9 Passive Income Ideas

– Hey friends welcome back to the channel. In this video, we’re gonna talk about nine different ways that you can make passive income. And for each of those, I’m gonna talk about how hard it is to get started, how hard it is to make $100 a month from it and how hard it is to maintain once you’ve created the thing in the first place. For me in my business, these nine different sources generate around $27,000 per week these days with varying degrees of passiveness. And obviously, this has taken me like eight years to build up. So, don’t expect to be hitting those sorts of numbers when you first get started. But this is the video that I wish I would have had when I started my financial independence journey many, many years ago, let’s go for it. All right, so, when I say passive income, I always air quote it because there is really no such thing as passive income. There is no way to make money without doing anything at all. But when I say passive income, what I mean is that its money that is not directly tied to our time. So, let’s say you were to write a book. If you write a book, you publish a book that book is now on bookshelves. You’ve done the work, kind of once, to write and publish the book. But now anytime the book sells, you make money from royalties, that is passive income. You could literally be making money while you sleep because you’ve created this thing, which is out in the world, which is generating income for you. The other thing with passive income is that it always takes a very long time to get going. So, if you see any ads before this video talking about how you can get rich quick by whatever scheme, or if you see people in the comments pretending to be me (screenshot pops) saying, “Oh my God, here’s how you can get rich quick with crypto, WhatsApp this number.” That is all a scam, it’s not gonna work. There is no way to get rich quick. It is not a thing. So, if you’re looking for a get rich quick scheme, those things just don’t exist. So, you might as well not even try. And the way I think of this, is that ultimately money is just a medium for exchanging value.

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The only way to make money is to provide value. And the only way to make passive income, passive money, is to provide value in a way that is not directly tied to your time. So please, please, please, do not try and join and get-rich-quick scheme, they don’t exist. I’ve had lots of messages over the years from people who have tried signing up to a get-rich-quick crypto scheme or a gambling scheme or a, “Hey, here’s how you kind of play poker online.” None of these things ever work. People always end up losing money. The only way to make money is by providing value. And so, let’s talk about the nine different ways (icons pop) that you could provide value if you wanted to. Just before we dive in, I wanna tell you that I’ve just launched my brand new Skillshare class, about Productivity for Creators, how to start a successful side hustle. That’s linked in the video description. Skillshare is sponsoring this video. I will tell you more about Skillshare later on, but I wanna plug my own class because I think it’s genuinely really good, and people really like it and it’ll help you get tips on how you can start side hustles in your spare time. Anyway, let’s get into the video. All right, so, let’s kick things off with investing in stocks and shares. And in this context, the way that we provide value is by offering up our money. Providing money and investing in a service is in a way giving a form of value. And so, when we give our money to a company in the form of buying their stocks, it makes sense that we would get some kind of return for that investment. And we’re starting with this because investing in stocks is the easiest way to make any kind of passive income. If you have any sorts of savings and they’re sitting in a savings account, earning 0.01% interest, they’re not really doing very much for you. Whereas if you had those stay savings and put them in stocks, you could potentially be earning passive income from the money that’s otherwise just sitting there. Now, I’ve got a whole video called “The Ultimate Guide to Investing in Stocks and Shares for Beginners”, which is gonna be linked over there somewhere.

