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How Can You Make Passive Income Online?

By Yaro Starak
125 Comments

I had a meeting with a friend and his business partner last week. The request was to “pick my brain” on the best way to move forward to generate some passive income streams online.

These two particular people are like a lot of people I know. They’ve got tech skills, they know the Internet well and they have lots of ideas for cool Internet business applications and websites.

Unfortunately they’ve managed to dig themselves into a situation where they spend all their time working on client jobs, running what you might call a “consulting” tech firm, completing various programming and web development projects for other people’s businesses. The money in this business model can be good, but it has some serious downsides too, namely -

Those points aren’t necessarily true across the board, but I’m pretty sure any person who has ever consulted or done any kind of web development work for clients will know what I’m talking about.

My friends are smart enough to realize the path they are on is not going to lead them to where they want to go, so they’re looking to make some changes.

The goal is to develop some form of income stream, or several, that could replace the need to take on client work. As always, the relationship between time, money and freedom of choice is heavily integrated here, as my friends are looking to make more money without drastically increasing their workload and eventually freeing up their time so they can do what they want to, rather than what they have to.

Let’s Not Be Strict About Passive Definitions

I’m about to reveal what I talked about during our meeting with my two friends. In terms of what I suggest you do if you are looking to make some passive income online, I don’t want people to get too caught up on the idea of “pure” passive income.

The methods I’m about to talk about are not pure passive income sources, however they have the potential to be low work, high return income sources that can potentially become very close to pure passive longer term. The fact is, it takes time to develop these income streams, but we all love the phrase passive income so I’ve decided to use it here in the title of my post.

So to clarify, what we are looking to do is start up completely new projects that have the potential to become good sources of near-passive and possibly pure passive income, it just might take some time to get there.

First, Understand Your Unique Opportunities

One of the first things I discussed with my friends was taking their present situation and turning it into something that’s less work for them. Sometimes the “lowest hanging fruit” is just a simple adjustment to the business model you are following now, transforming your core skill from labor intensive, to hands-off delivery, or at least much less work.

Here’s some examples of how you might do this -

How About Completely New Income Streams?

I’ve covered what you can look at without drastically changing the market you are presently in. The other option is diving into something completely different from what you do now. You can choose a different business model, in a different industry and a completely new path, or even start several different little businesses and see what takes off.

This option will likely be more difficult to implement because everything will be new, but sometimes it necessary to start from scratch if you what you are currently doing is not working and you want a clean break. This obviously is the only option if you don’t have a business at all, so if you’re new to making money online, listen up – this will be helpful.

Buy A Web Business

This is perhaps the easiest method to find yourself the owner of a profitable website business, but there are serious downsides – it costs money to buy assets and if things go terrible you could lose everything you invested, though that is very unlikely.

After my blog started to generate dependable income I decided to take that money and reinvest it into buying as close to passive income returning websites as I could find.

I won’t go into too much detail regarding how I did this, as I explained my strategy already in some depth in this article –

How To Invest In Websites In Your Spare Time

At the end of that article are links to other articles from this blog that will teach you more details about buying and selling websites, so it’s worth a bookmark if this interests you.

The great thing about this strategy is if you have enough money you can be the proud owner of a dependable online income stream in a matter of weeks.

Speaking very generally, for every $10,000 you have to invest in websites, you should be able to acquire at least a $1,000 a month revenue stream. If you’re clever about what types of websites you buy, you can easily improve your return in a matter of months.

It’s important when investing in websites that you…

The best scenario is to pick a model that you “get”. If you know software, find an online business or website that deals in software, like for example you might seek out a website that sells a script in a coding language you understand so you can improve and maintain it. If you know blogs and how they make money, invest in blogs. If you like ebooks, find profitable ebook businesses and buy them.

The less ambiguity in your mind the better. If you know the market, the product and can see yourself running the website, that’s a good buy. If you lack experience, then pick small websites so you can become familiar with how things work before investing thousands of dollars.

A good place to start your initial research into website buying and see what is for sale is Flippa.com

Outside of established websites, you can also buy domain names, which are very easy to maintain and can often be passive income sources if you pick up some good ones.

A person who deals in domains is called a “domainer” and generally, besides profiting from buying and selling of domains, income is generated from type-in traffic. Type-in traffic is people opening up a browser and directly typing in a domain name. The domain name itself might not have much of a website in place, but if you have enough type-in traffic simply displaying a few ads on a basic page could be enough to generate some nice passive income.

Building up a portfolio of domains is a strategy you can pursue, just remember due to the ease of which you can get into buying domains, competition is fierce, so like with real estate, do your research before investing.

A good place to start domain trading research is DNForum, however look around as there are many other communities discussing this money making method.

If you have some serious capital to invest buying fully established online businesses is an option. With $50K to $100K to spend there’s no reason why you can’t buy yourself into a nice full time income stream in one hit, or diversify and purchase several websites that in total result in a full time income stream. The challenge is maintenance, as running a large e-commerce site or many smaller sites can be a lot of work.

I sold my proofreading business to a couple, who, assuming they didn’t break everything, were essentially buying a solid income stream in exchange for a lump some of capital. The business was reasonably automated when I was in control, although the new owner had to familiarize with how the ship worked, it pretty much sailed itself.

Follow A Proven System

If you don’t have capital to invest, or you prefer to learn a system from scratch yourself, and you’re prepared to spend time studying and implementing, following someone else’s proven system is a good option.

There are literally thousands of ebooks, courses, membership sites, other information products and mentoring programs you can purchase that all propose to teach you a system for making money online. Here are some example business models to choose from…

All these systems are taught by various people who, in most cases, have already figured out how to make money using a certain technology or method or system, and now offer to teach that same system to others.

Unfortunately, most people who take training programs that teach how to make money, don’t. I’ve gone into detail regarding why this is in many posts, but for the sake of simplicity it’s safe to say the biggest problem is not the system, but the person who’s trying to use it.

It might look like lack of tech skills, or tough competition, or poor execution, or any number of on-the-surface reasons why people fail, but in the end most challenges can be overcome, most people just don’t try hard enough.

