There’s sooo much bad information out there on how to make money online and create passive income.
The truth is, people who make more than $10,000 per month are taking a very specific approach.
Most people get stuck when they think about becoming financially free because they try to figure out how to make millions of dollars.
That’s the wrong approach if you want to build wealth and become financially free.
It’s also not how the wealthy think.
I know it sounds counterintuitive but hear me out for a minute.
The right approach, the correct approach, the approach that will get RESULTS…. is to focus on creating passive income.
That’s how to make money online.
But to understand passive income you’ve got to understand active income and the cashflow quadrant.
Unfortunately they don’t teach this stuff in school.
Put another way….
Cashflow Quadrant (Robert Kiyosaki)
The first thing you have to understand is the 4 ways of making money.
Robert Kiyosaki lays this and explains it in depth in his book The Cashflow Quadrant and honestly, I think it’s his best book.
Rich Dad, Poor Dad gets a lot of attention, but The Cashflow Quadrant was a much more powerful book for me personally.
Here’s a quick overview.
There are four quadrants that everyone (even you) use to create or earn income from (see below).
E Quadrant (Employee)
The E Quadrant is where most of the population earns their income.
The income in this quadrant comes from from being an employee.
You work for a company, earn a wage, and get paid.
Maybe it’s an hourly wage, maybe it’s a salary, maybe it even includes commissions.
Regardless, the basic way you’re making money is by trading your time time for dollars.
The more you work, the more you get paid.
However, this will never make you rich so some people jump out of this quadrant and end up in the next quadrant.
S Quadrant (Self-Employed)
The S Quadrant is deceptive.
It’s where lots of people gravitate toward becasue they think they are owning a business but really, they just own another job.
In this quadrant, you are still trading time for dollars.
You may make more for your time, but you also risk making less because nothing is guaranteed.
A person can do quite well in this quadrant and can even use it to transition to the B Quadrant.
The thing to remember about this quadrant is that you will still never have time freedom, nor will yiou be able to scale as well as you could in the B Quadrant.
B Quadrant (Business Owner)
If you want wealth and financial freedom (as well as time freedom), then this is the quadrant you want to live in.
But to get here, you have to understand the difference between the B quadrant and the S Quadrant.
Many people live in the S Quadrant but they think they are in the B Quadrant.
So what’s the difference and why the confusion?
The B Quadrant is about creating systems.
It doesn’t matter about ownership of the said business.
You can own a roofing company for example, and still be earning your income from the S Quadrant.
Here’s the litmus test.
If you were to leave your business and go on an extended vacation for 6-12 months, when you returned would you be earning as much or more money than when you left?
Or would you stop making money almost as soon as you left?
That’s the difference between the S and B Quadrant.
In the B Quadrant, you’ve created systems to keep things moving.
Key people in specific positions.
Systems for hiring, firing, marketing, giving estimates, etc.
Income earned from the B Quadrant is meant to be as close to passive as possible.
I Quadrant (Investor)
The I Quadrant is the crème de la crème of income earning.
It is when you have made enough money to simply invest it and let your money do the work.
Maybe you’re paid dividends or royalties or rents, but this quadrant is reserved for investing your money so it can go to work for you.
Or as Mr. Wonderful from Shark tank explains it….
Active Income Vs. Passive Income
Once you understand the Cashflow Quadrant, the next step is to have a basic understanding of active and passive income.
They are the next layer.
Don’t worry, we’ll still get to how to make money online and how to make passive income but if you don’t have a foundation to build on…. then you’ll waste time and energy doing things that just don’t work.
What is Active Income?
Sow what is active income?
Active income is exactly how it sounds.
You have to actively do something to make this income.
Depending on the activity though, you can make this income in every quadrant.
For example, if you go to work and get paid, you make active income in the E Quadrant.
Let’s suppose though that you spend time time, money, and energy finding Real Estate to flip.
Then you would be making active income in the I Quadrant.
You have to know how this all works or you might waste a lot of time and energy.
I personally turned $1,000 into over $100,000 flipping land before I realized it would never give me the life I wanted.
Yes, it was great.
It was fun.
The money was great.
And I still occasionally invest in land.
But it took me years to figure out that even though I was making great money, it was never going to give me what I wanted.
What I wanted was great money AND to own my time.
I wanted to have time freedom and I wanted that as much or more than financial freedom.
Wealth, toys, cars, and fancy houses has never been a driver for me.
But early retirement…
Owning my time…
having freedom and money to travel…
That’s what I wanted.
The only way to get that is through Passive Income.
What is Passive Income?
Fast forward a few years into my land flipping journey.