 

So that is a solid half hour-long introduction to stocks and exactly how they work. But the thing that I recommend for most beginners as a non-financial advisor, and this is not financial advice, purely for entertainment purposes only, or so people say, or at least the thing that I do is that basically all my money that’s in stocks and shares is invested in index funds. Now an index fund is something like the S&P 500. And when you invest, let’s say $1,000 in the S&P 500, that basically means that your $1,000 is distributed amongst the top 500 biggest companies in the US. So, weighted by how big they are. So like, 2% of it would be an Apple, 2% in Facebook, 2% in Google, 2% in Microsoft. And then you probably won’t have heard of the 500th company on the list, but basically, all the big US companies you’ve heard of you end up investing in all of them a little bit at a time. So, if you wanna get started with that, all you need to do is sign up to a stockbroker. If you’re in the US you can use a Webull, I think I’ve got a link in the description. If you’re in the UK, you can use Freetrade or Vanguard. Basically, whatever country you’re in just Google the phrase, best stock broker platform, your country name and you’ll find something that works for you. And then it’s very easy to be able to invest in an index fund. So, within our famous side hustle assessment matrix, we’re gonna give the difficulty of starting, a one-star rating, one out of five. It’s very, very easy to get started with stocks. How hard is it to make $100 a month by investing in stocks and shares? Well, this kind of depends, because it depends on the performance of the stock market overall. So, in the last 12 months, from 2020 to 2021, the S&P 500, has actually increased by about 50%. That is a lot, it’s like gone up by a solid 50% despite COVID and everything going on. So if in April 2020, you had invested $2,400 in the S&P 500, the fact that it’s gone up by 50%, means you would’ve made $100 a month. But obviously, this is not the way to look at it because things can go up and down, and the stock market has different levels of performance depending on what time period you’re looking at. But if we average out the last 30 to 50 years, the S&P 500 has had a roughly 10 point something percent return. Which means every year, on average, over the longterm, it goes up by around 10%. This is not inflation-adjusted for any economists among us. And so if we do some back of the envelope calculations, if we wanna earn $100 a month, passively, through stocks and shares, we would need around about $12,000 invested in the S&P 500, to make that 10%, $1,200 a year, which is $100 a month. But as I talk about in that video about stocks, overtime, we have compounding, and so, if you put in $7,500 in the S&P 500 and you left it there for five years, then five years later you would be making roughly $100 a month, if we go by this very average figure of 10% a year. Or if you invested $5,000 in the S&P 500, then 10 years later you’d be making $100 a month in purely passive income. Again, assuming the 10% average. So overall how hard is it really to make $100 a month in passive income from stocks and shares? Well, it kinda just depends on how hard is it for you to make 5,000, 7,500, or $12,000 in savings and put them into a stock market index fund? And crucially this is money that you shouldn’t need to touch in the next five to 10 years, at least. So basically how easy is it for you to make that sort of money? Obviously varies massively depending on which country you’re in (laughs) and what your circumstances are and what your job is. But if you’re in the UK or the US where the median kind of average salary’s, roundabout $50,000, something like that, then again depending on your circumstances it’s not that hard to get $10,000 in savings. Obviously, if you’re supporting a family of 15 people on $50,000, it’s different. If you’re a single person, again, it’s different but I’m gonna give this roughly a three out of five-star rating for difficulty of getting $100 a month. Obviously, if you live in a country like India where the average salary is $3,600 a year, it’s very very difficult to make $10,000 in savings overall. And finally, the third category in our side hustle assessment matrix is how hard is it to maintain this income once you’ve set it up in the first place? And we’re gonna give this a one star out of five because once you’ve got the money in you just like set it and forget it and it’s not that hard to maintain. There are other sources of passive income that require higher degrees of maintenance over time. But stocks and shares is a very very easy way to make passive income and to use my personal example these days my stocks and shares portfolio, which I’ve been investing in since 2015 is now worth a roundabout of $350,000. And the vast majority of that is in the S&P 500 index fund. Now, I can’t be bothered to work out the actual inflation-adjusted returns for that. But again, if we assume a very very rough average of 10% a year, then that averages out to around $682 per week in purely passive income. All right, idea number two for generating passive income is to start a