How to get started with residual/passive income - that very first dollar

I seem to be answering this question a lot lately, so I thought I would write it in one thread so I can just link to it later.  

Two weeks ago, Mike said something about how has no clue how to even get the first dollar.  This one is super easy to answer because Mike has written thousands of posts on permies.  O said "Pick your favorite thing from the permies.com digital market that has a 50% affiliate fee.  Set up for the affiliate program and get an affiliate link for the favorite thing.  Say something nice about it in your signature - complete with the link.  Now hundreds of thousands of people will see your thousands of past posts over the next ten years and maybe one or two will buy the thing through your link each year.  Done."

More recently, somebody said they were finishing high school so they would like to start building passive income.  I wrote:

1.    Do something that brings in $5 per year for the next ten years. You gotta get from zero to anything passive. Here is my list of ideas.

2.    Help people, online, for free. Anywhere. In any way. On your favorite topic(s). Be thorough and magnificent. In a few months, go back and harvest the things you did to help others and see what you can cobble together into passive income.

Maybe those two things should be in reverse order.  

Okay, everybody, what is your advice for somebody that is thinking of passive or residual income for the first time?  How do they get that very first dollar?

Hello there, Paul and all. On the subject of passive income... we've been getting requests to wade into sponsored post territory from media buyers looking at http://www.catintheflock.com.

The way they're proposing this works is to run a post on a topic that fits the blog, but it includes follow links that they create. I'm assured:
a) the content is real and relevant to my blog topics
b) there are no spammy links or advertising bits
c) I reserve the right to reject the content
d) if I want, I can create the content, and they give me the follow links

However, I cannot delete the follow links.

What's your take on this? Is it safe/legit territory in terms of residual income streams? As a former journalist, I feel nervous about it, but I also understand you have to evolve or die. I've been putting out a lot of content w/out a return as of yet for a few years now. I ran one of these content pieces last year, and it seemed OK. The blog content wasn't flippin' fantastic or anything, but it was relevant and a fine post. I made money on the deal, but they didn't come back and ask for a repeat. My blog traffic was low then; now it's higher.

The other question I have is what should I consider in crafting my "publishing terms," which they're asking for, and my "base price"?

Lisa,

I have done this before with two routes:

 yucky route: somebody contacted me and it seemed okay.  They made the first payment (I think it was $35) and did not make the latter payments.  I did this about four times.  It always turned into a big frustration, so I just marked future emails like that as spam.

 nice route:  somebody I knew.  The payments were big and sound.  And all communication was respectful.  Worth it.  

So my answer to your question is "it depends." :)

Nice site, Lisa! I get these offers too. Some of them may be okay, but I've had to unsubscribe from formerly good blogs when they clearly started using these "let us post to your site" services to monetise their blog. The blog posts were well-written, and on topics related to the blog, but became too obviously advertorial.

I can see you're using some affiliate links there already. Looking for more services and products you actually use and can legitimately recommend and checking if they have an affiliate program is a far safer way to go that won't risk losing your existing readers. Another option could be to take blog posts on particular topics, especially ones that answer questions and give solutions to problem areas newbies to urban farming/ wildlife gardening/whatever other areas of expertise you have, and bundling them into ebooks. Sites like Amazon's KDP program or Draft-to-Digital make it easy to produce attractive ebooks. Non-fiction ebook formatting is trickier than fiction (my area of expertise), but KDP does have a Create app to help with that. For non-fiction ebooks on sites like Amazon or iBooks, absolutely the worst thing to do is upload a pdf, though that would work fine for direct sales.

Ha - and I just noticed you're already doing really nice fiction ebooks, so I will shut up! Sky Harbor publishing is your own press, I hope? You're not losing money by letting someone else publish your books? All I'll say is - don't underestimate your non-fiction expertise. You've clearly done a load of interesting stuff and have a lot of valuable information to share. Just think how best to package it.

paul wheaton wrote:Lisa,

I have done this before with two routes:

 yucky route: somebody contacted me and it seemed okay.  They made the first payment (I think it was $35) and did not make the latter payments.  I did this about four times.  It always turned into a big frustration, so I just marked future emails like that as spam.

 nice route:  somebody I knew.  The payments were big and sound.  And all communication was respectful.  Worth it.  

