Active Income vs. Passive Income

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“Start a blog and make passive income.” You’ve probably seen that message a lot, right?

While I agree that blogging can be a great way to make money online (it’s been my main source of income for more than 10 years), in general, I don’t consider blogging to be passive income. The main reasons are:

  1. There will be a lot of upfront work before you’ll start to make money from a blog (usually).
  2. Even successful bloggers that make good money usually spend a significant amount of time running their blog.
  3. Realistically, most people who start a blog will not make passive income.

While it’s definitely possible to make money passively from a website or blog, the truth is, there is a lot of upfront work that’s needed before any income will start flowing passively – and that’s often left out.

Most successful bloggers made next to nothing from their blog for the first several months, and sometimes even a year or more. When the blog does start making money, there is usually nothing passive about it.

The thing about blogging is that it gets a lot easier as time goes on. During those first few months, you’re probably working hard to get any visitors to your blog. No one knows the blog exists, and people aren’t going to come to check it out unless it gets in front of them somehow.

But some of those visitors that do wind up on your blog will like what they see and come back again sometime in the future. Maybe they even subscribe to your email list.

With some consistent effort, your audience grows, and making money becomes possible.

But is it passive income?

Active income requires work, effort, and time. Passive income is something that flows in with little-to-no effort on your part. Most methods of making passive income (aside from investing and leveraging your money or assets) require work on the front end, and then you benefit from the passive income later.

While blogging can generate income passively, it can also be a very active way to make money. Running a popular blog is a lot of work. Of course, content creation is a big part of that, but you’ll also need to put time into networking, social media, possibly some marketing and advertising, and all of the business-related aspects like bookkeeping.

However, there are definitely some passive elements or aspects, and with the right approach, it’s possible to turn that active income into passive income.

Some of the passive aspects of blogging include:

  1. The potential to make significantly more money while reducing your working hours.
  2. Making money as a result of the content that you wrote months or years ago.
  3. Having an income that is not tied to the number of hours that you work.
  4. Being able to outsource most of the work to other people.

In this article, we’ll look at those details, as well as how you can make the shift from active to passive income.

→ Related reading: How to Start a Blog

The Formula for Passive Income

We’ll look at the details throughout this article, but making passive income online really boils down to a simple equation.

A source of ongoing traffic + a low-maintenance monetization method = passive income

There are a few different ways to do it, so let’s get into the details.

Ways to Make Money Passively with a Blog or Website

Before we get into the different ways, I want to point out that none of these options are 100% passive. You will need to put in some effort, but with the right approach, it can be a smaller effort that generates a much more significant payout.

1. Niche Website/Blog

Niche websites are usually set up as blogs, but there are some key differences in many aspects. Niche websites typically:

  • Publish content on tightly-focused topics.
  • Create content to target specific keywords.
  • Generate the majority of their traffic from Google searches.
  • Make money from affiliate programs, and sometimes display ads.

Because most niche websites get the majority of their traffic from Google searches, there is usually less emphasis on building a relationship or connection between the blogger and the reader. The goal of a niche website is usually to get the visitor to click through an affiliate link and buy a product, or click on an ad.

One of the nice things about running a niche site or blog is that you don’t have pressure to constantly produce new content. Since most of the traffic is coming from Google search, there are probably very few “loyal readers” who are sitting at the edge of their seat waiting for new content to be published. You could publish nothing new for a month and it’s likely that no one would notice or care.

That’s much different from the approach that most bloggers take where new content is published on a regular basis.

Not only does a niche website allow you the option to publish content sporadically and take breaks, but it also makes it possible to earn income during those times when you’re doing nothing, or next to nothing.

If you’re interested in niche websites, check out my article Complete Guide to Building a Profitable Niche Website.

2. Advertising Revenue + Traffic

Advertising isn’t my favorite way to make money from a blog, but it is one option. When I first started blogging more than 10 years ago, this was my main source of income. In fact, for a few years, ads accounted for about 90% of my blogging income.

In general, I prefer other monetization methods like selling your own products or promoting other people’s products and services as an affiliate, but there are definitely some benefits to making money with ads. The biggest benefit is that it takes no extra effort on your part. All you need to do is focus on getting traffic to your website or blog, and money can be made from the ads.