I learned a few things and started putting some things together (I’m a slow learner).
So then… I started to pivot.
I started to focus on making money online and creating passive income.
I’m still very early on that journey but it’s getting exciting.
I now have multiple revenue streams.
Even though they’re still relatively small, they are beginning to grow.
The beauty of passive income and making money online is that not only is it fun, but your efforts can grow exponentially.
So with that foundation, let’s dive into all the different ways to make money online and create passive income.
*By the way, if you’ve found the Cashflow Quadrant and Active vs. Passive income information helpful so far, please consider sharing this article on social media so others can benefit.
Make Money Online (Active Income)
Passive income is great for generating large sums of cash and automated cash.
However, it’s not the fastest way to get paid.
If you need money now, active income is the best approach to take because typically you get paid faster.
That’s pretty much because with active income, you’re trading time or skills for money and it’s a pretty straight forward trade since there isn’t any scaling involved.
Poshmark or Craigslist Marketplace
So what do you do if you just need to make a quick $500-$1,000?
If you’re just needing some quick cash, then do a quick inventory in your house of things you don’t use.
If you have name brand clothes, shoes, watches, purses, etc. then you can probably sell them on Poshmark and get a decent price for them.
Beware though, you’ll have to pay for shipping and Poshmark is going to take a hefty cut from your sales.
As of this writing, it is $2.95 for all items under $15.00 and 20% for items over $15.
So if you sell that fancy purse for $100, Poshmark is going to take $20, plus you’ll have to pay for shipping… OUCH!
One way around this is to sell the item on Facebook Marketplace.
I’ve had lots of success selling on Facebook Market because almost everybody has a Facebook account and there are no fees if you don’t ship the item.
I like to find a place near my house that I can meet people at.
That way, I don’t have people coming to my house all the time.
If the item is large though, you may need to have them meet you at your home.
Just be careful. Make sure the person you’re dealing with seems to be a real person with a real account.
If they are, you should be okay but it’s on you to take precautions and keep yourself and your family safe.
Freelancing with Upwork or Fiverr
If you have a skill like writing, video creation, video editing, website design, marketing, etc. then you can sign up to be a freelancer with Upwork or Fiverr.
People who are looking for freelancers use these sights to work with a freelancer and get the job done.
I’ve used both platforms, not as a freelancer but as somebody posting a job.
If you want to go this route, my recommendation would be to do use Upwork.
There seems to be better quality freelancers on Upwork and they command better prices.
When people are hiring on Fiverr, they tend to be looking for cheap work because the site started as a way to get jobs done for $5.
I also like using the Upwork platform better than Fiverr.
Teach with TakeLessons.com
If you speak another language, play an instrument, tutor, know computers, or can teach any other skill people would pay to learn, then TakeLessons.com may be the right site for you.
The website matches tutors with potential clients.
You can teach 1-on-1 or group lessons.
Like other sites, the key will be to get a few customers and get good ratings from them.
Then you’ll want to keep high ratings throughout in order to stay competitive.
Do Pet Care with Rover.com
Let’s suppose you don’t have a skill to teach but you have some time, a vehicle, and a love of animals.
Maybe pet care is a side hustle that would work for you.
Sometimes people need to leave their pets and rather than do it with somebody who may not be a dog lover, they can find a highly rated person to keep their pet (and it could be you).
You could do house sitting, dog boarding, simple pet care, or even dog walking.
This is a great site to get your pet care side hustle going.
Again, these options are active income options.
It means you’ll be trading time for dollars, but at least you’ll have guaranteed pay and some flexibility.
Next up… How to make Passive Income so you can STOP trading time for dollars.
How to Make Money Online (Passive Income Strategies)
The ideas below won’t pay as well right up front as active income.
If your goal is to only make $300-$500 a month for a short period of time, then you might want to stick with the active income jobs.
However, if you want to put your time in to something that can grow exponentially and offer some residual income, then the ideas below are the route you want to take.
*Passive income and residual income is how you build wealth and get your time back.
Shutterstock & Pixabay (Upload Stock Photography)
If you’re good at photography and video you may want to consider providing stock photography for purchase.
There are a ton of sites out there and you can earn income from people downloading your pictures/videos to use.
I’m sure there are some rules you’ll have to follow so you’ll want to learn these.
For example, I imagine you can’t use people’s faces commercially without permission but that’s just a guess.
When people need pictures or images for videos and websites and other things, they often go to a stock photography company like Shutterstock or Pixabay to download pictures they can use.
As a photographer, you can upload pictures and make money doing this.