If you look deeper, the reason why most people don’t try hard enough could be all kinds of things, but usually it’s simply a mindset issue. Motivation, a willingness to learn new things, take action and never give up stem from how you think, so if you can get on top of that you’ve won the biggest battle. The rest of the equation is simply a process of testing and tweaking until you find out what really “floats your boat” creatively and gives you rewards intrinsically.

But I digress, this is not meant to be a motivational piece on mindset (or maybe it is…). If you want help in that area, read this – How To Remain Productive When You Feel Like Giving Up, and this How To Become Comfortable With Yourself.

The fact is, there are systems out there that have proven to work and there are people who explain how these systems work. The information is available, all you need to do is commit to a plan of action to execute the system.

It can take some work to spot the frauds, especially because they often have the best marketing, but since you’re reading my blog you’ve already been guided to a handful of resources that are run by people who walk their talk and are actually teaching what works. There are no guarantees, and ultimately you won’t know until you try, but I do guarantee that taking action will always benefit you in some way, even if you never make a cent. Each system that doesn’t work for you takes you closer to one that does.

My advice is to do three things first if you’re looking to start a new online business with the goal of developing a stable online income stream -

  1. Do some research into the programs available that propose to teach you how to make money online
  2. Pick the program that best matches you in terms of what you want to learn how to do, how it is taught, who is teaching it and of course, listen to your intuition too (make decisions based on the people involved, the teacher for sure, but also past students – you should be able to find lots of commentary online if the program is any good)
  3. Commit yourself to learning and executing what is taught over a period of at least three months, preferably more time – even up to a year

And as a fourth step, presuming the first three steps work, you can then outsource the implementation of the system to others, who either maintain and grow what you have done already, or replicate it in other niches.

I do recommend you go through a new system once yourself before outsourcing it entirely as it helps to really know how something works before you have others do it for you. Outsourcing is a great way to make a business much less labor intensive and create truly passive or very near passive income streams, but for most people this is a process of learning, then doing it yourself, then handing it over to others.

There’s a key point of distinction that needs to be made here when comparing say starting a consulting client-based type business and then hiring people to take it over, verses buying a training program and then having other people take it over. The training program you choose to implement will be a much better business model when it comes to making it hands off for you.

All the systems I listed above have the potential to become very hands-off, whether it’s because they take very little time to manage (like spending a couple of hours a day writing a blog post), or can be given to others to do (for example having assistants do market research and set up websites and write articles in niches for you).

Consulting and service based businesses often depend on a specialized skill that can’t be outsourced, are very time consuming to do or have very little potential for leverage. If you choose the right online business model then you will have a much greater potential to make a lot more money and work a lot less.

While the promise of quick riches is usually a ploy for scammers to get you to part with your money, there are some great training resources online, many of which cost under $50, that will teach you some fundamental skills that can, in time, make you a very significant amount of money, which can even become passive income if you follow through long enough.

Here’s a few resources you might want to begin your research with -

And when you’re ready to begin outsourcing and systematizing your business…

Some Additional Options If You’re Really Creative

If you’re not in a position to purchase a website asset and you don’t like the idea of following someone else’s system, then you can always go it alone and attempt to create a business from scratch by yourself.

There are many stories of successful online entrepreneurs who figured it out without buying any training programs or doing any formal study. In most cases the reason why these people succeed is passion. They’re prepared to keep throwing things out there again and again until something sticks. Along the way they learn a lot and assuming they eventually come across a winner with the right business model, can become financially independent.

There are a lot of traps along the way with this path – and trust me on this one as I’ve walked this path for most of my business life too. Only in the more recent years was I wise enough to invest some money into training programs. The consequences of this is a much longer learning curve, often plenty of wasted time and some failed projects. The plus side is, when you do find what works, you can become a true expert as you’ve done your time and lived the experience, rather than just studied what someone else did.

That’s the core reason why my blog is successful and in some cases, this might be the best path for you. If you want to read my own story regarding why my blog is successful and what ingredients you need if you want success building something yourself, read this – Sometimes You Have To Reinvent The Wheel.

To end with, here are some ideas you can go after if you decide you want to build something yourself -

Failure As A Path To Success

I’ve never liked the word “failure” as I perceive a strong negative association with that word, like it’s a bad thing. I’ve always looked at any experience, whether you achieved your ultimate goal or not, as a good thing. You have to believe this or you will give up long before you reach your destination.

If you don’t consider every “wrong” step a process to go through until you find the right path, then you will not enjoy that wonderful moment when you realize you reached the goal you were striving for. Although, when you get there, it probably won’t feel even close to how you expected it to feel because of what you went through on the way. That’s okay of course, it’s meant to be like that. That’s how we grow and if you expect your awareness to remain static then you’re in for a shock.

You may realize what you wanted back then from your business, or from your life in general, is quite different once you’ve spent some time chasing the dreams. Dreams evolve too, because as a consequence of finally living something you previously desired, it changes – you change. What you want is never the same when you have it. That’s why it always seems rosier on the other side of the fence right up until the point you jump over.

Understand this as it relates to your goals for passive income. If I was to stop and talk to the person I was before I built my business to what it is today I’d say to my previous self that what’s important is to be motivated by the journey more than anything else. Yes, the dream of passive income, lifestyle freedom and never doing a job you hate is important – it will keep you motivated – but it’s not really the endgame you think it is now. Every path walked leads to another selection of doors to open.

Remember to spend some time today and tomorrow and the day after that moving towards what you want and eventually you will have it, it just might not look and taste how you expect it to. In the case of building your own online passive income streams, take the motivation you had to finish reading this article from top to bottom and continue moving forwards. Pick a strategy, a next cause of action and follow through on it.

You might decide to transform what you do now into something more passive by changing the model or hiring people. You might start researching the possibility of investing your capital into online properties and buy into new income streams, or perhaps you will begin the process of finding someone else’s system to follow to build new revenue sources. Maybe creating something completely fresh from scratch is more desirable for you, or it could be that you’re ready to look into outsourcing and building systems as the path to more money for less work.

Whatever the case, I wish you good luck. I love it when people taste the freedom that being able to choose how they spend their time on this planet brings.