YouTube channel. This is something I well specialize in because I’m here on YouTube and I actually teach a course called the Part-Time YouTuber Academy, linked in the video description where I teach people how to do this sort of thing. So let’s use a side hustle assessment matrix and we’ll talk about this. How hard is it to start a YouTube channel? Well, I’m gonna give this one out of five stars because it’s actually very very easy to start a YouTube channel. You just go on youtube.com. You click to create a channel and you can upload videos by just filming with your phone and uploading it. In reality, it’s a lot harder to make good videos, and making good videos is how you grow on YouTube. But getting started on YouTube is very, very, very straightforward. The real question is how hard is it to actually make real money from YouTube? So again, let’s say we wanna make $100 a month in passive income. What does that look like? Well, firstly, to be eligible for monetization on YouTube, you need a thousand subscribers and 4,000 hours of watch time. It took me six months and 52 videos to get my first 1,000 subscribers. And if we look at the averages, it actually takes on average 90 something videos to get to 1,000 subscribers. So that’s quite hard if you’re thinking you’re gonna start a YouTube channel and start making money from day one your, you know, that’s basically not going to happen. It took me 52 videos, six months to get there. So if people message me being like, “Hey, I wanna start a YouTube…” I was like, “Look, you have to be able to put in the effort and do this for a very long period of time at least once a week.” I say for at least two years before you can expect anything in return. But let’s say you’ve hit your thousand subscribers and your 4,000 hours of watch time. How hard is it to actually make $100 a month? Well, on average, the kind of revenue per thousand views on YouTube is roundabout $2. So this varies massively, but let’s say on average about $2 per thousand views. Therefore if you want to make $100 a month you need 50,000 views on YouTube to make $100 a month. Let’s say you make one video per week and let’s assume you’re not getting any traffic on your older videos. That means every video you make needs to get around about 12,500 views. And very roughly the average YouTube channel can expect a roundabout 20% of their subscribers to equal the average view count for each video. So on YouTube, if you had 62,000 subscribers, very roughly, very average lead, you can expect 20% of them i.e. 12,500 views on each video. And assuming you have no evergreen content of the longterm you would need to run about 60,000 subscribers to be making $100 a month. In reality, you make $100 a month a lot before 60,000 subscribers. I think I was making $100 a month when I had like 10,000 something subscribers, like it was fairly early on. But when it comes to assessing how hard is this to do I’m gonna give this a four out of five stars. It’s actually very hard to make compelling YouTube videos and it’s very easy to get started, but it’s hard to do well. It’s totally worth it, it’s a great skill set, it’s really fun. You get to meet people across the internet. You get to learn how to talk to a camera and how to film and video edit. And it’s really great but it’s very hard to actually make money from YouTube. Finally, in terms of effort to maintain. Like actually getting that first thousand subscribers is a lot harder than keeping it growing. ‘Cause once you’ve got a thousand subscribers and once your channel is growing it means you’ve landed on a formula that works. And so maintaining it then becomes easier then starting from scratch. And so in our side hustle assessment matrix we’re gonna give maintenance of a YouTube channel passive income stream to be round about two out of five stars. To use my example, I made 70 videos before I started making any money from YouTube AdSense. And these days the YouTube channel makes a roundabout $12,000 a month in passive income from YouTube AdSense. Now, again, this is not entirely passive because I keep on uploading new videos, but actually the bulk of the amount of money that we generate from ads is from older videos rather than videos that were uploaded this month. So with that caveat, $12,000 a month passive income is roundabout $3,000 a week thanks to this YouTube channel and thanks to you guys for supporting it and all that stuff. There are other ways of monetizing YouTube, like brand deals and like selling merch and just all other sorts of stuff. But it doesn’t really count as passive income through YouTube, which is why I’m not including this in this side hustle assessment matrix. Idea number three for making passive income is to start a podcast. This is generally easier than starting a YouTube channel. Although growing a podcast is a lot harder then growing a YouTube channel because podcasts themselves don’t really have an algorithm that’s helping them grow. In fact, a lot of podcasts grow by having a YouTube channel, which is kind of weird. Right, so how hard is it to start a podcast? Well, again, one out of five stars, it’s very very easy to start a podcast. Go on anchor.fm and you can