So my answer to your question is "it depends." :)

Paul: Thanks for weighing in. The one time I did this before, they did pay, and it was fine. The media buyer approaching me this time seems a bit bigger, and legit, though you never know. I guess I could try it and see!

Jane Mulberry wrote:Nice site, Lisa! I get these offers too. Some of them may be okay, but I've had to unsubscribe from formerly good blogs when they clearly started using these "let us post to your site" services to monetise their blog. The blog posts were well-written, and on topics related to the blog, but became too obviously advertorial.

I can see you're using some affiliate links there already. Looking for more services and products you actually use and can legitimately recommend and checking if they have an affiliate program is a far safer way to go that won't risk losing your existing readers. Another option could be to take blog posts on particular topics, especially ones that answer questions and give solutions to problem areas newbies to urban farming/ wildlife gardening/whatever other areas of expertise you have, and bundling them into ebooks. Sites like Amazon's KDP program or Draft-to-Digital make it easy to produce attractive ebooks. Non-fiction ebook formatting is trickier than fiction (my area of expertise), but KDP does have a Create app to help with that. For non-fiction ebooks on sites like Amazon or iBooks, absolutely the worst thing to do is upload a pdf, though that would work fine for direct sales.

Ha - and I just noticed you're already doing really nice fiction ebooks, so I will shut up! Sky Harbor publishing is your own press, I hope? You're not losing money by letting someone else publish your books? All I'll say is - don't underestimate your non-fiction expertise. You've clearly done a load of interesting stuff and have a lot of valuable information to share. Just think how best to package it.

Jane,

- Thanks for your compliments on the site. It's a labor of love, so I appreciate that.

- I have Adsense ads, but they are not true "affiliate" links, as I understand those to be a more direct relationship of a percentage paid for mentioning/featuring a product. I have made zero dollars on the Adsense ads.

- I am an old hand at self-publishing... which is a long story for another day. Yes, Sky Harbor is my imprint. I made money on the first book but not on the 2nd and 3rd, as by then the self-publishing bubble burst, and I needed to make a real living and could not devote the time to essentially churn out a book every three months on spec, or my books just weren't resonating at that point, or a million other reasons they haven't monetized.

- Thanks for the props on the non-fiction. I've been thinking the same but see that as more of a long-range plan still taking shape. Glad to hear you think it's not crazy talk! Cheers!

Okay, everybody, what is your advice for somebody that is thinking of passive or residual income for the first time?  How do they get that very first dollar?

Maybe I should change the question:



For those of you with any residual income, how did you get your first dollar?

paul wheaton wrote:

Okay, everybody, what is your advice for somebody that is thinking of passive or residual income for the first time?  How do they get that very first dollar?

Maybe I should change the question:

For those of you with any residual income, how did you get your first dollar?

- Offer online teaching, guiding, tutoring sessions on topics that you are either an expert at or you are confident about such as:gardening, painting; coaching; mentoring; carpentry; math; writing; etc.
- Writing editing services
- Graphics

Bruce Katlin wrote:
- Offer online teaching, guiding, tutoring sessions on topics that you are either an expert at or you are confident about such as:gardening, painting; coaching; mentoring; carpentry; math; writing; etc.
- Writing editing services
- Graphics

Please help me to understand the passive or residual nature of these.

paul wheaton wrote:

Bruce Katlin wrote:
- Offer online teaching, guiding, tutoring sessions on topics that you are either an expert at or you are confident about such as:gardening, painting; coaching; mentoring; carpentry; math; writing; etc.
- Writing editing services
- Graphics

Please help me to understand the passive or residual nature of these.

Many of these I have created self-guided recorded programs. Income in while sleeping.

I make a fair chunk of my income online, and most of is it what could be classed residual. There are things I can actively do to promote it and increase the income, but if I did nothing at all, there would still be some income. Enough for someone to live a simple and frugal life, growing much of their own food and harvesting their own wood for cooking and heating.