If you have a blog or website that generates traffic without a lot of effort (more on that later in this article), putting ads on the site can be a way to make passive income. Most likely, you’ll need to continue to put in some effort to keep the traffic coming and growing, but it’s possible that you could coast for a while and continue to make money without the effort.

The most lucrative way to make money from ads is to join a network that will handle everything for you. In recent years, several good ad networks have become viable options for bloggers. The best networks require you to apply and get approval before you can be a part of their network, and in some cases that involves reaching a certain level of traffic. Here are a few popular options:

  • Monumetric requires at least 10,000 pageviews per month for approval
  • Mediavine requires at least 25,000 pageviews per month for approval
  • AdThive requires at least 100,000 pageviews per month for approval

Blogs and websites with less traffic can use Google AdSense, but the networks listed above will almost always generate more money than AdSense.

Using any of the 3 networks above, you could earn $10-$30+ per 1,000 pageviews. If your blog gets 1,000 pageviews per day (30,000 per month) and you’re earning $15 RPM, you would make $450 from ads that month. (RPM stand for “revenue per mille”, which is thousand in latin).

Of course, if your traffic increases or if your RPM increases, you would make more money. One of the biggest factors that will impact the RPM is the clickthrough rate (CTR) on the ads. More clicks equal more money.

3. Affiliate Revenue + Traffic

This approach is similar to putting ads on your site, but with a twist. Instead of making money from ads, you can make money when visitors click on an affiliate link on your website and then make a purchase.

If you’re not familiar with affiliate programs, it’s a way for you to make money by referring visitors to other websites. For example, you could join Amazon’s affiliate program, which they call Amazon Associates. Once you’re in the program, you can generate a special affiliate link that will track visitors sent from your website. If you have a hiking website, you could generate an affiliate link for a hiking backpack that is sold on Amazon, put that link in the content on your website or blog, and you’ll earn a small commission whenever a visitor clicks through your link and makes a purchase at Amazon (they don’t have to purchase the exact product that you recommend in order for you to earn a commission).

If you have content on your website or blog that includes affiliate links, and you have a steady flow of traffic, you have the potential for passive income.

It’s also important to note that simply putting affiliate links in your content will not necessarily lead to money. The traffic that you send through those affiliate links will need to convert into sales or leads in order for it to generate revenue. The products and services that you’re recommending need to be highly relevant to your content and the target audience, and you’re also dependent on the other site to be able to convert the visitors into sales.

4. Selling Low Maintenance Digital Products

Over the past 7 or 8 years, the best monetization method I’ve used with my own blogs has been selling my own digital products. There are a lot of different types of digital products that you can sell, and they’re not all equal in terms of the amount of ongoing work. If your goal is passive income, you need to consider the amount and type of ongoing work that will be required by the products that you create.

Probably the two biggest factors that will determine the amount ongoing work required by a digital product are: 1) how often the product needs to be updated, and 2) how much customer service is required.

For example, the following types of digital products can be high-maintenance:

  • WordPress themes and plugins
  • Software and apps
  • Online courses

All of these methods can be great ways to make money, but they are not the lowest maintenance options. WordPress is updated constantly, so any plugins or themes will need to be updated frequently. Customers also need a lot of support for these products. Other types of software also require a need for customer service.

Online courses are extremely popular for making money online, and with good reason. You can make a lot of money with a successful course, but there will be some maintenance. Customers may have login issues or problems accessing the content. You’ll also get questions regarding the content in the course. Some course creators also have Facebook groups for people who buy their course, and those groups need to be monitored, and someone needs to be actively responding to questions.

Other types of digital products are likely to be lower maintenance. A few examples include:

  • Ebooks
  • Digital photos and graphics
  • Audio files

These types of products typically require less customer service, and they don’t need to be updated as often.

To be clear, any type of digital product that you sell is going to require some level of customer service. Selling low-maintenance products you can still get emails from customers who have payment issues, trouble downloading a file, or simply don’t know how to use the product. But this can be pretty minimal with the right products.

Most of my experience with digital products is with low-maintenance products, and very little customer service was required. I handled all of the customer service myself and it was rare that I would get more than two customer service emails per day, even with a business that generated a full-time income for me from selling those products.

Of course, having the low-maintenance product is only part of the equation. You’ll also need a steady flow of traffic in order for sales to keep coming in.

