What is passive income?
Wikipedia defines it as: “Income received on a regular basis, with little effort required to maintain it.”
If you own a traditional business or have been doing network marketing for any length of time, I want to share with you the importance of creating passive/residual income.
What most new network marketers don’t realize is, why they need to generate additional income outside their primary business. By the time you are finished reading this article it will be clear, why and how you can earn a passive income, along with the benefits.
I’ve spent a fair amount of time here on my blog sharing different internet marketing tips with the occasional article about affiliate marketing (which we will talk about in a moment), but I would have to say the majority of what I share here is how to generate leads for your home based business.
Leads are the lifeline to your business. Without fresh leads, you’ve got no new prospects to share your opportunity with, therefore, no additional income stream.
Almost every successful network marketer shares one common thread!
They have learned the secret of how and why they need to earn Passive Income while building their primary business.
Especially if you’re new to the mlm scene, regardless of what your primary business may be, the one thing you need is an income stream that continues to flow, month after month to help fund your primary business.
What do I mean by that? What’s the one thing every business needs?
Traffic or Customers right? It doesn’t matter if it’s a brick-and-mortar business, an online business, an MLM etc. They all need to be consistently reaching new people every day, 365 days a year in order to stay in business.
That requires one thing, advertising and marketing dollars!
We all know how expensive that can be. Take a look at the Super Bowl commercials! Over a million dollars for a 30 second spot, that’s outrageous isn’t it? I know, this may be an extreme example but you get the idea, advertising is expensive!
It takes money to make money and here are some passive income ideas to help take your MLM business to the next level. If you can learn how to earn additional income without interfering with what you are currently doing, then you can turn around and use that money to market your primary business.
Remember, when you are first starting out with a network marketing business, or any business, it could be months before you start to make any significant money.
If you can learn to generate some additional income, even a few hundred dollars per month, this money can be dedicated strictly towards your advertising and marketing budget. This will put you way ahead of the game, and your competition.
Most articles I read while researching how to make passive income all talk about the same thing.
Dividends, Interest, and Rental Property are the top ways to create income month over month. That’s all well and fine, and while there is truth to those methods, I want to talk about how to earn residual income online, with a lot less effort or monetary investment.
Here are 4 ways to create residual income outside your network marketing business.
This is very time consuming, requires a lot of work to set up, but eventually will run on semi-auto-pilot to produce additional income. If your passion is writing, as long as you are prepared to put in 1 to 2 years before seeing any substantial income, blogging is a great way to go, but it’s by far the slowest method.
Google’s Adsense program is another method for generating income by using a blog. In a nutshell, you create an article for you blog and then Google’s Adsense people go out and find ads relevant to your article and display those ads next to your article. If you optimize your articles well, Adsense can generate some decent income.
CPM Advertising which stands for Cost Per Impression is another way you can use a blog to generate income. Adsense pays on a cost per click (CPC) basis where companies like, Adify, AdClickMedia, ContextWeb and many others pay on impressions.
Direct Ad Sales is another way to generate income using your blog. Basically you sell ad space on your site directly to advertisers. In order to make any money with this you really need to have massive amounts of traffic coming to your site everyday. You can learn how to drive traffic to your site from one of my latest articles by clicking here and here!
2. Create Your Own Product or Membership Site
This can be very lucrative but again, it takes a lot of time and isn’t exactly what I consider passive income . Depending upon your product and marketing efforts, creating a Product such as an eBook or a video tutorial series, a Funded Proposal is a great way to go. Its your business and something you own, no one can take it away from you, and you don’t have to worry about them closing the doors their on you either.
The top network and internet marketers all have created their own Products and many have put together Membership Sites to teach people how to market online. You can put together a site with several courses covering everything from how to set up a blog, article marketing, generating leads, PPC advertising, you name it. There is so much to offer and millions of people online looking to learn how to do it.
3. Create an App
I realize that not everyone can just up and make an app for the iPhone or Android platform, but it’s not impossible to learn how. If you’ve got the vision and idea for a killer app, there are always ways to farm out the work. I know plenty of sharp college students, (high school ones for that matter) who would be willing to work out a deal and produce an app for you. Talk about a passive way to create income, once the work is done and approved by either mobile platform, this could be a significant income producing venture which runs round the clock, 24/7.
4. Affiliate Marketing
This is what I believe to be the most feasible way to generate additional income outside your primary business that I’ve been able to find. It’s been a great way for me to fund my marketing this past year and it continues to grow and produce more income each month.
What is Affiliate Marketing?
Basically you get paid to drive traffic and advertise for other companies. In it’s basic form affiliate marketing existed long before the internet was born or the term affiliate marketing was created. In the old days, Referral Marketing was the common term.
Referral Marketing commonly refers on trust and personal relationships to drive sales to an outside company. Many of us do this type of advertising everyday when we recommend our favorite restaurant, yoga studio, movie etc. More often than not, referral marketing isn’t driven by any financial motivation, not to say it doesn’t or can’t happen, it’s just less likely too.
In the advent of the internet, affiliate marketing was born and is purely financially motivated. There are people who make 6 and 7 figure yearly incomes, purely doing affiliate marketing for several different companies. Creating a 6 figure income with affiliate marketing is a full time job and hardly a way to create passive income. ProBlogger has a an article you may enjoy.
Like I explained earlier, affiliate marketing is about driving traffic to a particular business, if the people you recommend make a purchase or become a loyal customer, you will be paid a commission. A residual income every month is possible just for bringing the two together. There are some affiliate programs that pay only one level deep, while others will pay 2 or 3 generations down.
Finding an affiliate program you can stand behind and feel good about recommending is the most difficult part of the equation. There are thousands of programs out there to choose from so how do you decide?
My #1 requirement when recommending a program is to bring value into peoples lives. I want to find a solution that will help solve their problems, whatever they may be.
As you can see here on my site, I offer several options of different companies and products I personally use and stand behind 100%.
In closing, any of the methods discussed above are ways to create passive income that you can use to fund your advertising costs. Some require less effort than others. It just makes sense to have options so your not constantly coming out of pocket every month to advertise.
If you have other ways to create passive income, be sure and leave me a comment below. And don’t forget to share this article with your Facebook, Google+ & Twitter buddies by clicking the appropriate button below.
One of my favorite ways to generate passive income is through a very simple referral program which requires no upfront cost. Team building/recruiting is not required, it’s optional. See how your can earn a a residual income for each referral. Click Here To Learn More!