The Holy Grail of anyone who eventually hopes to get ahead is having
passive income—or, as some would say, to "make money while sleeping."
But as Kristin Wong points out in Most Passive Income Isn't as 'Passive' As You Think on LifeHacker, there really is no such thing as a perpetual money machine.
Each of us is given the same number of hours in a day.
Most spend
that time trading hours for dollars to clients willing to pay for our
time and expertise. Some of us have learned to charge according to the
value of the work provided instead of how long it takes—and that is a
step in the right direction.
The well-known drawback to providing services, though, is that when
for any reason you can't or don't want to work, the income stops. There
are two obvious ways to make sure you don't run out of money when you
aren't working:
- Develop your skills to the level that you can charge so much when you do work that you can cover times when you are not working.
- Create products you can sell through e-commerce systems that will deliver them whether you are available or not.
Do some freelancers and bloggers earn passive income and make money
while sleeping? Absolutely, yes. But it is typically built upon a lot of
work they've already done and will need to continue to do to keep the
money flowing.
The myth of passive income is that you don't have to ever work ever again to keep the income flowing—false!
Turn your expertise into passive income
Regardless of which method you decide to use to generate income when
you're not working, most people prefer turning their expertise into
something buyers can access around the clock.
The most common way to do this is by offering consulting services.
Live consulting, however, is anything but passive, so many freelancers
create either membership sites or they create training materials to
sell.
The key to earning a passive income is turning your expertise into
something you can sell: e-books, training courses, videos, etc. First
you have to acquire the knowledge, then actively make the products, and
finally reap repeated income from sales that come in while you're
sleeping and any other time.
Starting a membership site: pros and cons
Building a membership site can be expensive, and to maintain it while
WordPress and other components are constantly being updated can be a
nightmare. One SEO expert I know is abandoning a membership site she
spent thousands to build because WordPress updates broke it and the
original developer is not interested in recoding it; it would cost more
to fix the site than to start over.
To deal with the frustration of membership sites not working with the
latest WordPress or code updates, or merchant accounts not functioning
correctly, many entrepreneurs are seeking alternatives.
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