they can often maintain themselves with very little effort.

  • I used to describe writing as a dream job because you can do it anywhere with a computer or pen and paper. Technology has certainly made it easier to be entrepreneurial.

  • I do a little freelance writing. Not necessarily for the money–if it was for the money I might not do it–but just to force me to keep me up to date on the happenings in my industry. I’ve enjoyed it, although there are times when I really enjoy it and times when I wonder why I’m doing it.

    I don’t think there is any better place to start than freelancing online people looking to supplement a full-time income. It doesn’t have nearly the learning curve as most people would think, and the hours are up to your choosing, which is pretty awesome.

  • These are some great tips miss T – I think the most important is getting royalties (a % of sales) from your books – that way you have a true passive income stream (once the book is written)

  • @ Jeff. I totally agree. Royalties are the way to go. Now I just have to write that book.

  • @JT. Ya, I sometimes feel the same way about blogging. Some days I love it other days I wonder why I am doing it.
    You’re right. The advantages of freelancing are working your own hours which is something we would all love I think.

  • I’ve done freelance work, but more for the experience and a chance to improve my resume.

  • These are all good ways to earn passive income. I’ve never done any freelance work though, I’m always too busy working on my own stuff.

  • It’s a good way to monetize if some requirements are fulfilled… like doing it in English, for instance. After almost one year blogging about personal finance in spanish, it becomes every day clearer that making money online in spanish isn’t that easy. I could not point out one reason for this, but I’ve concluded it adds up in the level of evolution internet has had in spanish speaking countries… we expect much better things in the future as things improve. As you say, as internet’s popularity grows, better opportunities will arise.

  • @ FSYA. Me too. I have a hard time keeping up with things myself. But I am starting to get into the freelancing thing in the hopes it could turn into a full time job.

  • @ Finanzas Personales. For someone who’s first language is not English, you are doing very well. I think it’s great that you are reaching out to people in their own language.

  • @ Jenna. I agree. Freelancing can be a great resume booster. It can also be a great way to network. Some of the freelancing I have done in the past has led to job opportunities and great references.

  • Very interesting! I never thought about ‘ghost writing’ as a possible profession. I will have to look in to that.

    Thanks for a great post!

  • Good ideas. Im hoping my website will generate some passive income, but writing an article or two for those sites might be worth my while as well.

  • Thanks Crystal, I appreciate your experienced insight. I am definitely going to check into online writing opportunities, that generate passive income.

  • @Hunter, this was Miss T’s insights but I am glad you liked them! :-)

  • I personally have been freelancing as a ghost writer and staff writer, but those are all for one-time fees. I really need to look into Hubpages and eHow…thanks Miss T!

  • @ Everyday tips. I have thought about ghost writing too but finding the time is the issue. Keeping up one blog is enough work. It is definitely something to look into for the future.

  • @Justin. I think all of us are hoping to have our websites generate a passive income. The issue is getting them to the passive point where they no longer require daily work from us.

  • @Hunter. There are a ton of writing opportunities online and not just with the big names like, eHOw, etc. You can also write for bloggers that you know who are looking for some help. Every little bit of extra money counts.

  • @Crystal. You’re welcome. It’s funny though, I look at you as the online pro and look forward to your advice. Good luck with the Hubpages thing though. Let me know how it goes. I know John at PFI writes a lot of Hubs. He would be someone that could help get you started.

  • Hi There Crystal!
    You give some great info on setting yourself up with passive income! My husband and I used be avid writers on hubpages, usually whipping out an article every day or so. We managed to get a good sized collection of hubs and were making a decent amount from Google Adsense, but after the Panda update, our revenue has dropped nrealy 50%! It was still a great use of the time, and still occasionally earns money, but now I’m just excited to be moving onto other projects, like Humbleville.
    Good luck with building your passive income!
    Humbly Yours,
    The Mayor

  • My wife has been writing on the side for several years and has provided a nice stream of residual income for us. It has been insurance for our budget and it leads to peace of mind having more than one place that we are able to receive money.

  • @Mayor of Humbleville. Glad to hear you had so much success with hubpages. Can I ask how much you were making on average?

    That Google update hey?! It seems to have hurt a lot of people.

  • @Jerry. That’s great to hear. Added security financially can make all difference to getting a good sleep at night. Plus if something unexpected happened you would have that extra resource to pull from. Good for you.

    So where does your wife write? Does she blog?

  • Reading these three pieces of advice has made me realize how I need to get back to Hubpages and start writing again. There are other sites out there too. They are a little competitive and the pay varies depending on project size.

  • @ Lisa. Glad to hear we have prompted the passive income spirit within you. Don’t work too hard but remember that every little bit of money counts.

  • I don’t know how can one categorize an income as “passive” if it involved an initial investment of time or/and money or if it involves a considerable amount of risk of devaluation. Buying a property to rent is nowadays one of the most risky investments, one must face the perspective of seeing his property subject to devaluation day by day. It also involves investment in hiring the real estates firm that recruits the renters, the house maintenance, etc. Another “passive income” I tend not to regard as passive is the one from publishing a book or from maintaining a site. Who can qualify the amount of effort it implies and the investment in time, in sleepless nights, as passive? It’s like saying the building a portfolio of stocks and bonds, risking your money each time, generates effortless income. The physical labor isn’t everything, my friends from the IRS. When one makes good money investing his time and money to generate income, he’s totally qualified to pay the income taxes. But when one loses, nobody gives him a cent to help him overcome his loss, and when they give it to him, it’s with a high interest. That’s live, nobody like losers because they can’t be the object of any taxes.

  • Unfortunately, passive income doesn’t supplement your wage income. If someone is trying to convince you that you can become rich from doing nothing, he or she is adopting cheap selling methods. In order to get rich from passive income, you need to become rich before. Only then you will be able to invest in a huge income-generating asset. Here is by the way some source of passive income that I personally use along with some suggestions on how you can get started – Royalties received from writing books bring me passive income (as the author of the book does not have to put forth much effort to continue to receive payment for his or her work).

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