Using a passive income model is basically positioning yourself as a toll keeper to get pain free money. Being successful really depends on your knowledge of what will work before you even try it. When most people think of the term passive income they equate it with the internet. In this blog I have exerted a lot of effort to give examples of this that are not digital. But since the internet is so hospitable to passive income, your online presence needs to be a part of your financial paradigm.
Learning what is passive income and how it relates to the internet can make you a financial dynamo: case in point, www.wayfair.com. The owners of this site had a very solid knowledge of how to attract internet traffic to sell everything that Walmart does. They first started selling book shelves because they were too big to find in local stores and no one was selling them online. So a website was made solely for book shelves and got tons of traffic because there was no competition. Another website they tried was for selling Persian carpets. Once again, it’s not an item that you find in your local store and it didn’t have a lot of competition. But it didn’t get a lot of sales because almost no one searches for “Persian carpets” online. Through experimentation the owners of Wayfair learned how passive income can be made just by examining web traffic analytics and they could almost always predict success when they followed the right principles.
How can you call this passive income?
Well, the websites would hang in cyberspace which required little upkeep and the company used a drop shipping model. They were basically just taking orders from the internet and putting them into wholesalers’ inboxes. Most of the time the wholesalers would ship directly to the clients themselves. I really love the Wayfair passive income model because they don’t do advertising. People just find the products through organic search online.
What’s nice is that if you really know what is passive income from a digital standpoint, you could discover one money making trick and set it up to be self emulating millions of times over. One trick is putting up lists of people that provide a specific service. Google loves these webpages so they get priority in the search listings. Using this model, you could rank really well and make passive income by placing advertisements on the site. Everyone knows of Angie’s List. Creating a similar site in a specific niche can be done if you hold fast to the model over a long period of time. Once I created an insurance website using keywords for cities in New York. I was very careful to naturally mix articles with lists of insurance agents. After 2 months of waiting, I found that 5 pages of my website ranked within the top 3 spots in Google. Almost every page ranked number one in Yahoo (but who cares about Yahoo nowadays?). I would be disingenuous if I said that it was a fun process because it wasn’t. But I was sold on the concept of making passive income and I had enough vision to get me through the mundane process of writing insurance articles.
Here’s a little secret of how I made $400 in one day. I was on GoDaddy and was looking at a bunch of word combinations that would make a good domain name for a window replacement website. I was impressed with one domain name that was available so I bought it and parked it but forgot to make a website for it. Ten months later someone contacted me out of the blue to buy it for his business. I set my price ($400 is the norm for the domain name industry), and 3 days later I had my passive income. I learned this trick when I, myself was waiting for a domain name to be available and someone snatched it before I was able to get it. He was a professional domain name trader that uses SnapNames. Anyway, I paid him $400 dollars for the name and then he went on his way again to skim the fat off another customer. Although I hated coughing up the money, I learned from the experience and could make some good passive income if I had a heart for it.
There’s a rule when trying to make passive income that you need to become acquainted with.
For every action there is an equal and opposite reaction.
The laws of physics apply even in finance. What I’m trying to say here is that if you want to make passive income using websites or apps, expect a fight. It’s very rare when you can create a digital product and have it quickly bubble to the top of the search rankings. But if you persevere with one digital product at a time you will eventually end up striking gold.
And those who choose to earn passive income on a part time basis have won a fight that others need to. For example, having just a few websites up that collect advertising revenue ensures that you will beat inflation. This leads me to an enigma that you’ve seen a lot on the internet. I personally hate when I come to a site which is just one page with a few advertising links in it. There are just a few people behind this cheesiness, and they make enough money to keep doing what they’re doing. Recently I got tired of maintaining a website and decided not to renew it. Right when it dropped off, one of these cheesesters got my domain name and set up his one page link site. It’s a vintage domain name which means Google likes it. However, in my case, I don’t believe he’ll be getting much passive income because I haven’t maintained it for such a long time.
I personally can’t see myself playing this game. Instead, I choose to focus on a few websites and build quality for the long term. That’s actually the best plan for success if you’d like to retire from your day job in the distant future. You can achieve this if you write on a daily basis. Know that you can’t just write about anything. You must write about one topic using the keywords that people use to find a site like yours. Over the course of a year and a half, writing 1000 words a day using search engine optimized word groups will make your website a media hub. But before we go any further, let’s talk about subject matter. One person is making a site about termites and another is making a website about termite extermination. Which one do you think will have the most success? Probably the one making the extermination site. His passive income will be more because more people will search for his site and advertisers dealing with pests will want their ads shown there. If the guy wants to get even more visitors, he can make sections talking about cockroaches and ants. Google will see the relationship and rank those sections well. But if you write about yesterday’s trip to the mall, you risk taking your whole site down a notch in search rankings.