Creating Passive Income on the Side

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I am all about creating passive income streams instead of trading hours for dollars.  Creating passive income streams can be established in pretty much any profession or discipline.  One must however have this mindset so that when opportunities come across, you can recognize it and seize the advantage.

My favorite way to generate passive income is by establishing niche content websites that attract organic (or natural) traffic over time.  I then convert the traffic into advertisement revenue, affiliate commissions, leads and referrals, customers for my digital products such as ebooks, etc.

I have also made a good amount of passive income by investing in real estate (rental income) and investing in a small business (monthly profit sharing).  Similarly, there are many other ways that I am either not aware of, don’t have the “know how” or lack the time to pursue because of other priorities.  I really don’t want or need to because I am happy spending my time the way I want and am content with the multiple streams of passive income that I have established over time.

This post is meant to highlight some other opportunities to creating passive income on the side for you if you are involved in any of the following disciplines.  However, I also encourage you to think beyond the concrete examples in this post.  What applies here can be applied to pretty much any other subject matter.  Like I said however, the key is to become aware of that so you can take advantage of the opportunity when you find it.

Because side gigging is a trend on the rise, many people today are involved in various activities that earn them money.  A majority of these individuals have a full time job and a side gig that they work on as freelancers or as entrepreneurs trying to establish a longer term business.

Most people, especially contractors and freelancers, will agree that finding clients to establish a constant stream of work flow is challenging, and often times come in spurts.  If you are a freelance photographer for example, you could be busy for months (especially during busy wedding season) but then be idle for several others.  Similarly, a teacher usually works 9 months each year and has 3 months of summer vacation.

Preparing for downtime needs to be factored into your annual forecast, and a good way to use that downtime is to find ways to use it effectively to meet your goals.  If your goal is to be better off financially and create more flexibility (time) and freedom (ability to do what you want when you want), one effective way to use that down time is to create a passive source of income using a business model that will help you achieve your objectives.

A teacher is paid for the entire year, but freelancers and contractors, especially ones who do it full time, do not have steady paychecks to rely on.  Thus, creating passive income is a worthwhile endeavor no matter how small or large of an income stream is involved.  Passive income models usually are scalable, which means that you can grow your income much more than the proportionate effort you invest in the activity.

Creating Passive Income Avenues

There is a rapidly growing group of niche websites created to target freelancers and contractors in various disciplines.  These websites are a great place to start if you are looking to make some extra cash without having to go out of your way to earn it.

The process is usually as simple as filling out a quick application, uploading your material (work) and then just continue on with your regular work.  As your work is discovered over time, someone will likely pay you for it.  This usually happens with time, and the more work (product) add to your account, the more you increase your chances of getting paid.

What kind of work are we talking about here?  Pretty much anything you have done (produced) which you don’t need or have a use for.  Photographers, designers, developers, musicians, writers often have left over or client rejected work that someone else may want.  Even incomplete work such as program files and business ideas can be sold on these websites as is or by putting a little effort to complete them.

Consider the Photographer, Artist, Musician, Programmer and Aspiring Entrepreneur

The Photographer – chances are a photographer has random images that he or she has taken during down time, training, classes or even on the clock but simply have no need for them anymore.  What good are the photos doing sitting on a hard drive somewhere.  Why not sell them as stock photography?  Websites like 123rf.com are in business just for this.  You get paid each time someone downloads your photographs.

The Computer Artists – Can’t tell you how many people I know (including myself) who have designed banners and logos on Adobe Photoshop or similar programs that were abandoned.  These abandoned pieces of art are still sitting on computers.  Why not submit them to websites dedicated to selling computer generated art to those that need it?

The Musician – Many musicians play live music as side gigs in bars, restaurants, private parties and other such events.  Why not record these pieces (since no one else has the rights to them) and then sell them on royalty free music websites?

The Recreational Video Creator – The same goes for those who shoot videos for fun.  Why not upload them to video sharing sites and get paid for advertisement or affiliate activity? YouTube is a great avenue where people upload videos and benefit from the advertisement revenue sharing program YouTube has in place.  You can even have your videos available for sale on other websites.

The Article Writer – There are a million and one article writers out there that have excess articles either because of “miss”-anticipated client needs or clients who rejected their work.  What’s one man’s trash can be another’s treasure.  Article writers can submit articles to article banks that sell them.

