Passive income has literally changed my life.
- When I was starting my first business, I experimented with consulting, then coaching, then training.
- I looked to monetize my blog through advertising and affiliate promotions.
- Then I landed on a blend of digital products that established my authority, brought in new customers, and also increased my income into six figures.
Passive income is any type of income that comes in whether you work or not. Offering your time in exchange for a high hourly rate may be lucrative but it’s not passive. In my first business, selling digital products through an automated online marketing system consistently generates passive income, month in and month out.
As a result, I work less, earn more income, and have more freedom to do the work I want. I also help more people, which fuels my creative energy.
Let’s look at each of these benefits in turn.
Passive Income Reason #1 – I work less.
When my first daughter was born nearly 4 years ago, I realized that I had to let go of 50-60 hour work weeks. Even before her birth, I explored more profitable and flexible business models. But it was after returning to work that I finally figured out what working less really meant, and I doubled down on my virtual efforts.
Soon digital products, such as virtual self-study courses, toolkit downloads, and ebooks, became the mainstay of my revenue stream.
Now, I work 25-30 hours per week (with no commute) and take at least 6 weeks of vacation each year. But since I like working, the more important part of this equation is that I get to be a bigger part of my daughters’ lives, have the flexibility to go on school field trips, and even take a little bit of time for myself with the occasional hike.
Passive Income Reason #2 – I earn more income.
Before I started creating and selling digital products, I was working in consulting. I had two ways to increase my income: increase my rate or work more hours. Rates have ceilings and more hours wasn’t an option.
Now, I make a time investment upfront in creating a product and it sells for a long, long time, even after I’ve stopped actively working on it. (My most profitable product has not been updated in nearly 3 years and shows no sign of becoming irrelevant.)
Two years ago, I realized that after four years of effort and many mis-steps, I was finally making more in my business than I had before I bailed on my director-level corporate role.
This was a watershed moment. Just the fact that I created something on my own that earned this level of income was incredibly empowering.
But then the revenue kept growing at a much faster pace than any set of raises or bonuses that would have come my way in the corporate world. I wasn’t working more, but I was earning more.
For someone who came from a corporate 8-6, work-your-butt-off kind of culture, this was not necessarily the most comfortable feeling in the world. In fact, one of my self-directives for this year was to embrace this whole making-money aspect of the business equation. You may not have that hesitation, but it’s very real for me.
Despite my hang-ups, my relationship with money has shifted. The worries about money I’ve carried with me my whole life are finally starting to evaporate as I trust the business I’ve created.
Passive Income Reason #3 – I am free to do work of my choosing.
Because of the steady income stream, I now get to choose what to work on and when to work on it. If I have a bad day of work, there’s no one to blame. I can (and must) make a different choice tomorrow.
I have the freedom and the responsibility to find and choose fulfilling work.
I experiment a lot. For example, at the end of last year I sold a time management live webinar. It didn’t sell well and I ended up disliking the delivery process. But what I learned from the process has helped me make even deeper changes in my work.
More recently I’ve decided to cut back on the number of virtual, instructor-led courses I lead and instead focus on new product development and more self-study options. I’ve also been taking on new mentoring clients. Even though this work isn’t as profitable as some of the other work I do, it’s immensely fulfilling.
This freedom is also why I can experiment with new areas, like delivering business-building workshops.
Passive Income Reason #4 – I help more people.
Sometimes the abundance in my life can lead me on a little bit of a guilt trip. Yes, it’s wonderful, but it also feels a little wrong. Why am I working less and receiving more? Owning my success, by writing this blog post, is a huge leap for me.
Yet, nearly every week I receive an email about how I helped someone succeed at their job, or find a new job. Receiving stories about how my work helps real people achieve their goals, find more happiness, or experience the validation of a job well-done gives more meaning to my work.
And digital products enable you to help more people than you could otherwise. A digital product is always available when they need it. It never goes on vacation, gets burnt out, or has run out of hours in the day. What’s more, because you can price a digital product affordably (yet still make a nice profit) many more people are able to afford what you are offering.
Digital products really have changed my life.
What I’ve written about here hits the highlights. There’s virtually no area of my life untouched in the transformation that’s happened over the course of the last few years. And I’ll forever be grateful for the abundance I’ve experienced.
If you’ve been thinking of creating a digital product or would like to explore what creating one takes, check out the Digital Product Workshop. It’s self-paced and available for immediate online download.