Passive income streams, passive income opportunities, residual income ideas…no matter what you call it, MOST people mean the same thing when they say residual or passive income…how do I make money without putting in extra time? AKA…time freedom. How do I create something once and benefit from it multiple times over again? While there are differences between the definitions of passive and residual income (which I explain in this blog by citing an in depth article on this topic!), most people say residual when they really mean passive…so for the sake of this, we’ll refer to them as the same thing
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What is Passive Income?
According to this article, passive income is…“Income that is earned through investments, real estate or certain internet ventures. Once the initial investment has been made (whether it be in time or monetarily), the individual does not have to be actively involved after that to make money. View yourself being passive and what do you see? Someone sitting, being lazy and inactive! That is just how passive income works. You don't have to do anything to make the money you receive.”
What is Residual Income?
“Payments made to an individual based on a specific time table after a sale. The amount of each payment is normally a pre-agreed upon amount. Although not an on-line example, royalties are considered to be residual income. Whether the person is a writer, an actor or an illustrator, these people get paid for works that get sold and re-sold and placed into syndication.”
What is the Difference Between Passive and Residual Income?
“When you look at these definitions, you can see that residual income can be called passive income under most conditions, but the reverse is never the case. Once you have put significant work into making the money, you are looking at residual income that will turn passive with time.”
Mistake #1 People Make with Residual Income: They Don’t Do Market Research
One of the biggest mistakes I see people make when putting out a product that they want to make passive is that they don’t do market research!!So…what IS market research?
I used to be terrified of this term, and it was because of definitions like this…
“the action or activity of gathering information about consumers' needs and preferences.”
In my not-so-fancy words…it’s finding out what your ideal customer actually NEEDS and WANTS and what words they need to hear to actually BUY it.
The worst thing that could happen with passive income is that you spend all this time creating a product/program that no one actually NEEDS or WANTS OR you’re not saying it (marketing it) in a language that they’ll respond to…so you don’t sell anything (or very little).
We THINK we know what our ideal client wants, but do we REALLY? Until you do the research and find out 100% that not only do they WANT and NEED IT, but they’ll also PAY FOR IT, you’re throwing spaghetti at the wall (as my good friend and Instagram Expert, Isabella Silverio @isabella.guava says).
I didn’t make $7K on my first launch of my Ditch the Diet Program because I just threw something out there and hoped it stuck…I did a SHIT TON of market research and KNEW what my audience wanted and NEEDED most. You can check that program/sales page/etc here. ALL of it was done with extensive market research-and made putting the sales copy/emails together MUCH easier.
A few ways to conduct market research:
- Poll your audience (on Instagram Stories/FB Community/FB Page/Email List)
- Make a survey and email lit to your current email list/ask your ideal clients/social media audience to fill it out
- Interview 10 of your ideal clients asking them what they need/want/struggle with/what’s holding them back from (whatever your specific topic is)
- Interview your current clients asking them the same questions as in #4
- Post in Facebook groups with the polls/surveys/questions that your ideal client hangs out in (but be sure to ask the Admins if it’s okay first! You want to respect their rules)
- Check out your competitors! What’re they putting out there? How’re they saying things that are resonating with their audience?! Don’t copy verbatim OBVS, but take note and make your own! It’s workin!
ACTION STEP: Hop in my free female entrepreneur community here and share what type of market research you’re going to do FIRST!
Mistake #2 People Make with Residual Income: They Don’t Provide Free Value FIRST
Before someone will buy a passive or residual income product-whether it’s an ebook, mini course, full blown course, etc, they have to learn to trust you in this area/industry, and the best way to do that is to create a kickass FREE offer.
My quick tips (cuz this could be an entire course in itself), for creating a free offer:
- Outline what your paid offer would include. I suggest putting it into bullet points/numbers
- If you have 5 major points you want to cover, take 2 of those points, and make it into a freebie: a free PDF, a free ebook, free video series, free challenge, etc.
- Then entice them to continue to learn more and really up-level in (whatever area you’re talking about) by getting this (insert your paid offer).
- Make sure they’re getting massive value from even those #1 and #2 points. Don’t give them JUST fluff, but make them think…”DANG! This free shit is amazing…I cannot IMAGINE what her paid ebook/course/coaching is like!” I MUST CONTINUE TO WORK WITH HER!
- Give the WHY, WHAT, and a lil piece of the HOW–WHY they should want something and WHAT it is and a TEENY piece of the HOW. Again–dip their toes in enough so they get massive value but want to keep coming back for more. And as female boss babes…we know that it’s imperative to invest in ourselves to REALLY make massive change, so remember that when you want to give away EVERYTHING for free…you’re doing THEM a disservice by not having them invest at all and giving it ALL away for free
Here are some of my freebies for you to look at:
Mistake #3 People Make with Residual Income: They Expect The Money To Come FLOWIN In Right Away
You’ve done your market research. You’ve created an offer you KNOW your ideal client needs (and will pay for!), and are starting to create free value around that offer…so the passive/residual income should just start ROLLIN IN…RIGHT?!
Wrong I know this mistake was explained a bit in #2, but it warrants repeating, because both myself, and clients I’ve business coached have done this over and over again. We do something once, twice, maybe a couple times, for a few weeks, and we expect immediate results.
But business is a lot like working out (as my awesome mentor, Amanda Bucci often explains). You have to be consistent in your daily behaviors over time to really see long-term results. Just like working out and eating healthy for a few weeks won’t make you have DRASTIC results, neither will working your business. It takes MONTHS, sometimes a YEAR to see traction, and that’s 100% normal.
If you’re truly providing value that your audience has verbally said (in your market research) they want, collecting email addresses, nurturing your list, and really leading with love and integrity, you WILL start to make money, and passive income will become a huge part of that when you do this all the right way.
This is something I’ve been working on for almost a year, and am now starting to see a good chunk of my income come from passive income streams. But it took TIME, patience, market research, and LOTSA free value to get here.
If you’re ready to get some 1:1 help with your specific business to increase your impact and start implementing passive income streams into your life, I’m taking 3 more private business clients this month. Apply here and I’ll be in touch if I think we’d be a good fit to work together <3
Tell me about you! Do you want to make more residual and passive income? Which of these tips will you implement first? Tell me in my Free Female Entrepreneur Community here.
Megan Yelaney | Life + Business Coach