Yaro Starak
Choosing Destinations

About Yaro Starak

Yaro Starak is the author of the Blog Profits Blueprint, a report you can download instantly to learn how to make $10,000 a month, from only blogging 2 hours per day. You can find Yaro on Facebook, Twitter and .

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125 Comments

  • I liked how you pointed out that people shouldn’t get caught in chasing “pure” passive income. The possibilities are there, but some people seem to forget that it takes some hard work before things get “passive”, and even then it does require some maintenance, not necessarily often, but it does.

    Also, people shouldn’t make it their only goal to hit that one out-of-the-park homerun service, blog or whatever. The day you hit that homerun might or might not come, but while getting there and doing different things, there’s the potential to build multiple streams of income. And in the end those small streams can add up so much that you don’t even need that one jackpot anymore.

    The key is to understand that you are as successful if you earn $1M from 100 sources over several years as you would be if you got a million dollars right now. And that doesn’t mean you can’t go for that big hit at the same time — follow your passion and enjoy the journey :)

    • Most people think “passive income” means no work at all, which couldn’t be further from the truth. The reality is that you work very hard to give your website momentum with the hope that you don’t have to create products over and over again to make money.

      However, even the best “passive income” websites require updating, fresh content and maintenance.

      • Jon

        Completely agree… though if you are doing something you are passionate about, coming-up with new products is fun! That’s what I do with one of my online businesses!

        Jon @ WoodMarvels.com

      • Passive income need not necessarily be restricted to that from websites. Income earned from websites, invested can also give passive income.

  • You’re quite right in saying that the reason why successful online entrepreneurs succeed is because of passion.

    A lot of people go into niches that are supposed to be “income-generating” just for the sake of “making money”. They end up failing because they don’t have the passion and the drive to push through the tough starting days.

    I guess the biggest mistake most of us make is in trying to do everything ourselves, so I really like when you mentioned about hiring people. That’s the main aim of owning a business (both online and/or offline) isn’t it? – Not to be self-employed, but to enjoy passive income by letting the business run by itself =)

    • Not only do they end up failing, but they leave a lot of crappy Web sites orphaned on the Internet. Yuk!

      • The true question is, can you afford to hire people? You need a budget for that. If you are passionate about what you are doing, then you will certainly succeed online, but you can’t hire someone when you don’t have money to pay him. I would rather make a Joint Venture with someone I trust and that I’m certain will be passionate about what he is doing so that we are more likely to be successful. I always look at every top blogger first post they ever wrote, and noticed that they were just like us, untill a special day they started being famous and make a 6 figures income. We shouln’t look for money, we should let the money come to us and continue to blog without expecting anything. In my opinion, You have to give first before receiving.

        • That is philosophical and something to which I subscribe. Passive income need not necessarily come only from websites. Prudent investments could give the right balance between work and play.

  • This has got to be one of your longest posts yet! ; )

    I really liked to parts of the article that you dedicated to website buying and failing your way forward.

    This has been the only place that I felt I got valuable information on buying profitable websites, and it definitely something I want to do in the near future.

    The failing section really struck home with me. I’ve been trying to make a living online for over a year now, and nothing was worked. But about 45 days ago I started something new, and it is finally showing results!

    It took me a year of failures to figure out and find something that worked.

    So keep failing enough and you will find success!

    I think I even wrote an article about it on my blog… ; )

    • A series of failures is experience of what does not work. A series of failures could well culminate in the best possible result.

  • Passive income is really what it’s all about. What’s the point in having an internet business if you are tied to it like a typical Job?

    I wholeheartedly agree with the part on Hiring others. When I first started, I couldn’t bare to imagine splitting some of my profits with others, but then I got extremely overwhelmed with everything I was doing. I remember days when I was so attached to my computer that it was hard for me to leave to get something to eat.

    When I started outsourcing, not only did I have more time, but I also started making more money. A win-win situation. It’s important to set up a structure so that even though you might have to work your butt of to get going, but if the structure is set up in the right way, that income can become more and more passive.

    Thanks for the great article once again :)

    • “A win-win situation” This is my experience, too. You have to outsource things your business is growing or your business will fail because you will fail. There is a point where you and your body didn´t get the obstacles.

      Cheers,
      Volksphone!

  • I totally agree with you. But, here is what I think about income online.

    1. Money comes if you really commit yourself to it
    2. There is nothing like failure, just lessons
    3. Sell what people want to buy ( WordPress themes)
    4. Create an ideology that sells (Seth Godin – Permission marketing)
    5. Don’t believe in traditional rules. Create your own

    • I agree with you Jaky! Great post Yaro!

    • thanks jackie …. just wat i needed to hear

      regards
      phillip

    • I like what you say there Jaky about failure and lessons, I always look at any failure as a positive as I see it as a lesson in success. I ‘m with you on tradition as well
      forget it and be original.

      Yaro great post you always manage to motivate. Have you gone into that niche, I think you would do very well in it.

      Thanks Joey

    • Thank you all for reading my comment. Hope I made it useful :)

    • You are bang on.

  • Great post which I think every person who wants to make passive income online should read! Reading it gave me a couple of ideas which I plan on researching in the next couple of days.

    I would just suggest that whichever income stream people choose to pursue, it truly helps to have interest- if not passion- for it. Not saying you should be in love with the subject matter your chosen income stream focuses on but it does help to have some interest in it.

    Wesley Craig Green
    The Geek Entrepreneur

  • Yaro, this is perhaps one of the longest posts I’ve seen from ya this year!

    I feel for the part where you mentioned about being a “web consultant” that also develops sites for others. Regardless how fast I could transform from idea into a site… there’s still people (clients) we have to deal with — that comes with “bouncing back” of work as “there’s always something to improve on” with the site.

    So you say that information product is a good way to start off with converting from active income to passive income?

  • A timely post for me. I’ve been looking at ways to create near passive income and recently had a meeting with a successful online entrepreneur. The biggest “aha” I had from it was to stop focusing on a myriad of small income generating items and focus on one or two big ticket items that have potential to generate great income passively. It was just the clarity I needed and I’ve chosen to develop an ecourse. Excellent article Yaro. Some great passive income generating ideas.

  • Thanks for this post! Even though you were talking about website developers/designers you could have just as easily been talking about virtual assistants and said the same thing. I’ve come up across the same issues in my own service business.