literally use your phone and you could pass your phone around between you and your friends and you can start a podcast. You can use a website called riverside.fm that I’ve recently invested in as an angel investor. Riverside makes it very easy to record remote podcast interviews. It’s very, very easy to start a podcast but how hard is it to make $100 a month in passive income from a podcast? Well, again, this is not quite passive income because the way podcasters make money is by relying on brand deals. There is no YouTube AdSense for podcasts. And so you need sponsorship or a brand deal to make any money for your podcast, generally speaking. And apparently, you can expect to make around $18 for a 30-second ad in a podcast and $25 per thousand views or a thousand listens for a 60 second ad. So if you wanna make $100 a month and assuming you have a stream of sponsorships who are giving you that level of a sponsorship deal based on your download numbers, you would need around 1,000 downloads per episode, if you have a weekly podcast. So you’d have 4,000 downloads a month. And if you’re putting a 60-second ad in there for $25 per thousand views, that would make you round about $100 a month. By having a thousand downloads per episode and four episodes per month. This begs the question how hard is it to get a thousand downloads per month? Well, it’s a lot harder to get a thousand podcast downloads per month than it is to get a thousand YouTube views per month. Because again, YouTube has so much distribution built in it’s different to podcasts. Also loads more people are on YouTube than on podcasts. But if we look at the stats then it’s the top 20% of podcasts in the world that get on average more than a thousand downloads per episode. To use a friend of mine as an example, my housemate Sheen started her own podcast around five months ago, there’ll be a link to that in the description, if you want to check it out, and on average, her podcast gets roundabout 400 to 500 downloads per episode. This is not bad at all, specially considering she started five months ago and had zero audience when she started. So she didn’t have the unfair advantage that I did when starting my own podcast, for example. And because she’s just launched season two of her podcasts and has just started posting videos about it on YouTube that will really help the podcast grow. And I’m pretty sure that in the next six months she’ll be getting to a point where she can quite easily make $100 a month from her podcast. So going back to our side hustle assessment matrix. Starting a podcast one out of five stars, making $100 a month I’m gonna give that a three out of five stars because it’s hard, but not as hard as maybe monetizing on YouTube where you have this minimum threshold. And finally maintenance. Well, it’s not really passive income because you do have to keep on making podcast episodes because the brand deals are associated with that. But again, once you’ve stumbled on a formula that works, once you know how to be a podcaster it’s easier to continue going once you’ve already gotten started, as is the case with most things. And so in terms of maintenance of the podcast I’m gonna give that two stars. To use me as an example, so me and my brother have a podcast called Not Overthinking, link in the video description if you wanna check it out, but we make around about $625 per week from the podcast overall from brand deals and from our membership. All right, so idea number four for generating passive income is to become an affiliate marketer. Affiliate marketing means that you are selling other people’s products but you’re getting a percentage of the sales from those products. Now, apparently 48% of affiliate marketers globally earn $20,000 a year which is $1,660 a month. Which is actually not bad at all. Like people are doing very well with affiliate marketing overall. So how hard is it to get started with affiliate marketing? Well, I’m gonna give this a two out of five stars. Basically, you can just sign up to an affiliate program like Amazon Associates. So Amazon have their own affiliate program which I think is probably the biggest in the world. And then once you have your little special links you can post those on your website or on Twitter or on social media or whatever. And if people buy the product through your link or in fact buy any product on Amazon through your link you’ll get like some tiny percentage of the sales. So pretty easy to get started with affiliate marketing, but how hard is it to make $100 a month? Well, this is actually kinda hard. So let’s say you had a product that was $50 that you were trying to sell and you were getting 5% commission on it. That’d be pretty good. Amazon doesn’t offer nearly as much as 5% it offers like two or 3%, something like that. And let’s say your average conversion rate i.e. people visiting the thing versus people actually buying the product after visiting the thing, let’s say that’s 1% which is pretty reasonable for conversion rate. You would need 8,000 visits to your website or whatever to make $100 a month. It’s actually quite hard to get 8,000 visits per month to your website, to a specific product page. And