Lots of people say, there’s no such thing as passive income. It cannot be done. Usually, when people say, it cannot be done, what they really mean, is, they don’t know how. Because I’ve been earning passive income from my books, my podcasts, my properties, et cetera for many years, I’m going to give you 14 ways to create passive, recurring income. Then I’m going to give you 6 main elements, and things to remember to create passive recurring income.
the first thing, is, a book. You could write a paperback book, which could then be a Kindle book, which could then be an audiobook, which can then go on the iTunes Store, and many other book stores online.
It’s funny, because a book doesn’t just create income from one source. It creates income from many sources, because there are many different bookstore providers now. Obviously, Amazon is the main one. But on Amazon, there are 4 types of books. There is the paperback book, the eBook, the Kindle and the Audible. So, you only have to write one book, and then you can get passive income for the rest of your life, recurring income. I don’t really mind what your definition is. Some people don’t like the word passive, because they feel it gives the implication that you don’t have to do anything to start. I certainly don’t believe in that. I believe you have to set to forget. I believe you have to work hard enough not to have to work hard. And therefore, you have to create the asset with some kind of capital, that could be hard capital, i.e., money. That could be soft capital, i.e., time, resources. You could get a ghostwriter, a partner, a co-author. You could record your book on lives and on a Zoom H1 with various episodes for a podcast, for example, and then that could get transcribed into a book.
You could actually time leverage the asset. I’ve always handwritten my books. When I say handwritten, typed as opposed to transcribed. I’ve handwritten with a quill and some ink. But this latest book, Opportunity, I’ve been voice memoing my ghostwriter who’s been then typing up the notes, and having them edited and researched for more leverage, because I want to write what, 4 books a year, or certainly 4 books in the next year. So, I need to leverage up.
But book royalty income is significant. Now, when you write one book, and you launch it in one sort of format, mm, yeah, you’re not going to be a millionaire doing that necessarily, unless you’re lucky, or you’re a celebrity, or you’re writing an amazing book. But if you write it in one format, get it repurposed into all the other formats, and then you make sure it’s evergreen when you write it, and then you write another one in a year or 2, and another one in a year or 2. Before you know it, 2, 3, 5 years down the line, you’ve got multiple streams of income, just from the book. I earn hundreds of thousands of pounds from the recurring income of my books.
2. Music royalty
This is not my thing. I’ve never written a song. I can’t sing. I’ve got no musical dexterity. But many people have. TikTok is the thing at the moment when people are lip-syncing all their songs. And yeah, look, it’s a way. I’m not saying it’s one that I’m going to teach you, and you’re going to make money out of.
But if you think about Christmas, what’s probably the most famous Christmas song? All right, I’m just going to say the name of the band, and then you’d probably get it. And that is Slade. You’re singing it now in your head. I’m not going to sing it, because I’m not doing that to you. But it is Christmas. Slade wrote that song in the 70s. They earn more than £500,000 a year, I believe in passive recurring royalty income from that song. So, it is a thing. It might not be your thing, but it is a thing.
3. Fan funding
Patreon, Facebook Supporter. You could even create your own platform. I heard that Jordan Peterson is going to do that when he left Patreon. Fan funding, is, hey, I’m an artist. I’m creative. I’m a content provider. I’m an influencer. Please could you support me, and donate £3 a month, £5, or one-off £10 to help me curate and create my work. That’s become a big thing now.
I have nearly 2,500 members on my Facebook Supporter Programme. I don’t really use fan funding. I use more crowdfunding, because I don’t think people think that they need to donate money to me. They know that I’m kind of rich enough. That story would maybe not be the best. However, Patreon and Facebook Supporter Programme on your own platforms are a big thing for fan funding. And it’s a way for you to get paid in a recurring way for the content you’re already putting out there.
If you want to go technical on the definition of passive, you have to set to forget, and have to work hard enough to not have to work hard. But if you’re already doing it, if you’ve already creating content for your lives, if you’re already creating content for your podcast, then ask for fan funding, donations, et cetera, get a bit of a recurring billing on a monthly subscription, even if it’s just 3.49 a month, for example, then you’re getting paid for whatever you’re already doing. So, you could argue that, that’s become passive or at least recurring income.
4. Membership sites
You could use Kajabi. You could create your own online membership site. And you could put content on there; products, services, and you could get paid monthly for membership sites. This is obviously a big thing. This could scale globally, leveraging social media and the internet. You might already be doing the work. You might already be creating the content. You could put it on the membership site.
