Most of the time when financial experts talk about passive income as a means to indulgent wealth, they are talking about real estate (and it’s usually on one of those infomercials or websites that promise hundreds of thousands of dollars per month no matter what your IQ level). Passive income is basically money that you make without doing anything, so the real estate idea makes sense. You own properties and someone pays you rent every month – you are making money without doing anything more than simply being a landlord. It certainly beats a 40-hour per week working schedule.
Although not all real estate passive income plans are scammy, that’s not the path to retirement that I want to discuss here. If you feel up to becoming a real estate investor and renting property, I’m happy for you, but not really able to help you. What I do want to discuss is the idea of creating passive income through what we do best: writing.
Pay-Per Word or Flat Fee Writing
If you’re at all like me, most of your income from freelance writing comes in through articles or content that you are paid for on a per-word or flat fee basis. Someone says, “Write this for me.” You do it. They pay you, and you are happy. It’s a good way to make money, but not a good way to make money forever (mostly because you have to keep writing forever).
If you really stop to think about the things you are writing for clients, you might find that the work you are hired to do is actually a means to make someone else passive income. How tricky is that? Let’s say someone hires you to write an ebook or SEO articles on running a daycare from home. They then package that ebook or articles on a website with catchy sales copy and a link to pay now through PayPal. You got your one-time payment for the work, and they spend the next five years selling your work for twenty times that much money. There is virtually no justifiable reason why twenty times that money couldn’t be yours; depending on the relevance of the topic, this money could very well serve you up to retirement age and beyond.
Write a Novel, Get Royalties
For most writers (myself included), the ideal way to get passive income through writing would be by writing a novel (that is then turned into a screenplay, and a Hollywood film, and action figures, and all that other crap Harry Potter brands and packages). This is passive income at its best, especially since you get a little fame and copious amounts of money, to boot.
Writing a novel or a nonfiction book is hard work, and it’s no guarantee that you’ll get published, but if you’re already spending 40 hour a week writing, it’s really not that much of a stretch. Set aside five hours of your work week to add to your “retirement fund” by working on a book. You just might get lucky.
Ebooks and Booklets
Writing informational ebooks, booklets, and pamphlets is probably the best way to create passive income as a writer. Ebooks are huge. People love them (the good ones, anyway). They are short, easy to read, and usually fill some sort of immediate need in the lives of thousands of people willing to shell out $10-$50 to buy one.
Chances are, you’ve already written an ebook or other informational content in some capacity or another as a professional writer. I know I have. I also got a one-time payment and moved on. Although it is more work to find a designer, package the content into a format that can be sold, develop a sales platform and website, and take on the task of marketing, this can be a great way to make money without expending too much effort. Once the bulk of the work is done, it’s done.
Online Courses and Podcasts
Online educational classes and podcasts of your lovely self teaching a subject matter are another passive income option. They are very similar to ebooks in the way that you have to create the material, market it, and sell it. However, by packaging your words as an “educational opportunity,” you can reach a whole new audience. And if you really are an expert in some field, there may be the option of connecting with continuing education facilities to even offer credits for the class.
Monetized Blogs and Online Magazines
If you Google “passive income for writers,” you’ll come up with two types of options: putting ads on a website or blog and writing for an online magazine that pays you according to how popular your articles are. While these aren’t my favorite passive income choices, they do make sense. Once you write a blog or create a website with useful, relevant articles, people will start to read it. Once people start to read it, you are more likely to get companies willing to put advertisements on your site. Advertisements = money.
The same is true of those online magazine articles. Most of them (like Associated Content or eHow) offer incentives or bonuses depending on the popularity of your articles. I’ve never tried this, but I’m pretty sure that making a living this way is pretty difficult. It might be a good way to supplement an income, though.
You’re Already Doing the Work
You know how to write ebooks and SEO articles and even full-length books. I know you do. It’s just easier to do it when you are guaranteed a payment through the client who hired you and signed a contract (as opposed to doing the work and taking a risk on it paying off). However, if you aren’t a big fan of the other two retirement options I’ve covered so far, you might have to suck it up and try your hand at passive income. It’s more work now, but from what I gather, it’s a great path to more money down the road.