generally doing well in affiliate marketing requires lots of upfront effort in terms of either building an audience or building such domain authority in whatever space you’re in, that you’re sort of organically getting traffic. Now, other than Amazon there are a few other affiliate programs that I’m part of. One of them is Skillshare who are kindly sponsoring this video. I’ll tell you about the sponsor segment later but Skillshare has an interesting affiliate program where if you refer someone to sign up to a free trial of Skillshare, you can get $7 in affiliate commission just for that thing. So if you wanted to make $100 a month from affiliates, you would need 15 people every month to sign up for Skillshare with your affiliate link thing. How hard is it to get 15 people a month to sign up with your affiliate link? Well, it’s not that hard if you have an audience and it’s not that hard if you have your own classes on Skillshare, like I do, I have like nine of them. And so if I wanna make money through Skillshare affiliates, I can just tell people, “Hey guys,” like I can tell you that, “Guys I’ve just released my latest Skillshare class Productivity for Creators, how to start a successful side hustle, so there’ll be a link in the video description if you wanna check that out.” Like that would be hopefully some of you will see that, will click on that link in the description, and then that will be me getting some affiliate income from Skillshare for this video. So going back to our side hustle assessment matrix how hard is it to make $100 a month? I’m gonna give this a 3.5-star rating, because again you need an audience. And as we always talk about on this channel the way you build an audience is by creating useful content, putting it for free on the internet once a week and doing this for at least two years. If you just follow those three steps I guarantee you’ll have an audience and you’ll be able to make some kind of money through this passive income stuff. But that’s quite hard to do no one sticks to it for at least two years. So we’ll give that a 3.5-star rating. But the good news is once you’ve created it. And once you started making money from affiliates it’s actually quite easy to maintain because especially if you have evergreen content, the sort that isn’t relying on, like current affairs or the latest news, the sought that people might search for over a long period of time, this becomes like relatively reasonable passive income. Now, if we look at me and my business, these days from Skillshare we make a roundabout $11,000 per month in affiliate income which approximates to around $2,750 per week. And from Amazon on average, like it’s around about $450 a month from the Amazon UK store and a little bit more from the US and Canada. All right, method number five of making passive income is by selling digital products. Now these are products that you create once, like an ebook or a download or an app or something like that. So you create it once and then you can sell it multiple times because selling digital products doesn’t usually have any costs associated with it. One really good example is this guy called Traf, who I follow on Twitter, who made an iOS 14 icon set and sold it for like $30 a pop, a few months ago and ended up making, I think like $300,000 in the course of like a few weeks, just because loads of people around the world wanted to buy his icon pack. So he put the work into creating the pack and now he’s selling it for lots of money. Another example is my YouTuber friend Oliur, who has made, as he says $700,000 from selling his website Tumblr themes since 2014. So he made the website themes for Tumblr, he sells them and he makes $700,000 on average. Well, overall, since 2014, that’s pretty cool. So how hard is it to get started making digital products? I mean, anyone can write an ebook an ebook counts as a digital product. So I’m gonna give this a two-star rating, two out of five stars, but obviously like again money is an exchange of value. So the thing that you’re selling you have to be providing enough value to compensate, to make up for the price that you’re selling it for. And that’s often quite hard, especially if you don’t have any experience in this sort of field and how hard is it to make $100 a month? Well, you know, it’s very easy to create an ebook but it’s a whole different ballgame trying to get people to actually buy your ebook or buy your icon set or buy your app or buy your website themes. And because the market around this stuff is so competitive like you have to be genuinely really good to get people to buy your stuff. And the way you get people to pay you money for something is that you identify a problem that they have, you solve that problem, and then you charge money for it. And if you can do those three things, then it’s, you know I wouldn’t say it’s easy to make $100 a month but it’s very doable to make $100 a month. You just genuinely have to have something that solves a pain point that other people are willing to pay for. So we’re gonna give this a three out of five stars to make $100 a month from selling digital products. And finally, in terms of maintenance, we’re gonna give