    I built up a pretty decently busy VA business but I was becoming so tired, overwhelmed and drained that I just had to take a break, refocus on what I really wanted and start again.

    Now I am focused on professional blogging, taking the skills and expertise I’ve gained over years of online marketing for myself and for others and using it to give out lots of advice. I’m blogging about my journey to love my business and my life and of course getting the input of those who are really fully there.

    Thanks again,
    Angela

  • “How Can You Make Passive Income Online?”

    –>

    “The methods I’m about to talk about are not pure passive income sources”

    ?

  • A passive income stream is a must for any entrepreneur who wants more freedom. It gives you time to do what you want to do, whether it is travel, expanding your business or something else. You can just sit back and watch the money come in. Of course to keep that income stream going there is usually some kind of regular work. If you’re smart you outsource those small management tasks so that you have even less to worry about.

  • I am running more then ten website that makes a small income on every site to a bigger one for all ;)

    I call it “earning sharing” :)

    Cheers,
    Volksphone!

  • So good I read the WHOLE thing! Thanks again Yaro! Blogging my way to freedome.

  • I have this plan on venturing into a a niche site, to be specific a free events posting type of site…the problem is, despite my 1yr++ of blogging..I’m still not techy enough to get me started on this project of mine…and I’m thinking of hiring someone/co. to make it for me but I fear it may cost much…as time passes..I feel opportunity loss pass me by over and over…I’ve read what you’ve posted but its good or let’s just say people who are established professionals having cash to spare…I on the other hand just started my journey in my career as an employee though my blog gives me a reasonable amount of additional income stream..and I’m feeling quite stuck because of this lack of skill/resources

  • Whe making money online, the best source of advice is what you get form here. When ever my sales drop, I always visit this site to see what can I lear again. I can always find a new update here. Thank you so much.

  • Hi Yaro,
    I really like this post, as many of us like to achieve the higher level from now by mean of blogging. Its really not so easy to teach people how to make money. I always follow your suggestions and implement that in my blog http://www.clickblogging.blogspot.com. Its really helpful to me.

  • Awesome post Yaro! Now it’s time for me to get back to what I was doing and make my business work! I agree that getting to the passive income stage is a tough one but I know and I hope am on my way there…

    THANKS AGAIN for the inspiring article!

  • Interesting post, Yaro, indeed, I am also one of those guys that build sites to customers around and I can tell you it’s one thing I am trying to get away from. I already have a nice passive income stream from a few of my sites and I currently try to put some more time into this and get away from the website building activity since I started to hate it

  • This was a very informative article. I liked the way you gave many concrete options for developing passive/almost passive income. I also appreciate how you list many resources to aid in this process. But by far the part of your article that I found most helpful was the last section about failure as a path to success.Your perspective on failure is what moved me the most in this article…Your positive view point on experiences that don’t work out as planned seems to be a real key to learning & the opening of new doors….I will definitely benefit from what you said about being motivated by the journey.

  • You know a business can also be passive if you are able to effectively delegate almost all of your work to competent people. The important work here being ‘competent’.

    I think that even new website owners should outsource some of their most time consuming tasks, like link building for articles. Or alternatively you could outsource the thing that you find bores you to tears, like link building for articles.

    Then I also think that a very important point you mention is that people should go through the initial pain in the rear of actually learning the business, knowing how to implement it before they start trying to manage a website or business.

    Good stuff guy.

  • Hi Yaro
    Thanks for your great article, which as always is both thought provoking and motivating. I agree that you have to keep on learning new skills, ideas and keep on trying new ways to move ahead financially in life. The potential on the net is incredible.
    Keep inspiring us all.

  • i agree that you need passion to persevere until something clicks. My opinion on blogging, solely on blogging, is reiterated here

    http://proenrichment.com/2009/09/07/a-personal-development-blogproenrichmentcom-opinion-on-blogging/

    Overall I like this post.

  • Thank you Yaro for all the ideas of making passive income. You obviously put a lot of time into writing this article! You are an inspiration to me, and I always look forward to your news letters and articles. I follow your blog, and hope to one day get my blog traffic into the thousands per day. Right now, I am excited to get a 100 visits a day !!! I have started making a little money, and look forward to making even more !!!

    Thanks for all you do !!

  • Information products is the best business model for this time of the world. Those who get in are clever, those who are skeptical about it are foolish. I am foolish because I haven’t yet launched my info product. If I had, I wouldn’t be reading this post now.

    • I have been checking this out as well, mostly because of points brought up in IT classes. Combined with global recycling/resource issues, digitalizing all sorts of information is not only income-generating, but the way the future is shaping up. Right now, it seems to be generated by many seeking income; however, there are many goverment, academic, and traditional businesses who are recognizing the benefits of digitial everything; I really think this is a growth area.

  • Whew…long read.

    I used to think “passive income” meant easy income. Once I came to the realization that work is actually required earning passive income actually became easier. One has to be true to oneself – be honest with what you really want and then shoot for that goal.

  • Wow Yaro, you outdid yourself. One good bit of advice after another – great, awesome post. I think many people will be helped by this one post! You touched on the one area I’ll be focusing on for the next few months – creating training to help people do what I do. Really excited about finally making it a reality. Back in 2000 I created a seotutorial in video format that told a LOT of what I was doing and it made some cash back then – but, was before it’s time!

    These new courses will focus on ebusiness and filling in all the pieces of the puzzle that people don’t ‘get’. I’ve found that the biggest problem with training programs is that 90% of them is pure gold… and 10% is assumed that the student knows already or can figure out. I want to present the big picture with my ebusiness training courses and help not only those high level folks missing just a little bit, but those that need it all from a->z – without assuming anything.

    You’ve got my attention Yaro – keep up the amazing articles, videos, and projects!

  • thanks for your article and it makes me keep inspired to have 10.000 monthly income

  • A good post Yaro and totally agree with you. Many people including myself having trouble to take the action to start and let along maintain the discipline to try their very best to be successful in business. I will bookmark this article in order for me to keep moving forward even if I fail along the way

  • What I enjoy about your articles in additional to the lessons abount internet marketing, etc, is the insights about life in general.

  • Very nicely done Yaro–as always.