The more you have uploaded (and the better the quality), the more you can make.
Join the Creator Economy
This is absolutely my favorite and most recommended way people start making money online.
So what is the creator economy?
Think of all the companies in the world that make money off of a platform where other people produce and create the content (Facebook, YouTube, Snapchat, LinkedIn, Twitter, TikTok, etc.)
The list is vast.
Well, people have figured out that if you create enough of the right content (content these companies want), then you can get paid for that content.
Sometimes the companies pay you for creating it like YouTube does and TikTok is attempting to figure out.
But often, creators in the creator economy direct their viewers or readers to products and services that they are promoting and often this is where they make their money.
What makes this so powerful is how scalable it is.
If you grow your audience and viewership on one of these platforms and do it correctly, you can potentially make massive income just from creating content.
And most of this income is residual or mostly residual, which means if you don’t make content one month, you’ll still make money that month.
In fact, depending on your growth from the content you have, you could even make more.
And that is a beautiful thing!
So what are the greatest opportunities for people who want to join the creator economy and start learning how to make money online?
Here are the best options that are currently working.
Make Money with YouTube (Adsense, Sponsorships, Affiliate Income)
I personally believe every content creator should start with YouTube.
The world is moving toward video rather than the written word.
That’s why so many of my blog posts have videos embedded in them as well.
It’s because many people would rather watch and/or listen to content instead of read it.
YouTube is great for multiple reasons.
First, growth is organic and can be exponential.
Unlike social media content that usually dies within the first 24 hours (or less), YouTube content can grow over time.
This is because YouTube isn’t just a place to publish content.
It’s also the 2nd largest search engine in the world!
Here’s a video that better explains why creators in the creator economy should be focusing on YouTube.
Great video, right?
If you didn’t watch it, I highly suggest it… Especially if you’re wanting to generate leads and make money online by joining this wonderful thing called… the creator economy.
Anyway, moving along…. with YouTube there are 3 main ways to make money online.
1. Make Money with AdSense Ad Revenue
AdSense is a division of YouTube.
When a company wants to run ads on YouTube videos they set up and AdSense account to be able to do this.
As an incentive to the creators (i.e. those working in the creator economy), YouTube splits that revenue with it’s creators.
At the time of this writing, YouTube keeps 45% of that revenue and the creator gets 55%.
If your goal as a YouTube creator is to make money of off AdSense then you’ve got to understand how AdSense works so you can make the most money.
How does YouTube AdSense Work?
AdSense is based on CPM (Cost per Mil – the amount advertisers pay per 1,000 views).
55% of that CPM is called the RPM (Revenue per Mil – the amount content creators earn per 1,000 views)
The key thing to understand before starting your YouTube channel is that different types of content and different audiences command different rates and some rates pay better than others.
For example, a vlog about cute puppies or video games won’t generate as much revenue as a video about finance or real estate.
This is because AdSense is based on advertisers bidding for the ad slots.
So let’s suppose a company is selling pet food.
They will want to advertise on videos that cater to audiences that have pets or like pets.
They would also be competing with other companies in the pet industry to advertise on those videos.
The CPM rate is only going to go so high… and since the RPM (how much a creator gets) is based on the CPM, it’s not going to bring in as much money.
Compare the pet industry to more lucrative industries such as real estate, finance, or insurance.
Generally, those industries have larger ad budgets so the CPM rate (and also the RPM) rate tends to climb higher.
This is because they are willing to pay more to be in front of the right audience.
When you start getting lots of views on your videos, these different ad rates can add up significantly.
In the chart below I put some examples to help illustrate it.
The four videos shown have dramatically different CPM and RPM rates, so the amount that the content creator would earn from YouTube AdSense would be dramatically different.
If your goal is to make money, you’re better off working on videos targeting niches that pay more.
Otherwise you’re leaving ALOT of money on the table.
What else affects YouTube AdSense Revenue (CPM Rates and RPM Rates)?
On top of the video topic, there are 2 other things that can affect the CPM and RPM rates as well.
Those 2 things are:
- Audience location: Wealthy countries such as Norway or the United States will pay much better than less wealthy countries like Zimbabwe or India
- Audience Age: Older audiences will typically pay more than younger audiences because it is assumed they have more dispensable income.
When you stack these things on top of a low performing niche, it makes the CPM and RPM even lower.
For example, the video game niche or entertainment vlogging niche generates low CPM and RPM rates already but my theory is that part of that is also because it’s mostly younger people watching those videos.
Younger audiences tend to bring down the AdSense rates as well.
But by nature, a niche like investing will attract older audiences who are starting to think about retirement and the future.