One of the things I like about digital products is that you can create something that will be highly relevant to the content that attracts traffic to your site. If you’re a mom blogger and you have some posts on Instant Pot meals that generate a constant flow of traffic from Pinterest or Google, you could create an ebook of Instant Pot recipes and promote it heavily on those pages. The combination of the ebook and that consistent flow of traffic would give you a great chance for passive income.

5. Outsourcing

Just about any monetization method can be converted into passive income if you are hiring others to do the work for you. For bloggers, this often includes outsourcing:

  • Writing of the blog content
  • Social media management
  • Customer service and administrative tasks

Those high-maintenance digital products that I mentioned above, you can hire people to handle a lot of that maintenance and make it much easier on yourself. Many course creators hire virtual assistants to handle the customer service.

Outsourcing is a great way to reduce the amount of time you need to spend on your website or blog, or to allow you to focus your time on the most important tasks (or the things that you do best).

Keep in mind, no one else is ever going to care about your site as much as you do, so you’ll probably never be able to completely hand it over to other people without the need to at least check in and make sure things are running smoothly.

→ Related reading: 15 Amazing Resources for Money-Making Bloggers

Generating Traffic for Passive Income

Regardless of how you monetize your website or blog, you’ll need some traffic in order to generate passive income from it. There are a few different types of traffic that can work well for continually sending visitors day-after-day, without too much effort on your part to keep it flowing.

Search

Google search traffic can be extremely valuable for bloggers and website owners. If your content is at or near the top of the rankings for keywords and phrases that people are searching for, you’ll get traffic day-after-day. Not only will you get traffic, but it will be people who are actively looking for the exact content that you provide. In general, it’s high-quality, highly-targeted traffic.

Social media can be a great source of traffic for blogs, but it’s usually short-lived, and you’ll need to keep putting more time in if you want the traffic to continue.

Search traffic is different. You won’t need to keep working every day for that traffic, as long as you maintain your rankings.

If you want passive income from a website or blog, building search traffic should be one of your primary goals.

The downside to search traffic is that it takes time. Google doesn’t usually send much traffic to new blogs, and it may take six months or more until you’re getting anything significant from Google. If you stick with it, the payoff can be well worth the effort.

If you’re looking to learn more about search engine optimization and how to get more traffic from Google, I recommend Stupid Simple SEO. It’s an excellent course that walks you through the important things you need to know to start getting your content to ranked by Google.

Paid Traffic

A lot of people totally dismiss the idea of paying for traffic because there are other ways to get traffic for free, but that can be a mistake. There are a few nice things about paying for traffic:

  • You can get traffic anytime, no need to wait for Google to rank you.
  • You can target the exact audience that you want to attract.
  • You can send traffic to the right pages on your site.
  • You can combine it with a monetization method to create passive income.

Using paid traffic is an option with any monetization method, but it’s especially effective if you’re selling your own products. Paid traffic and a low-maintenance digital product is a great recipe for passive income.

You can use math to figure out exactly how much you are paying per sale, and then make sure that your ad campaigns are profitable. For example, if you sell a product for $100 and you have an ad that is converting at 2% (100 ad clicks lead to 2 sales), you can spend $2 per click and break even. If you can get your cost down to $1 per click, you could spend $100 to get 100 clicks, and at a 2% conversion rate, it would generate 2 sales or $200 in revenue.

Affiliates

If you sell your own products, another way to get traffic is to offer an affiliate program. With your own affiliate program, other bloggers and website owners can send visitors to your website, and if the visitor makes a purchase, the affiliate will earn a commission.

If you have a lot of active affiliates, this can be a great source of traffic that doesn’t require much effort on your part.

Links from Other Sites

Links from other websites can also send a steady flow of traffic to your website. Most links that you get will not send very much traffic, but if you have the right types of links on the right websites/pages, the results can be great.

My biggest success in this area has come from two different types of links:

  1. Links from other sites that led to free resources on my site
  2. Links from other pages that ranked at the top of Google for a popular search term

People love free resources. If you create something of value and offer it for free on your website, other people will probably link to it (may require some effort to let people know about it), and if those links are on the right pages, they can send a steady flow of traffic.