    I have a friend that was around when I made my firs US $.10 online and she got very excited.

    Just last week she smiled and said she was happy to see that I am achieving my goals on having a business that is automated online.

    Over the years in my profession (30+) I learned to quickly evaluate the good customers versus those that I did not want to work with because of the headaches. I am so over that business model.

    Today, I want to go further and although I’ve had some setbacks and challenges over the past two years–I am slowly getting there with new website ideas, one that I am getting ready to sell, and new ebook products in the works.

    Instead of passive income, I call it residual income. Passive income is never “passive” the work went into it at some time–but the kicker is that you don’t have to continue working on the same income stream because it keeps on going on autopilot.

    Today income arrives frequently from unexpected sources and I look forward to the time when I take down my private client payment options and only offer selected mentoring or coaching.

    BTW I have to say thanks (again) for all your help and integrity for helping me down this road. Your courses were the first I invested in and I am SO happy that I did.

    Today, I am enrolled in a couple of others that are great and informative but find that your model is far above what others offer and although the results are taking time–I am still moving forward and happy to see things growing.

    Looking forward to being at even higher levels by the end of the year so I can be more on autopilot!

  • Yaro, Long, but great and well worth a read article :)

    I like the fact you pointed this out:

    “First, Understand Your Unique Opportunities

    One of the first things I discussed with my friends was taking their present situation and turning it into something that’s less work for them. Sometimes the “lowest hanging fruit” is just a simple adjustment to the business model you are following now, transforming your core skill from labor intensive, to hands-off delivery, or at least much less work.”

    It amazes me how many people make the statement.. “I want to start an online business but I do not know anything about Internet Marketing, where would I begin? I have no knowledge or anything of use to share or sell”

    The truth is everyone knows something about something, or knows someone who does ;)
    This skillset is often a great place to start as you can focus on what you already do day to day and convert that into an online and somewhat passive income stream.

    When you think of all the trades alone that could be converted into a one stop online resource for consumers as an information business portal, it is scary. The thing to do is to not look for the “ways to make a million dollars online” with the latest Biz Opp Craze, but to focus on knowledge and skills you already have that other people want to learn about, use or tap into.

    Cool content, keep it flowing, anyone I mention your blog to comes back with nothing but positive comments. Always a good read, thanks.

    Martin Salter

  • There is a difference between the corporation and sole proprietorship style or type of business. If you own a corporation and are employed by that corporation you are working for wages in the form of hourly or salary type of compensation. In the sole proprietorship you work for profit!
    Nevertheless, in the sole proprietorship you don’t work for hourly pay. You work for profit. So when you start writing about business I suggest that you first tell us what type or kind of legal identity you are writing about.
    Think of it this way. As a corporation you think about hourly and/or salary crude and don’t even think about profit until the end of the year.

  • Thanks for the post Yaro.

    I find that even when I am generating passive income it is easy to slip back into work-aholic mode.

    For me, generating a passive income means more than just the systematic or operational ability to do so. It means getting comfortable with working less.

    While It may only be necessary to be physically involved in the Act of work for a few hours a day, I find myself thinking about my business much more than that.

  • This post reminded me of all the different ways that are out there to make passive income. Sometimes we tend to forget that there are different paths than the one we are on and we might have to change direction to make it work for us. I focused a lot of time on PPC-CPA marketing, with very minimal results.

    Earlier this year I decided to spend my time on building valuable content blog instead and now I am seeing first results from that work. It might be small for now, but with dedication and a good system a good passive income is just a matter of time. Staying motivated in building these online assets has been the hardest part for me so far… :-)

  • Hi Yaro, it’s very great idea. I like this article, coz i knew who writen it. Your idea was practical and aplicable..

    Thank you for great information!

  • Hey, where’s Mini Yaro? If there were only an easy test to determine what you were uniquely gifted to do. Since there isn’t, I will take your advice and continue to wop it on the wall to check for stickiness, as the one thing I am sure of is my persistence. You, the expert says that is all you need. Effort, effort, effort. I am just building my blog and adding enormous content, waiting until next spring before my, oh, premiere, if you will. You’ve walked this lady through becoming a blogger, talked me out of down moments just at the right moment with your uncanny, timely emails, answered my questions with the wonderful videos from Gideon on how to set up video, etc. Each step I follow that verifies what you say, increases my faith that you know what you are doing. What are you? God’s right hand man?

  • Its really very motivating post. There are so many things that I enjoyed reading especially three steps to start a new online business. This forms the core issue in success/failure of any business.

  • Monster post Yaro, but good reading and one for the favs.

    I can really identify with a couple of these situations:

    I do well 9-5 but it’s an office job at the end of the day which lacks the flexibility and freedom I require to feel truly satisfied.

    I also do private work in the evening to augment my income, but have come to realize that a one man band can only play so many tunes at once which makes generating income from clients patchy at best (our exchange rate limits outsourcing too).

    I have fortunately come to realisation that it’s time to take the road less travelled and walk the path of the self-employed entrepreneur. To this end I’ve been investing in my own time to create passive income streams and I know that it’s the right decision.

    Stay tuned and watch this space, I’m developing. I’m a few client jobs away from freeing up time to check out your Membership Site Mastermind training program, I think it will be an awesome weapon in my arsenal of knowledge.

  • Thanks Again,
    Yaro, another great post.

  • Great as usual, Yaro. Thanks for your continued inspiration. I liked this post because of the wide variety of suggestions. As you say, there has got to be something out there that fits a person’s personality and means. It is just a matter of finding them!

  • Thanks for this.
    It has taken me almost 2 years to learn these outcomes.
    Lets hope the newbies find this first before committing themselves.

  • Yaro . . . . Andrew Warner’s webcast interview was one of the most inspiring I’ve seen in a long time. Your questions were right on point and his responses led to some very inspiring thought processes we could all use. Thank you so much — I appreciate it.

    Rudy

  • “Every path walked leads to another selection of doors to open.”

    This passes my ultimate test of an inspirational quote, Yaro. Which means I have a yen to embrodier it on something. However, think I’ll take you call to action to heart and just write it on a 3×5 to post over my computer:)

  • VAL

    Yaro,

    Fantastic post filled with solid information – I like the way you speak on paper.

