If you truly want to be financially successful one thing that you need to do is shift your mindset from thinking that you have to trade your time for money (e.g. a job) to finding ways to earn passive income.
Passive income is simply money that you earn no matter what you’re doing. Usually you put in the work up front and then earn money going forward after the work is complete.
For example if an author writes a book they put a lot of work into the book up front but once the book is done and for sale it’ll keep earning money no matter what the author does.
The author is then free to maybe right another book which will also start earning passive income once it’s completed resulting in two separate streams of passive income.
The author can also work on something completely different while still earning passive income from book sales.
Even if you’re working a traditional job where you trade your time for money you’re still able to earn passive income. If you set up a website that makes a little bit of money every day for example it’ll still be making you money while you’re at work or at sleep.
When you trade your time for money either in a job or by doing contract work for clients there’s always a limit to how much money you can earn.
With passive income however there is no limit to how much you can earn and you can set up as many streams of passive income as you want. The more streams of passive income you have the better since your income is more diversified and if something happens to one of your streams you have others to cover you.
One of the best things about starting a blog or a website is that there are lots?of different ways you can earn passive income from it.
Three Major ways your blog or website can start making you passive income are by displaying ads, affiliate marketing or sales of your own product.
You’ve probably noticed that there is a lot of advertising on the Internet and lots of websites run banner or display advertising.
The great thing is that you can also start doing this and start earning money right away.
When it comes to displaying advertising on your website there are lots of options. The most common option is to run Google Adsense.
Google Adsense is a program where you can turn your website into part of the Google Display Network and people can run ads on your website.
Every time someone clicks on an ad you earn a small amount.
To set this up all you have to do is sign up for Google Adsense, get approved (which is easy), create some ads in their easy to use editor and then copy and paste the ad code into your website.
Google bases the ads that are shown off of the content on your site.
For example if you have a blog all about pet cats then Google will most likely display ads related to cat food, cat toys and stuff like that that is relevant to pet cats.
When people run ads on the Google Display network they have tons of different targeting options and their goal is to show their ads on the most relevant sites because that should result in the most clicks and ultimately sales.
When you run Google Adsense ads on your website most of the time they’re related to something your visitors care about which means more clicks and more money for you.
You can always review the ads that showed up on your site and decide to block certain ones if you don’t want them to show.
The amount of money that you can earn from Google Adsense is largely dependant on how much traffic your website gets.
If you only get a few visitors a month that means very few people will click on the ads you’re showing and you’ll make very little money.
Another thing to take into consideration is the competition around your topic. If you write about a topic like investing, real estate or cars then you’ll have a lot of big companies that are running Google Display ads.
This brings the cost per click up which means that the advertisers have to pay more per click and that means that you also earn more per click off the ads on your site as well.
This unfortunately works in the reverse too. I used to have a website about Japanese emoticons that was getting 20,000 to 25,000 visits a day. The site had Google Adsense ads on it that got hundreds of clicks every day.
The only problem was that there was no one out there who wanted to run ads for their business targeting the topic of Japanese emoticons. In the end I was getting a fraction of a cent per click on the ads from the site and the site didn’t make nearly as much money as I hoped it would based on that amount of traffic.
If you do decide to run Google Adsense ads on your website Google does have a tool called the Keyword Planner. You can enter in keywords and see the average cost per click that you could expect to pay if you wanted to advertise for those keywords.
This can help give you an idea of how much money you could make from those topics. If you see something like a cost per click of $3.00 or more then running Adsense ads on a page about that topic could be quite profitable. If you see a cost per click of something like $0.10 that means no one is running ads for that topic and you’re not going to make much money.
I plan to cover Google Adsense in much more detail in a later post and I’ll get into how to set everything up and how to use the Keyword Planner as well.
There are other display advertising networks as well. Yahoo has probably the next biggest network after Google Adsense and it functions in much the same way.
There are also numerous other smaller display networks that you can join and once you start a website you’ll probably start getting emails from them inviting you to join their network.
I’ve tested out a couple of these smaller advertising networks but I was never able to earn more than I could with Google Adsense so I always stopped running their ads after a bit and went back to Adsense.
You can also sell advertising space directly from your website itself. You can set your own price based on how much traffic you want and charge someone $100 a month for example to run their ad on your site.
There are also all kinds of WordPress plugins that can help with this with features like rotating ads every few seconds or geo-targeting ads which means only showing ads in certain locations in the world.