this a two out of five stars, because usually, you do have to maintain your product a little bit but it’s often easier to do like it’s much easier to maintain a product then creating a product in the first place. Idea number six for passive income generation is to create an online course. Now online course’s sort of like a digital product but generally online courses are in video format. In fact, this whole video is so long, it could basically have been an entire online course. Maybe I’ll do one about this very topic. And in terms of getting started, we’re gonna give the starting difficulty a two out of five stars, ’cause it’s not that hard to make an online course but generally, you do need to know how to do video. So, you know, you actually could film an online course on your iPhone or phone, whatever phone you’re using, if you’re one of those Android heathens. Stick your phone on the side, talk to the phone, teach something. So it’s not hard creating one, but in terms of making $100 a month, again, at that point, your course needs to actually be good. And the only reason people will pay for it is if the course is actually good. Now you can avoid having to charge for your online courses by using a website like Skillshare, who are very kindly sponsoring this video. I have tons of classes on Skillshare. I think we’ve got nine on them in total. I’ve been teaching on Skillshare since September 2019 and I’ve actually just released my new online class called Productivity for Creators, how to start a successful side hustle. Where I teach you the ins and outs on how you can well, create your own side hustle in your spare time without quitting your job. If you wanna check this out then the first of thousand people to click the link in the video description will get 30% off the annual Skillshare premium membership. This is actually a really good deal. I pay for Skillshare, I’ve been paying you for it for years even after I started teaching on it because it’s genuinely a fantastic place to learn stuff. They’ve got thousands of classes on all sorts of other topics, but you should definitely check out mine, like the nine that I’ve got. There are three around productivity now, like the fundamentals of productivity, the sort of productivity equation, which is how I think of productivity and Productivity for Creators. I have two on how you can study for exams. If you’re in school, if you’ve got exams to prepare for those apparently are really good, they’ve got very high ratings. And if you’ve already had a free trial of Skillshare then you can still use that offer that if you’re one of the first of thousand people to hit the link in the video description, you will get 30% of the premium membership and you can check out my class which I have to say is pretty good. Anyway, thank you Skillshare for sponsoring this video but genuinely Skillshare is a great place to teach stuff because you can teach things on Skillshare without directly having to charge for them. Which is why I love putting my courses on Skillshare. It’s kinda like having something on Netflix in that the end-user does not have to pay directly for the product. And the other nice thing about Skillshare is that it’s like, it’s sort of like YouTube in that anyone can upload a class to Skillshare, provided it meets certain quality requirements. And so it’s a lot easier then having to make your own website and create your own courses platform and all that kind of stuff. So, pretty easy to start. We’re gonna give this a two out of five but how hard is it to make $100 a month from teaching online courses? Now, this kind of depends. If you’re going down the Skillshare route then to make $100 a month in Skillshare you need roundabout 1,700 minutes of watch time which is 28 hours of watch time. So if you have a one hour class on Skillshare you need 28 students to take that class every month and watch it with a premium membership roughly very broadly speaking. And that will give you roundabout $100 a month. At least those are based on my figures over the last like two years of being on Skillshare. Now, how hard is it to get 28 people a month watching your class? Well, if your class is actually pretty good, it shouldn’t be too hard to get 28 people a month watching it. If you have an existing audience it’s very easy to get 28 people a month watching it because people already know, like, and trust you hopefully. And so they’ll watch your stuff and give you a shot because you’ve already built that goodwill with them. But again, the nice thing about Skillshare as a platform is that they have like their own algorithm. So the good stuff rises to the top. So if you genuinely have a really, really, really good class and you put it on Skillshare, then even if you don’t have an audience, there is still a high chance that if the class is actually good and people watch it a lot and people recommend it and give it high ratings, it will rise to the top. And it will start getting recommended to people who find it on the Skillshare homepage or who searched for it specifically. The other way of making $100 a month from a course is to just charge $100 for a course. And then if you do that, you just need