Passive income… the magic words which cause so many people dream of a life of exotic holidays and enjoying every hobby they can think of while money pours into their account. All this money comes to them without any effort, without any work done. This is the dream of most people when they hear of passive income opportunities for the first time. And it is as far from the truth as possible.
Earning a passive income is not something coming to you from the thin air. Even if you join an affiliate marketing program where you get paid for each click on a banner displayed on your website, you still have to get and maintain the website live online and have daily visitors. To sell an app or an eBook, you have to first create it and then to continue promoting it.
Thus, the first important thing you need to know about passive income is that you do not get paid for doing nothing and there are no magic formulas to make you rich overnight (and if you are promised one, run in the other direction as fast as you can). Now that we have got this out of the way, here are five important things you need to know about starting and running a passive income opportunity:
1. Find a Niche You Are Familiar With
The best way to set up a passive income opportunity is in a niche or industry which you know quite well. If you have to learn something new from scratch, it will take some time before you get familiar with it, and it will take some trial and error before you get it right. This will cause you to lose time and potential income – plus you may never get to master the niche to the degree it is needed to help you promote products and services through endorsements or affiliate marketing.
When you are passionate about a topic and are also knowledgeable, you will find it easy to prepare your promotions, set up a website or a blog, and post interesting content to attract lots of readers.
2. Keep Tweaking and Improving Your Product
If your passive income earning model involves selling a digital or informational product, your work is not done once you have posted the product for sale on your website. No matter how popular your product is, competition is lurking around the corner. Once you have sold your product to the first wave of customers, what do you do? How do you keep your streams of income into your account?
You need to continue removing bugs from, and adding new developments, new functionalities and extra features to, your digital product and thus keep it constantly up to date, relevant and useful for potential customers. This is how you can make the second and third wave of customers click on that “Buy Now” button and add more money to your earnings.
3. Customer Loyalty Is Earned, Not Given
The only way you can get money from any type of business model is through other people, who either buy your products or take actions which cause you to get paid. These people need a solid reason to do any of these things: this is called trust. People click on links from trusted sources, they buy products and services from trusted businesses.
To build this trust and, hence, customer loyalty, you need to be genuine in everything you do, from the information you share on your website to disclosing your interests in every kind of product or service you promote. People do not like being lied to – if you have a valid interest in promoting something, then you should have no qualms about stating it. Otherwise your potential customers may think there is something fishy about the relationship you have with the product owner.
4. Protect Your Reputation
Do not fall victim to greed after you have worked to build a passive income source which works and brings you a satisfactory income. Do not turn your business model into a scam and do not betray your followers’ and customers’ trust. Word of mouth is very powerful on the internet, either to build or to ruin a reputation and cause you to lose every source of income you used to have.
5. What You Give Is What You Get
You should print this heading and place it somewhere visible in your home office. If you cultivate your followers and readers through genuine, valuable and interesting content, through sharing your talent and ideas with them, you get loyalty. If you scrap together a website overnight and put a dozen affiliate banners on it, you will get… nothing. After the first few clicks out of sheer curiosity, the online activity on your digital properties will die down and you will not make any money at all.
As you can see, passive income is not equal to getting money doing nothing. It takes time and work to set up your business model which will continue to generate income for you. It takes dedication and the genuine desire to help people, make their lives easier or more interesting through what you have to offer. This is the true secret behind successful passive income opportunities.