I have a membership site for my supporters. At the moment, I’m just putting content on there for them. But there’s enough on there, and it’s populated, I could go to the wider market, and I could probably charge £10 to £30 a month. Maybe, I have it at a higher level like, £50 a month for that too.
5. Affiliate earnings
Could you get paid for referring people? Could you be an ambassador for my companies, Progressive Property, Progressive Success? Could you refer people to us, and then get paid on the lifetime, that the client invest in the products and services, and training, and mentorships, and masterminds with us? So, you refer the person once, and hopefully, you get paid on a recurring basis. Obviously, you need to partner with someone that pays you on a recurring basis, and pays you lifetime, like we do at Progressive, and make sure that the systems and processes and courses and tracking is good.
6. Getting recommendations to your products and services
If you have a good ambassador programme yourself, an affiliate programme yourself, where people can refer clients to you, and maybe, they’re just opt-in, and then it’s tracked. Or, they’re referred to you on WhatsApp, and you call them up, and get them on one of your programmes. You could argue that, that is recurring or passive income. You can do it in the reverse way of being an affiliate. You could create an affiliate programme for your existing products or services, and get paid on a recurring basis for that.
7. Intellectual property
Maybe, you have some IP, a patent, some kind of design, a license, et cetera, that other people pay a license fee for. With Guinness Book of World Record, you have to pay a license when you get the World Record to use their logo. There are many ways that you could create intellectual property, or some kind of license-related income from an asset that you create.
Remember I said at the end of this livestream and Money Podcast, I’m going to cover the 6 key elements of creating recurring income. And one of them, is, creating an asset upon which, you could then get passive recurring income. Intellectual property is an asset. A license is an asset. Information is an asset. A membership site is an asset. A property is an asset. A song is an asset. I think you get the picture about assets.
8. Creating a franchise
You might already have a business, a product, or service. Create a franchise around it. Create a good franchise contract, a good franchise manual, some good franchise training, which it can all be created online, and in videos, and audios, and manuals. Then all of a sudden, you can sell that to different franchisees, you being the franchise. And then you can get passive income for all of the work that they do.
I have a franchise, Progressive Property Network. We have about 30 locations. It’s just a small franchise. It doesn’t make me a millionaire. It’s not the sole purpose of that. It’s also to generate leads and community members for my business. But if you’ve already got assets, you could create a franchise. If you start from scratch, I probably wouldn’t go to a franchise straightaway, because it is kind of a lot of work. But if you already have those assets, you could leverage that.
9. Ecommerce or online income
We have various different products online, courses you can buy, online courses, audio programmes, et cetera. You could have a shop on Amazon, or Shopify, and have people coming to your ecommerce sites, and buying your product online, which you white-label and outsource or the fulfilment of. That’s huge at the moment. Ecommerce is massive. And it’s probably only just started, and something that is definitely good for passive, recurring income.
10. Ad revenue
If you have lots of followers, if you have listeners, if you have subscribers, if you have traffic, then obviously, you can run ads. You can run ad role on YouTube. You can run ads on a podcast. I’m not the biggest fan of ads, but I’m giving you the 14 ways that I know to create passive income. You can choose which one you’re a fan of.
I have test ads on my podcast. I’m doing one a month for the next few months with Blinkist. That’s gone really well. They’re really happy. I’m really happy so far. I have nothing, but good feedback so far about that. But I’m doing it as a test. But now, I have many millions of downloads. I’m kind of missing a lot of opportunity for a lot of revenue by not running ads. I wouldn’t want to be one of these American podcasts that run 5 ads for their show. For me, it’s not quite the right thing, or the right fit. But maybe, that’s very British of me. I’ll let you decide. But you can pretty much run an ad, on virtually any platform now.
My social media guy, and friend, and also an influencer himself, Kieran. He’s got sponsored by a watch seller to do a video to promote their watch shop. He’s got a Gucci watch for it. He’s been sponsored by many supplement products, because he’s an ex-bodybuilding world champion. I am obviously serious about this. I’m trying to get sponsored by Costa Coffee. I’d love to be sponsored by Alexander McQueen. I’d love to be sponsored by Audemars Piguet, because it’s a brand I really believe in and love.
Obviously, if you have a big social media following, a big platform, lots of listeners on your podcast, lots of viewers of your YouTube video, lots of followers of your Page, good reach on LinkedIn, then you’re going to be much more attractive to people who want to run ads and people who want to run sponsorships.