For most of us, starting to earn passive income is what Paul said:

Help people, online, for free. Anywhere. In any way. On your favorite topic(s). Be thorough and magnificent. In a few months, go back and harvest the things you did to help others and see what you can cobble together into passive income.

To start, ask yourself what you're the go-to person in your community for - in your family, your friends, your neighborhood, your church, your favorite online forums? What are the problems people come to you seeking help with? What are the recurring patterns in the replies and the support you give? That's your area of expertise.

Then it's a matter of packaging your expertise, into blog posts with affiliate links, an ebook, a video course. There's a time investment, but most of these can be done with no or minimal expense. Now you have a product to sell or to give away.

People hold back because they don't think what they have to offer is good enough, or they see the market is already crowded with similar books or courses. But you have something unique to offer. Maybe that's a way of doing things not many other people are trying. Maybe that's a particular set of challenges you've had to overcome. Maybe that's something from your own unique life experience that helps give you a different slant on things. Whatever it is, it's your unique selling point. If you don't know what that is, ask your friends.

As for not being good enough - maybe it is, maybe it isn't. We're not the best judges. If you aren't sure you can charge money for what you have to offer, give some away. Ask people what they think of your book or your course or your site. And when it's enough -- not perfect, but when you have a minimum viable product -- put it out there with a price on it and see what happens.

The main thing is to start! Just start. I write fiction, and launched my first book 6 years ago. I don't earn a lot, but I've built up a readership. What I earn would be enough to get by on if I had to. Okay, if the economy completely crashes, maybe I won't earn enough. That's why I'm squirreling away what I can now and intend to buy land as soon as I can. But I have friends from years before I started seriously writing for publication who also taked about doing the same thing. They're still talking about it. So start now. Don't be the person still talking about doing it in six years time. You earn your first dollar by doing something.

Hi Jane,

Great post.  I couldn't agree more. The biggest cause of failure is the failure to pull the trigger.  I have encountered many fantastic planners in my life and very few doers.

My first dollar came by putting a product on a site that does some advertising for me...sites that already draw a crowd and I just have to fit into the right search terms to be found. I did Amazon and Smashwords for an ebook and TeachersPayTeachers for a few files of school curriculum.
I have a blog with very little on it that hasn't been updated in a couple of years, but I just got a small surprise check from an affiliate link. I credit that to having info that stays relevant rather than following short-lived trends.

My first dollar would probably have come from investing savings in something that paid interest or dividends.  I guess my first savings account in a credit union as a kid would have yielded my first buck of passive income.  In more modern times as I've focused more on developing such things I did start with bank CDs when they were paying a higher rate of interest than they are as I type this now.  Then I went to a US savings bond whose interest rate is tied to the inflation rate (or more accurately whatever the government says the inflation rate is.)  Next was a corporate bond, then various real estate things.  These approaches do have the potential to end up losing capital if things go bad though.  

For passive/residual income streams where I might make nothing but shouldn't lose anything my first thing was probably affiliate fees.  When I first started my blog site I signed up to be an Amazon Affiliate as well as a Permies Affiliate.  Both have made me a bit of coin, but to be honest not that much.  I guess I'm not really all that aggressive in my sales efforts on that front, and I kind of tapered off on making regular blog posts too.

What has been my most successful residual income stream so far was something I had never originally thought about until I was approached to do it.  In the art metalsmithing world I'm "famous".  I use that term REALLY loosely because I know the fame doesn't travel far at all beyond that little microcosm.  However, I do have name recognition for what I do, which is a lot of hammering on metal.  So one of the best artisan hammer makers in the business, Saign Charlestein, contacted me to see if I would be interested in developing a signature hammer that would bear my name.  He would make and sell them and I would get a percentage of the sales.  I knew he did quality work as I was already endorsing some of his hammers, so I happily agreed.  We then developed the Huang Raising Hammer and sales have exceeded my expectations so far.  Plus when putting all this together Saign also gave me a coupon code I could use for people I direct to his site from my site that gives customers a percentage off anything in his store and pays me a small commission for the referral.  Essentially it's another affiliate program.  It's a small niche market, but it has worked out very well for everyone!  We may be developing another hammer later this year too.