one sale every month. So how hard is it to get one person a month to buy your course? Well, again, if it’s good, you know, the world of online education is exploding so much every year more and more money’s being spent on online education especially with the whole pandemic stuff. So if you have a valuable skill that you can teach I think courses are one of the best and easiest, or one of the best ways of making passive income because it’s fun to create a course, you can teach stuff, you don’t need that many technical skills, like making a website or anything like that. Just shove it on Skillshare. And then people can take your course and learn on the internet. And like, you know, it’s just cool overall. And the nice thing is that once you’ve made the course, and once you’re making $100 a month from it, maintaining that level is actually quite easy. We’re gonna give that a two out of five stars because generally, you don’t need to update the course that often. And you can do that once in a while and you just need to make sure you’re getting a reasonable amount of traffic to it. And hopefully, that traffic will grow over time. These days, the vast majority of my online courses, at least the very passive ones are hosted on Skillshare and it’s kind of ridiculous. But these days they make roundabout 60,000 to $65,000 per month in purely passive income. Like I literally do nothing for my Skillshare classes once I’ve made them other than a reply to comments and other than occasionally plug them in videos. And that’s like $60,000 a month in passive income. That means this is a roundabout of $15,000 per week. And this makes up the bulk of the $27,000 a week that this business currently generates in purely passive income. Idea number seven for passive income is by creating some call it some kind of paid membership or community model. Now, again, this is generally a bad idea unless you have an existing audience, which we keep coming back to. Like everything becomes easier when you have an existing audience by creating content that has been valuable over a long period of time, very consistently. That audience knows likes and trusts you and so when you say, “Hey guys, sign up to my Patreon”, then some people are likely to do that thing. The other way of doing a membership is by creating a value proposition that is so compelling that people would be willing to pay for a community-like service for this. If we use Patreon as an example my friend Hannah Witton, who’s a YouTuber, she’s got roundabout 600,000 subscribers on YouTube. And I think she has around 600 Patreons, 626 last time I checked, which means if we look at our Patreon stats, which are public, she’s making somewhere between 2,000 and 5,000 pounds or like 3,000 and $7,000 per month in passive income from this audience. But it’s like 600 people out of an audience of 600,000. So one in a thousand of her subscribers have signed up to her Patreon. So clearly, you know, if those stats are true across the board and they kind of are if you look at Matt D’Avella Patreon on as well you need a big audience to make a significant amount of money for Patreon. Again, this sort of depends on how much you’re charging for them and exactly what value you’re providing. Another example of a paid membership community is my friend Anne-Laure who runs a website called Ness Labs and they have a paid membership community which is $5 a month. And she started this when was it, in the summer of 2019. She had zero audiences at the time and she just wrote a hundred blog posts over a hundred working days and built up an audience such that in March 2020, when she launched a membership she had some paying members for it initially. And I think last month she’s just passed $100,000 a year in annual recurring revenue, which is pretty awesome from something that started less than two years ago. So how easy is it to start a membership program? Well, it’s actually very easy. We can give this a one-star because it’s very easy to start one, you just make an account on some kind of membership platform like Patreon. But to make $100 a month, you need to provide $100 a month worth of value. And that’s actually quite hard to do. We’re gonna give that a four out of five stars but the nice thing is, again, once you’ve got that formula, once you’re making $100 a month it’s actually a lot easier to maintain it because the way the economics of membership communities work, it’s provided you keep showing up and providing value in some capacity, you know, people have already signed up for the thing. So it’s not too hard to maintain that level of support that you’re offering them. For this business, we have a membership community for our Part-Timer YouTuber Academy for the alumni, which is called the Part-Timer YouTuber Inner Circle And we make roughly $2,800 a week from this membership community. It’s not very passive. We run like three or four events per week along with like twice a day, coworking events on zoom and we have lots of stuff going on. So it takes a lot of work, but $2,800 a week it’s pretty good for a membership community. All right, nearly there. So idea number eight for generating passive income is creating a business