If getting a page from your website or blog to rank at the top of Google for a specific keyword or phrase isn’t possible, the next best thing is to get a link from one of the top-ranking pages that points to your website or blog. I know, it’s easier said than done. But it is possible, and it can work very well. This strategy helped me to grow my photography blogs, and it resulted in traffic every day for several years because of some links that were on other blogs and websites that attracted a lot of search traffic.

One of the best ways to do this is to write a guest post for a high-authority blog in your niche that can rank well in Google searches. Include a relevant link to your site in the article and if the article winds up ranking at the top of Google for a highly searched term, you should get some traffic as a result.

Email List

Email lists can also be a great way to get on-going traffic. The best way to use an email list to generate passive income is to set up a sequence of emails that will be sent out automatically after someone joins your list.

For example, a visitor to your blog completes a form to subscribe to your email list. That sets off an automated sequence where that person gets a series of emails from you at set intervals, that you control. You could send an email every day, once a week, or at some other sequence. Some people set up a sequence that will run for a year, or even longer.

The emails can include links to content on your site and generate traffic. Of course, the emails can also be monetized with links to affiliate products or links to your own products, if you have any.

→ Related reading: Blog Post Checklist

How to Start a Blog for Passive Income

If your goal is passive income but you haven’t started your blog yet, it’s important to keep that goal in mind as you make some important decisions regarding your blog. First of all, I would suggest that you consider starting a niche website instead of a blog if passive income is the goal. But if you’re set on starting a blog and passive income is your goal, here are a few things to keep in mind.

  1. Focus on traffic sources that will allow you to generate ongoing traffic. Instead of putting hours and hours into growing your social profiles, focus on search engine optimization and creating content that will rank well in a Google search. You’ll sacrifice some traffic in the short-term, but you’ll be in a better position for long-term passive income.
  2. Choose a monetization method that won’t require much of your time. Using ads on your site can be a good option since there is no extra work. If you want to create an info product, consider an ebook instead of a video course because it’s likely to require less maintenance.
  3. Have a long-term focus. If you start a blog today and you expect to earn passive income quickly, you’ll probably be disappointed. Plan to put in the work upfront, make slow and steady progress, and after a while you’ll get to the point where you’re making some income passively.

→ Related reading: How to Come Up with a Blog Name, Even if You’re Not Creative

There is one other option that you may want to consider, and that is to buy an existing website or blog. Obviously, this requires some financial investment, but it makes it possible to skip a lot of steps. If you buy a site that is already making money, you could be making passive income right away. My recommendation would be to get some experience creating websites of your own before buying a site, because it helps to know and understand the process, and buying a site without experience can be risky.

How to Make the Shift from Active to Passive Income

If you already have a blog that’s making some money, but you’d like to cut back on the hours and make it more passive, there are a few things that you can do. Here are some things to consider.

  1. Evaluate all the time you spend on the blog and cut anything that isn’t getting results. Most bloggers, myself included, spend a lot of time on things that really don’t matter all that much. Take a look at everything you do for your blog and see if it really makes a difference and generates income. If not, consider cutting out of your routine. For example, if you’re spending an hour every day in Facebook groups, be sure that you’re getting enough benefit to justify that time commitment.
  2. Outsource the simple tasks. Consider hiring a virtual assistant (VA) to handle things like managing your social media profiles, creating graphics for your posts, and managing your email.
  3. Identify your passive traffic strategy. Do you already have enough traffic coming to your site every day with no effort on your part? If not, develop a plan that will help you to reach that point in the future. My preference is search traffic, but for you it may be traffic from a YouTube channel, paid advertising, or some other method.
  4. Decide on a low-maintenance monetization method. Aside from traffic, the other important part deals with how you are going to make money. Do you want to put ads on the site, promote other people’s products as an affiliate, or sell your own low-maintenance products?

Making passive income from a website or blog isn’t easy, but it is possible with the right approach. Hopefully the steps outlined in this article will help you to get on track towards that goal.

READ NEXT: How to Start a Blog

Active Income to Passive Income

How to Convert a Blog or Website from Active Income to Passive Income. Learn how to start a blog to make passive income, or take an existing blog and earn more cash while working less. Tips and ideas to get more traffic without constant work, and low-maintenance ways to make money from a site (like display ad revenue, affiliate marketing, and low-maintenance digital products. #blogging #bloggingtips #passiveincome #makemoneyonline #entrepreneur #makemoney