    Definition of Passive Income Online is subjective and as one reader mentioned, the only way to achieve moderately passive income is to outsource to competent 3rd parties.

    My great challenge is of course, too many potentially “Big Ideas”. It usually starts with “Ah, it would be great if….”. Then, I go into notes on paper mode (Analysis), if the numbers make sense, then into Business Plan mode, then Development of said “Big Idea”, Production (Website, sales/order systems, sales material, processing, customer service, account management….etc…). By the time the idea is ready to launch, I am out of steam. Literally.

    I have concluded that what I need is an Outsourced Sales Team that can begin marketing and selling of the “Big Idea” product or service. I have yet to find a reputable company that can provide outsourced Sales/Marketing.

    For this reason, it is necessary to build an internal infrastructure that functions as a traditional brick & mortar business – that includes an office space, employees, management, over head – Although the product or service may be distributed or accessed online, there has never been a Web based business that has been able to operate passively in an online environment and made it to the ranks of the Fortune 500 without the traditional process of functioning like a traditional business.

    Aside from maybe Apple (Two guys in a garage start-up), most great web related businesses do not begin with a single owner performing every task related to the business. Further, most were formed as a corporate interest and/or had support of a corporate interest (Myspace – Intermix Media) or the backing of a VC company (Amazon, Google, Facebook).

    Having said, there is not such a thing as truly, significant “Passive” income in an online business, some level of work and collaboration with others will always be required.

  • Thanks Yaro; reading this great blogpost of yours, I just realised that I’ve come a long way … but I haven’t quite arrived yet. I agree very much that the way is the destination, but it’s still nice to arrive somewhere occasionally and celebrate for a while.

    Having taken your Blog Mastermind program some time ago I decided to take the route of creating my own products together with a programmer colleague and market them online.

    It’s taken a year to develop our first one; ‘SiteKist’ is a pretty revolutionary computer program to easily create eCommerce websites and we market it as a membership site; I thought we had now taken the biggest hurdles … until the serious marketing phase began a few weeks ago and I realised how difficult that is without having an established audience.

    When we’ve tied up a few loose ends, maybe I should contact you for assistance. Anyway, we will certainly persist; we have the passion and stamina to carry this through … it certainly takes quite a bit of that to break through the surface.

  • Very inspiring and informative. Thanks Yaro for another great post.

  • Jo

    Absolutely awesome article! I picture internet as a vast jungle. If you do not stick to specific paths, you either go astray or totally loose your direction towards your destination. And you just have mapped out those specific paths for your subscribers.

    Inspiring is the word. I also can feel your honesty. You have just earned someone’s trust.

    Thank you.

    Jo

  • Hi Yaro, it is great article about online business and how do we organize so nice.

    Thanks for sharing this information to us and waiting for more unique ideas from you.

    Alam

  • I am a computer consultant and can vouch for what you have said. 3 years ago I started investigating making an income online and I have been gradually moving from offline to online ever since.

    I have more time with my family, less commuting in construction (summer) and bad weather (winter).

    And I LOVE making money while I sleep, play, vacation, etc.

    At my website I help others learn to make money online with article marketing (no money to start) and pay per click (if you have money to invest).

    Regards,
    PCRoger.

  • Your posts are always great motivational tools with a load of information and this one was no different. I found the part about buying websites particularly interesting.
    thanks

  • Ben

    Great post Yaro, I’ve been at this a while and your post provided some powerful and much needed reminders.

    Cheers!

  • Wow, you covered a lot. I am glad I read this as I been fighting the urge to do some webdevelopement and consulting as I can do it and have some clients lined up but worry it will take away form what I really want to do and know it will not scale.

    I been doing small business IT consulting for years but moved to blogging and online business early this year as I realize I only have so many free hours so i am limited to what I can make. Plus some clients are just a pain to deal with what the service but complain about the price.

  • Hey Yaro,

    Some writers cramp? Excellent, down to earth ideas.

    Thanks, I have battled with settling down into find my “niche” and at long last this has confirmed what my gut feel was, I will continue with my own knowledge base of 30+ years and build.

    Lots of great ideas for later.

  • Rob

    I certainly fall in the category of knowing a lot about a lot of things, but not specializing in any one particular thing. I would add that it does take very long hours, but so does any full time job to be successful at it.

    THanks,

    Rob

    • This is very difficulty to get the right information and filter out what you need. But stay tuned because one day you will know it.

      Cheers,
      Studenten

  • Great advice – as always.
    I’m also finding myself in situation of using a huge amount of time servicing clients in my translation and event management business, over and above finding new prospects.

    I’m in the process of transforming my little website into a more passive income generating one to help my income stream.

    Rachel

  • [...] You can read Yaro Starak’s article “How Can You Make Passive Income Online?” here. (Well worth the read!) Share and Enjoy: [...]

  • Your Message
    Your guide to passive income was thorough and sobering. I’ve been avidly reading your newsletters and blogs, over the past 4 months, using some of the techniques you’ve suggested. The process has been slow and tedious, with few readers. Perhaps my topic is not very popular. It’s about abstract art. But today your extensive and revealing post was inspiring. I hope to press on with my writing. Thankfully, you remind us of your journey over the past 5 years, reaching where you are today. It didn’t happen overnight. I have to change my approach to doing little, distracting jobs in advertising and focus on serious priorities, that will lead to my enjoying a steady, strong source of passive income.

  • Great post Yaro

    I liked your comment…”Commit yourself to learning and executing what is taught over a period of at least three months, preferably more time – even up to a year”

    From Federal Express to Kentucky Fried Chicken, these empires were not created overnight… (sorry for the Federal Express pun)

    You mentioned quality training but it’s also important to find a trusted mentor. Sometimes we don’t make a sale because we tell people the truth.

    Cheers
    Warren

  • You really outdid yourself here. I took the time to read from beginning to end. (Well I enjoyed a beer in the process! ) Great info and balance to your message. I especially appreciate all the links to valuable resources for further research.
    I found your commnets about people not making money coming from their willingness to give up just a bit too soon – true and tough to hear. THANKS.