Affiliate marketing is a very common way to earn passive income online.
With affiliate marketing you’re essentially a salesperson for someone else’s product. You’re usually given a link that you can put on your website and when someone clicks that link and then buys the product you earn a commission.
When a user clicks on an affiliate link a tracking cookie is placed on their computer so the business can track their purchase back to you and pay you your commission.
Amazon.com has probably the biggest affiliate program out there. If you visit the great books page on this site for example you’ll see a bunch of affiliate links to Amazon.com. If you click through and purchase one of those books I receive something like 6% to 8% of the cost of the book as a commission.
The Amazon.com affiliate program is very easy to sign up for and it can be quite profitable. They usually pay 6% to 8% of however much a person spends, it doesn’t just have to be specifically from what you linked to either.
For example if you link to a book on Amazon and someone clicks your link and buys that book plus a $2,000 laptop computer you get a percentage of the sale of that computer too!
The Amazon tracking cookie lasts 24 hours and if someone ads an item to their cart within that 24 hour window but doesn’t buy it you still get 90 days to earn a cut of that sale if they end up buying it later.
I plan on doing more posts in the future about the Amazon affiliate program and I’ll explain in much more detail there how everything works.
There are tons of other affiliate programs out there. Many online stores have affiliate programs and there are sites out there that collect different affiliate offers that you can pick and choose from.
Some of the biggest sites with collections of affiliate offers are ClickBank, PeerFly, Share a Sale, Commission Junction?and even eBay.
If you plan to recommend affiliate?products to your audience you have to be careful that you don’t lose your audience’s trust. If you sell out and try to recommend lots of products that suck just to get the commission people won’t follow you or believe what you say in the future. Plus no one likes being sold to on the Internet.
If there’s a product you use that you’re passionate about and that you feel would help others then by all means feel free to recommend it to your audience and earn a bit of passive income at the same time.
Another affiliate marketing strategy that people use will be to make small websites based off of an affiliate product. These websites are usually just a review of the product saying how awesome it is or something like that.
The sites get traffic from either Search Engine Optimization, online advertising or social media and earn money from the affiliate sales.
I’ve tried to build a few websites like this but I’ve personally never had much success with this strategy. All the really good keywords and what not were claimed by Internet marketers years ago so there’s way too much competition here I think.
Selling Your Own Products
Probably the best way you can earn passive income from your website or blog is by making and selling your own products, especially if you’re selling a digital product.
My Japanese emoticons website that I mentioned before didn’t make much money from Google Adsense so I made a mobile app and sold that through my website as well.
You can sell pretty much anything you want but I highly recommend you sell digital products. With a digital product such as an ebook or online course you only have to put in the work up front and then you can continue to earn passive income long after you’re done.
There are lots of ways you can sell your own products online. If you have a WordPress website there’s a free plugin called WooCommerce that you can use to build an online store right on your site.
If you’re a writer and you write a book Amazon has a program called Create Space where you can self publish your own books.
You can write a book, put if up for sale and when someone orders a copy a machine at Amazon will print a copy of the book and mail it out.
Plus you can also use affiliate links to your own books and maybe earn some extra money that way.
If you’re a musician you can put your music for sale online with sites like Bandcamp or iTunes or if you’re an artist you can sell your art through sites like Zazzle.
Keep in mind that if you sell your products through someone else’s website they’ll get a cut of your sales and you have to follow their rules.
I always recommend you sell your own products through your own website where you have full control over everything and you keep all the money for yourself. With tools like WooCommerce you can easily run an online store on your site and take care of everything yourself.
I’ll be covering WooCommerce in much more detail in future posts.
Another popular method for making money from your site is to create an online course or community and charge a membership fee for access. This way you have recurring money coming in every month.
There are WordPress plugins out there that make setting up a membership site pretty easy too.
This was mostly just a rough overview of different forms of passive income you could be earning with your site.
Hopefully it’s given you a lot of ideas of different ways that you can monetize your website or blog.
The most important thing is to switch your mindset away from thinking that you have to trade your time for money and instead switch to figuring out how to create different streams of passive income.
If you need help getting your mindset right when it comes to money I recommend that you check out the Money and Finance section of my Great Books page.
I highly recommend you read?Secrets of the Millionaire Mind and?The Millionaire Fastlane to help you develop the right mindset when it comes to earning money and passive income.
If any of these passive income strategies stood out to you and if you plan to use them on your own site let me know how it goes in the comments.