that sells goods or services and then automating or delegating aspects of that business so that the income that you generate from it is reasonably passive. This is the stuff that Tim Ferris talks a lot about in “The 4-Hour Workweek”, where there are a lot of businesses that you could make where you’re selling a good or selling a service and then you can delegate, outsource, automate and intelligent ways to make the income passive. So again, using my friend Oliur as an example, on his YouTube channel, he talks about his $1 million Shopify store. He designs manufactures and sells these really cool vegan leather kind of desk accessories and bags and mouse pads and that kind of stuff. And this was loads of work in setting up but now he’s got a team of three other people that manage the business. And so he spends proportionally less of his time running that business. And so it’s sort of passive income for him. Even though these days, he still does spend around 10 hours a week, maintaining things. Equally, if you’re going down the service route, I’ve got a friend who runs an Instagram and Facebook ads marketing agency, where he has clients who pay him some, I think a few hundred dollars per month to manage their Facebook and Instagram ads. And for him, it’s like a small amount of work initially to set up the Facebook and Instagram ads but then it’s sort of automated and he’s got a team around it. And he’s used using things like Zapier to automate aspects of that business, so that each month he has to do a very small amount of actual work to keep it ticking along. So these are different ways of generating passive income from a kind of goods or service-based business. But it’s quite hard to get started with this stuff. To get started we’re gonna give this a four to five-star rating because again, you need to create a business and it’s quite hard to make a business that genuinely provides value. Equally, we’re gonna give it a four out of five-star rating for making $100 a month in revenue. Because again, you have to be able to provide value and providing value is hard. Like it’s not as easy as making an account on a stocks platform and just putting some money in. You actually have to give value to people which is kind of hard. But the nice thing is once you get started like with anything, maintenance is a little bit easier. So we’re gonna give that a three out of five-star rating. Finally idea number nine for generating passive income is to build an app or a website or some kind of software product that you can offer either as a one-off or more likely these days, as a subscription service. And there’s a whole category of this called SAS. software as a service. Now, if you look at the website, indiehackers.com there are like literally hundreds of examples of people who have built software businesses that are making passive income and they share their revenue numbers and they tell you how they got started and they give you their tips. In fact, I was recently interviewed on an episode of the Indie Hackers podcast, which is really cool ’cause I’ve been listening to it for years and it’s like following the website for years. And I was interviewed around the concept of starting an online course like the Part-Timer YouTuber Academy. Now I’ve had a bit of personal experience with this. So when I was at university I made a website called BMAT Ninja and UCAT Ninja. So software as a service it was a question bank for medical applicants applying to medical school to help them do well in the admissions tests. And this was something that me and my brother coded completely from scratch. He and I both know how to code, we learned when we were young. And so we worked over the summer of 2015 to make these things happen. I think in year one, we made about $10,000 and in year five last year, it was around $25,000 from BMAT Ninja. So, you know, it’s pretty good money but it was a lot of work to set these things up. And so in terms of starting out I’m gonna give this a five out of five-star rating because to make an app it’s actually quite hard. You have to know how to code for the most part you have to be able to offer something compelling and you have to actually build it which takes a lot of work and it’s very hard, but it’s a lot of fun. And then once you’ve made it I’m gonna give $100 a month difficulty a four-star rating. Because again, it’s easy well, easy enough. (laughs) You can make an app, but then getting people to pay for the app is an entirely different kettle of fish. So we’re gonna give that four stars. But the nice thing is like with everything, maintenance is a little bit easier so we’re gonna give that a three-star rating. If you like this video and you wanna get started with your own entrepreneurshippy passive incomey generating journey on the internet. Check out this short playlist over here which is some of my favorite videos that I’ve made around tips for entrepreneurs. How I got started creating my businesses from scratch, how I learned to code that sort of stuff. That’s all in the playlist over here. Thank you so much for watching and I’ll see you in the next video, bye-bye.

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