  • Thanks Yaro,
    You’re so full of wisdom. One can tell from your work, you really love what you do. I enjoy all of your posts.

  • The key is to pick one type of business that resonates well with yourself, right from the start. This minimises a lot of time, energy and money spent. Many people had no idea what they really want to focus on so they get distracted and sidetracked easily, changing their minds along the way.

  • Hi Yaro.
    Yeap I think you are right. After working all these years (13 already) in differenct clients,business etc as Web developer, Project Manager, System & Business Analyst I realized that I should give it a try and start my own blog. Not necessarily for passive income. I did it because I really wanted to feel that Im working on something that’s mine..

    If you have time, I’d like to have your comments on http://www.tipsonconsulting.com

    Cheers,
    Chris

  • Yaro, I have followed your website for a couple of years, I can say I relate to your way of thinking about business. Failure is the best learning tool yet it can be the most disabling. Having the drive is everything, not letting yourself sabotage your efforts and staying focused on your passions make you special.

    Like you say, not everyone will be successful but I really believe those that do succeed have put success as a high priority and have taken action to make it happen.

  • [...] people have heard about flipping houses, but did you know that you can also make lots of money buying and selling websites? It is true and there are people making tons of income from doing just that. It is not as easy as [...]

  • Thanks for taking the time to put together this detailed post. I’m just now exploring ways to turn my blog into a recurring income generating machine and this was definitely a great resource to help me figure out my plan.

  • I came across your site by accident a few days ago, and I’m so glad I did. You have some great information and I’m currently at a turning point in my business deciding really where I want to take it and offering information products as a was to supplement the services I offer seems to be the logical step. This article was informative, interesting and very worth the read. It’s long, yes, but full of great information.

    Thanks for being so generous with your information!

    Renee

  • Yaro,
    Great post. I really liked at the end how you throw in “failure” and the importance of being “motivated by the journey.” Most people underestimate the value of failure and what you can learn from it to modify your course.

    My wife and I have launched several endeavors, being in real estate both as a realtor and an investor, and also being a financial advisor. Along every step, we learned a lot. And all that experience brought us to the next project. So, as you said, looking back on our experience, I would agree that I would tell myself to be motivated by the journey and the great things you learn along the way. These new great things prepare you for bigger and better things.

    A new journey we just embarked on was launching a blog after taking your and Gideon’s BecomeABlogger course. We hit the ground running with launching this project and look forward to a passive income, but we are well prepared for the work that must go into building it.

    We continue to love the great information you provide on your site. It is truly down-to-earth advice for entrepreneurs. We like your style and we really loved your course.

    Keep up the great content.
    Sincerely,
    Elliot

  • Excellent article Yaro! I like how you pointed out ‘pure’ passive income vs low work+high income. In my mind there is no PURE passive income :)

  • Great article! The enjoyment of doing something and the ability to learn from your mistakes are key essentials to success. Passions differ but we all have a common goal to succeed.

  • Passive income is great. Fewer people are writing about it now. I can’t believe you didn’t mention Google AdSense. I guess you’re targeting businesses with a product to sell, but AdSense is great for blogs and information websites.

    I went to school Thursday (2009-09-24) and found I’d made $10 from AdSense when I got home… without doing any work on my site! That’s the definition of passive income. That was all made through people checking the “Insert Google AdSense ads to support Tweet This” option in my Tweet This plugin for WordPress. Still good though. :)

  • Great article, Yaro. It’s true that people think “passive” is synonymous with “no work”, however it takes a boat load of effort to start generating real passive income.

    I’m just entering the world of it myself, and while I’m not exactly driving a Lamborghini (…yet!), I’m failing my way forward, learning a lot and having a blast.

  • Yaro

    Alot of info to digest. It covers every aspect of internet marketing. I like the buying a web site idea and will check out flippa.com

    Thanks

  • Your Message Hi Yaro: Thanks for the post. I am at the beginning stages of trying to create passive income online. I have set up four blogs, each one reflecting my passions, writing, travel, education, and spanish language instruction. I have been a Spanish teacher for fifteen years and I want to continue teaching, but in a different way, using the net instead of physically going to a job each day and dealing with the stress. (The stress is really affecting my health.)

    I like what you said about creating your own products because I have fifteen years of educational products waiting to be produced and marketed online and of course I need to figure a way to teach langauge online. I’m enjoying the journey as I read and continue learning, but this week in particular was a rough one for me mentally. Your post arrived in my mailbox at the right time because I again feel motivated and hopeful. Thank you for doing what you do. I hope to one day have a yardstick commute, and more importantly, the flexibility to work whenever and wherever I choose while doing what I love; writing, traveling and educating.

    Rebecca Ford

  • This was a nice, long, informative post, thanks man! Keep it up

  • Very nicely done, Yaro. Great information that provides perspective on monetization opportunities, enabling one to plan ‘exits’ and to design the path to get there. Really, nice job.

  • Well Yaro, I probably am not considering myself a newbie as I got started with online business 2 years ago but STILL man this post is so useful to me.. I know a lot of people would find this one useful as well..

    Thanks..

  • I’ve been away from the computer with broken ribs for the last week and I must say that this article was a definite brilliant first read back. Easily one of your best Yaro. Thanks

  • Wow, great article Yaro. This could have been a small chapter in a book! Nice work.

  • An exceptional article, thank you, Yaro. Thought you and others might find it interesting that the (American) Internal Revenue Service defines passive income as “any activity” in which the taxpayer does not materially participate.” Indeed, income earned as a result of capital growth so powerfully leveraged is worth the initial investment in time and effort to develop.

    My best to all fellow entrepreneurs engaged in this endeavor.

  • [...] however, I tried to persuade him like “You have bazillion opportunities on the Internet that to make a passive income online is not an unachievable dream.”  Though I have written a few articles to earn money online, all [...]

  • Hey Yaro,

    I liked this post because it made me nostalgic about my first job. I started working first in a consultancy tech firm, and believe me that phase of my life was really frustrating period of my life. And the worst part was dealing with the clients who sometimes gets on my nerves, but I had to pretend to be calm.

    You have nicely clarified the ideas of making the passive income. I liked these suggestions.

    Thanks for this wonderful post.

  • This is great Yaro!