But AdSense is not the only game in town when it comes to making money and passive income online.
2. Get Sponsorships on YouTube
Once you start building an audience, you can start getting into the game of sponsored videos.
A sponsored video is when a company looks at your channel, likes what you’re doing, likes the type of audience you are attracting, and wants to pay you to mention them in a video.
It’s a bit more complicated than that.
You have to agree on terms and conditions, price, etc. and check the YouTube box that it’s sponsored content.
But for the most part, that’s how it works.
It can be really lucrative for you and for the company if you audience resonates with them and if the product is a good fit.
3. Make Money with Affiliate Marketing and Stacked Affiliate Marketing
Affiliate marketing is when you drop a link in your content and when people click on it and purchase something, you get paid a commission.
These links can be embedded in blog posts and put in the description of YouTube or other social media.
The great thing about affiliate marketing is that it can give you recurring revenue and passive income.
As your content grows in views and popularity, more people will click on the links and make purchases.
Stacked Affiliate Marketing is what many home business models follow.
It’s got many names but this model basically allows you to get paid commission for customer sales as well as having the ability to get paid for building a sales team.
This is my favorite model to make money with because it has the potential of exponential growth.
Combine that potential with the exponential growth of being a content creator and you have a recipe for making a lot of money online.
One complaint people sometimes have is that revenue source usually requires a monthly fee to be qualified to get paid.
However, I see that as par for the course.
If you see yourself as a business owner (and all people involved in the creator economy and online sales should), then a $100-$200 a month overhead cost is still thousands of dollars less than a brick and mortor business.
Plus, these companies often have consumable products which allows you to earn commission month over month from the same customer.
On top of that, they typically pay much more (20-60%) per sale than other programs such as Amazon (3-5%).
Make Money on Amazon (KDP, MTurk, Affiliate Sales)
Amazon Affiliate Sales
Speaking of Amazon and affiliate marketing, everyone online should consider becoming an affiliate partner with them.
Their commission are low, usually 3-5% on sales.
However, at this point people are pre-programmed to buy from them and most people already have accounts set up.
So if they click on a link to a product they like and it takes them to Amazon to check out and buy it, they will have very little resistance to making the purchase.
Amazon KDP is the self-publishing platform Amazon offers creators.
When your audience gets big enough, you could self publish books, calendars, journals, etc.
If you’re good at design, you may not even need to have an audience.
You may be able to just get traction on Amazon.
For example, let’s say you come up with a cool journal with quotes or scriptures on each page.
You could use the same journal pages but upload multiple designs and if one of them gets picked up by the Amazon algorithm and promoted you may be able to get commissions that way.
The way it works (or at least used to work) is that Amazon prints the product on demand as people order it.
So the only cost you have is the cost of the design and/or your time to set it up and promote it.
Amazon MTurk (M stands for mechanical) is Amazon’s answer to sites like Upwork.
Some tasks require a human.
MTurk is the solution for people who want to outsource specific tasks.
You could get set up on this and start earning as soon as you start getting jobs.
Shopify Dropshipping (Using Oberlo)
I have never used Shopify but I’ve done enough YouTubing and research to know that there is definitely money to be made with Shopify.
Shopify is a commerce platform that allows you to set up and online ecommerce store and start selling products.
You can do affiliate sales, drop-shipping sales, in-person sales, ticket sales, event sales, online sales… the list could go on forever.
It’s really meant to be a kind of all in one solution.
Like stacked affiliate marketing, there is a monthly fee associated with the service because it’s a SaaS company (Software as a service).
But again, if you see yourself as a business owner, you’re going to have to understand that some things aren’t free.
The entrepreneurial world is not a socialist society.
Combine Active and Passive Income
Stacked Affiliate Marketing in Health and Wellness
I mentioned it above but I want to mention it one more time.
Of all the topics I’ve covered, I think combining active income and passive income is the most powerful overall strategy.
The best way to get started is to become part of the creator economy and start pumping out great content.
Preferably on YouTube so you can eventually earn AdSense ad revenue.
Then use a stacked affiliate marketing company to link to consumable health and wellness products.
If you do those things, you will be giving yourself the opportunity to create multiple revenue streams that can all grow exponentially.
- YouTube AdSense Revenue
- Affiliate Marketing Commissions
- Stacked Affiliate Marketing Commissions
- Recurring Revenue from re-orders.
If you want to see exactly how that works, I created a more specific overview here.
Powerful Network Marketing Quotes to Encourage You
15+ Benefits of Stacked Affiliate Marketing Vs. Traditional Business
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Jason and Daniele
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