12. Money lending
If you have money, you can lend the money as long as you get security and a charge. And you factor the risk element. You could lend money out, and get the recurring return. You could get it paid monthly, or rolled up at the end of the term.
Again, not really one for me. I prefer to lend my money to myself. I prefer to invest my own money in my own assets and manage to my own money. But it is something, you could do, if you’ve got a decent amount of money. Don’t do it without risk, warning though. And don’t do it without a proper lawyer and proper advice. It’s not something you just trip over and into.
Information is a great way to create recurring income. I mean, look at Facebook Supporter Programme, the Patreon Programme. People are on my membership sites. People are on seminars. People who run global livestreams. People who sell information in the form of audio, video. Netflix is selling information, and making billions out of it. So, information, online course, et cetera, is, a great way to create passive, recurring income. Because you create the asset once, and then you earn on it forever.
Think and Grow Rich was written in the 20s, I believe. It’s still in the top 10 selling books of all time. There are films that were recorded in the 70s and 80s, that are still being showed. They’re still generating revenue today. There are songs way back from the 60s, the 50s that are still generating revenue.
I like an asset to be evergreen, which is, probably, actually one of my 6 points. If an asset is evergreen, and it doesn’t go out of date for decades, then you can earn on year, on year, on year. And yeah, maybe you have to set to forget. But once it’s set, then you can forget, except for the recurring commissions, and the cheques, and the bank transfers that you get for your assets that you’ve created.
14. Have a sales team
You could hire people. People forget that hiring people, is, passive recurring income for you. Because, if someone else is doing the sales, someone else is doing the marketing, and then someone else is doing the admin, and the fulfilment, and the follow-up, and the customer service, then you have recurring passive income. You could be a Non-Exec Director. You could be an owner of a company, but not necessarily on the frontline.
By the way, I don’t want you to think I’m encouraging laziness. People sometimes, take my content out of context, because they take one little bit, and they don’t see the whole thing. Obviously, like I said, you do have to set to forget. You probably do still want to use your brain for creating visions, and ideas, and disruptions, and creating partnerships and collaborations. But the previous asset that you set can then forget. Your job can just be, create asset. Move on. Create asset. Move on. Create asset. Move on. Create asset. Move on.
There are so many people that are spending all their time jumping from job to job, career to career. They’re jumping from biz shop to biz shop. And each time they’re jumping from one to the other, they don’t get any recurring benefit from the ones that they leave. Whereas, if they set them all as assets, they could earn recurring residual passive income for many years after they did the work on the asset.
6 key factors of creating passive recurring income
- Create an asset that creates income. And all 14 of the ways to create passive income, which I’ll summarise in about 5 minutes time, are, assets. You may use capital or you may use sweat equity, hard capital, soft capital. But you create assets first that create the income. It’s nothing wrong you wish to exchange time for money. But that’s not an asset.
- Preserve your capital at all costs. You put capital into an asset, preserve it, ringfence it. Don’t erode it. A lot of people are eroding capital, spending money. It’s the asset that creates the recurring income. So, preserve the capital.
- Set to forget: you have to work hard enough not to have to work hard.
- Create assets that are evergreen. So, a property lasts for 100 years, or longer, that’s great. A book, if you write it, that doesn’t go out of date. So, don’t write about Brexit or interest rates. Write a book that might last 10 or 20 or 50 years like, Think and Grow Rich, or Rich Dad Poor Dad. It’s 20 years old now. Your information, can you make it evergreen? A song, can you make it relevant in many years’ time, et cetera?
- Some assets will need management and maintenance. Properties need management and maintenance. You might need to refurbish every 5 to 10 years. Tenants checking in, checking out. Inventory, et cetera. Books not so much maintenance. If you write them well, they might last 10-20 years.
- But my Property Investing Secrets is on edition 5 or 6, because that does tend to go out of date a bit quicker than some of my other books. I’ve rewriting or doing an update edition of a book, management and maintenance. If I’d have an online course, I might need to redo a module every year or 2, or update it with a new module every year or 2. So, that would be management, maintenance of the asset.
- And then reinvesting some profits of your recurring back into creating more assets so you have this mass compounding effect of multiple assets.
Latest posts by Rob Moore (see all)
- 11 do’s and don’ts when you’re feeling sorry for yourself - 22nd January 2020
- 2020 digital trends: 12 biggest trends for entrepreneurs - 16th January 2020
- 10 hard lessons I learnt in 2019 - 14th January 2020