The Programmer – Similar to article writers, programmers too have rejected work, incomplete coding files, complete coding files that have no use and are free floating on their hard drives.  All this stuff has good value.  Envato is a website that is heaven for programmers.  Check it out.

The Entrepreneur – Here is a classic one.  There are people out there who are quick to generate solid business ideas but do not implement them for various reasons (time and money being the biggest).  There are now websites that allow idea creators to submit their ideas. These websites provide a teaser to the reader, and if the reader likes they can pay a couple bucks and view the entire idea.  Some even have detailed business plans attached, which cost more money to view.

As you can guess, creating passive income producing potential can grow over time the more material you submit and the more the user community gets exposure to your work.  You just have to ensure that your work is indeed yours and free of any copyright.

Payments vary a wide range and depend heavily on whether you are selling your work for a one-time payment or whether you opt for selling it numerous times for a royalty stream (lower payout but higher volume potential over time).  These arrangements are typically titled as “exclusive” and “non-exclusive”.

Whether you are good with coding, video production, music, creative design, or one of many other creative disciplines, there are websites online dedicated to what you do where you can sell your output.

The best part is that you can opt to have your files sold several times to various buyers for a royalty, therefore providing passive and residual income from work that you have already created once.  With work product files submitted, you can establish a decent and consistent stream of side money to help supplement your main source of income.

Readers: So are you contemplating any ideas on creating passive income?  What are you thinking?

Read some of my additional thoughts on creating passive income to build multiple streams of income over time.

Sunil
Salvaging Excess

9 Responses to “Creating Passive Income on the Side”

1. Evan says:

   October 28, 2010 at 8:14 am

   Besides the Blog, I keep coming up with business-website ideas. I just launched my first one a couple nights ago!

   Reply
2. Sunil says:

   October 29, 2010 at 9:03 pm

   Evan,

   Would love to hear more elaboration on the “business-website” ideas. What site did you start?

   Reply
   • Evan says:

     October 30, 2010 at 10:29 am

     Sunil,

     Check it out!

     http://www.myjourneytomillions.com/articles/creating-alternative-stream-of-incomemy-first-nonblog-website-part-i/

     Reply
3. Sunil says:

   November 3, 2010 at 2:31 pm

   Evan, finally had a chance to check out your journey.

   You speak from first hand experience, with tried and tested examples. This resonates with people and I have no doubt your blog will do well. I like its clean look and feel.

   Interested in knowing how the monetization is going considering that it is relatively new and I saw Adsense snippets? How else are you monetizing the blog?

   Congratulations and keep up the good work. I will be joining the Yakezie challenge shortly.

   Reply
4. The wealth planner says:

   November 17, 2010 at 8:47 am

   As a financial planner, I am glad to hear that the plan I propose to my clients is working for you!

   It is my opinion that the old idea of hording a lot of cash and then living off it during retirement is not only outdated, but down right dangerous. too many people are still subscribing to that idea, yet finding themselves in a position of having to work a long way into their retirement, cutting down on luxuries and convincing themselves that they love it… Very, very sad indeed…

   Reply
5. The wealth planner says:

   November 17, 2010 at 8:48 am

   As a financial planner, I am glad to hear that the plan I propose to my clients is working for you!

   It is my opinion that the old idea of hording a lot of cash and then living off it during retirement is not only outdated, but down right dangerous. too many people are still subscribing to that idea, yet finding themselves in a position of having to work a long way into their retirement, cutting down on luxuries and convincing themselves that they love it… Very, very sad indeed…

   I like your journey – good luck with it!

   Reply
6. Sunil says:

   November 17, 2010 at 2:38 pm

   Glad to hear that. What kind of feedback are you getting out there in the market? It’s not conventional wisdom what you preach, so I am curious how those that you know perceive the idea to be?

   Reply
   • The Wealth Planner says:

     November 17, 2010 at 7:10 pm

     It sure isn’t conventional, but it makes more sense. people are a bit sceptical at first, but that changes eventually.

     And also, South Aficans are obsessed with owning property, so if I propose something that might involve buying property, it really interests them.

     Reply
7. Sunil says:

   November 17, 2010 at 7:53 pm

   Great point about cultural preferences. From my experience, South Asians prefer investments they can see, touch and feel, whereas in the West shuffling paper to create wealth is a common method preferred by many (i.e. stocks)

   Reply