    You know, your article made me realized that though some income generating ideas do not really create passive income, they may actually develop into one that does generate profit continuously with less participation. Just by developing it like adding automation or creative leveraging, you can make unique way of making a fortune.

    Thanks for this! It’s nice to find people who care. People like you…

  • An exceptional article, thank you, Yaro.Great information that provides perspective on monetization opportunities. I know a lot of people would find this one useful as well..

    Thanks
    Sandi

  • Flipping websites is something I have found quite effective for generating a little extra cash, but you have to do your research and due dilligence on the site you are buying.

    Some very good info here, i’ll probably need to read it a few times for it all to sink in though!

  • Hi Yaro,

    I got a site flipped this week :)

    I built it from scratch – had Adsense income of $25 per month. Sold for $250.

    Not bad. Thanks for the post.

  • Hey Yaro thanks again for another good reading. Aboutthe passive income, it need a lot of work to reach the good numbers.

  • As several others have commented, I think it can be distracting to focus on “pure” passive income sources. I think you have a great definition of passive income. To me, it is an overall strategy to build several income streams that overtime will take less and less of my effort.

    Thanks for the article. It is a source of inspiration for me to keep on pushing on!

  • Hi Yaro,

    I totally agree about the change of the business model that consultants need to adopt. I’ve been in the same situation before and thought there should be a better way of earning rather paid-per-hour or paid-per-project basis. Your article reinforce my thoughts and I’m glad I’m not alone. Concidentally I’ve just compiled a post on various online business models, your article has just given me more inspiration on this topic.

    Thanks again for the great post.

  • Fantastic article! I’ll be bookmarking this for sure, and coming back to it time and time again. I really like your point about being ‘motivated by the journey’, it makes so much sense. Thank you.

  • It’s not the first article of Yaro I’ve read, but I’m still amazed at the way he can compare and explain complex concepts. There are many ideas that at first seemed too difficulat to introduce, but after consulting Yaro’s blog I was able to sucessfully achieve many of my goals.

  • Very well said, Yaro. I was getting a bit down about the lack of income from some of my endeavors, so my reading this article came just in time. I’m going to be patient, stick it out, and read more of your articles.

  • It’s a brave new world out there. I’m working on outsourcing to get my online and offline business running themselves and growing without me having to do all the work. Definitely a better way to go. There is no get rich quick plan – but there are plenty of real get rich smart plans. Rich is really the ability to do what you want when you want – not just the almighty dollars. I’ll keep watching your blog. Thanks for the tips.

  • [...] two of my blog comments in stand out: the one on this post at Problogger and the other on this post at Entrepreneurs Journey, with the two delivering several hundreds of visitors combined, which goes on to prove that my [...]

  • Yaro, I have only been dabbling in the online business waters for the past couple of years, Unfortunately, I started my experience by having a failure of the muti-thousand dollar kind! Although I know that based on the comments here, I’m not alone in that boat. But, when your going thru that type of situation it sures makes one feel more lonely than the Mayatg Repairman.

    That’s why I realize that just as you stated, it is so very important not only to learn from your mistakes but to also not throw in the towel because of your failures. In addition, your point about developing and keeping the correct mind-set is ultra critical. With good plan, a wise mentor and a never say die attitude you can usually pretty much overcome any obstacles to building a successful online business.

  • I’ve been attracted to passive income ever since I read Rich Dad, Poor Dad.. thought could only be done through corporation or real estate.. but can be done online as well!

  • Almost one year later i found this, in my opinion, very interesting article. I´m often in the Internet on pages which host in the USA because, there are many unique Information and oppertunities to find new ways to get a passive income.

    Thank you for this!

  • Definitely a lot of options here to choose from, but for those who are beginners, the best way is to start from scratch. One key thing here (like you mentioned above) is reinvesting your earnings. A lot of people who start fail to do this. Their main focus is just to earn some money in the beginning, but by investing those profits, you can get leverage and earn even more down the road.

    I’ve never bought many websites (always sold them, though), but if you know how to spot a profitable site and are confident you can pump out more earnings with a little extra work, it’s worth it. The good thing about buying established websites is that the ground work is already done for you. All that is left to do is to add on to it and put some of your own flavor into it in order to churn out more cash. That’s something that I WANT to start doing, but only once I start making a decent amount of passive income from my current websites.

  • Fantastic Article. I will bookmark this article. I have been attracted by passive income since lot time.

  • [...] How Can You Make Passive Income Online? (at Entrepreneur’s Journey, by Yaro Starak) – If your goal is to create passive income this new year, then this is a great resource to start with. Yaro is one of the best motivators I have come across in regards to making money online. [...]

  • Keep it up, yes passive is not in real meaning, you still need to manage and doing work if you want to keep that income coming, and its possible to make it stream income online.

  • yeh making passive income can be difficult, great article as well full of good info keep up the good work ill be back :)

  • Wow man I searched a lot of articles about how to make passive income and I really like your article and I really like website flipping business. :)

  • Tony

    Great article, thanks Yaro!

  • Hey good, down to the grit article.

  • This is another great article, Yaro! And you have so many really useful articles in your website.. Amazing!

  • hi Yaro,
    Over recent years, I have had some brilliant ideas for sites yet I find that these soon get taken up by others.
    The reason has been my lack of programming knowledge and web site construction.
    I have not approached any web site developers as ideas can easily easily be stolen and taken up to be theirs.
    What are you thoughts for someone in my position?

    • Terence,

      I suggest you stop letting the fear stop you from taking action.

      1. Implement your idea even if you see someone else do something similar.
      2. Hire developers because they want to develop, not run a business, so they won’t steal your ideas

      Good luck!

      Yaro

    • Terence,

      I couldn’t agree more with Yaro. These days there are so many ways to get a website up and running – just look at Fiverr, 99designs and even oDesk and eLance and you can hire competent people who will do the thing for you.

      Ideas are dime a dozen, but it’s the execution and your ability to make it grow and turn into a sustainable and profitable business that makes any one idea unique and practically robber-proof.

      Go for that one idea you believe in, work with developers, start small, test, test, test and scale to grow. It’s way easier said than done but making mistakes is much, much better than inaction.

      Thanks,

      Caleb

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