Types of Passive Income Generated Online and What to Expect From Each – Part 1

Earlier I mentioned a number of content marketing experts I recommend you to follow. Today I saw a post from Pat Flynn, a new episode in his podcasts:

SPI 192: (Updated) Types of Passive Income Generated Online and What to Expect From Each – Part 1

It is a 50 min long podcast I recommend you listen to.

Personally, I have a hard time remembering things I just hear, but if I take notes and try to put my comments around the notes that helps a lot. So following you'll find my notes as I was listing to this podcast. Some might be even relevant to you.

SPI 192 notes

A Passive Income can be a real estate investment or a portfolio on the stock market, or what Pat Flynn is talking about, some online business.

The Passive Income is never fully passive. You still have to look at your real estate once in a while, or adjust your portfolio. Same with the online Passive Income. You still have to look at it, but you are not directing trading time for money.

Pat did not mention it, but I think the biggest difference between the first two and the Online Passive Income, is that the latter needs the smallest capital investment. Almost 0. You just need to invest time.

The idea in these passive incomes is that you invest time now, to gain ongoing revenue later on.

Create real value to your audience!

To get started you can write articles on Medium.com to get used to writing. You won't make money from this, but it can be a great practice and gain a followers.

You will eventually have to build your own web site which will cost you some money, but you can start out on Medium by just spending some of your time.

A number of different income generation strategies

Building a Platform and an audience. Selling a product: digital products, information products, membership sites, courses, even physical products. Affiliate marketing. Niche sites, Authority sites, Coaching, consulting, freelancing.

Pat will go into details later on.


For example buying web sites, flipping them, and then selling them for a profit. (I have no idea what "flipping" means here.)

Some people use affiliate marketing products. They buy ads on Google Adwords or elsewhere to generate traffic to their site where they offer products sold by others and they make money as affiliates of those sites. I don't think this a sustainable business and I certainly don't think it would fit my personality. Pat also reports that basically he lost 500 USD trying this and never making a sale.

Building something that people will want to come back to

Where people know, like, and trust you.

Two ways of building a business:

  1. Building your platform
  2. Finding a problem and solving it

Building your platform

Start by creating a message. Telling a story. Establishing Authority. Building trust, building a "tribe" on a platform. "A platform" is place online where you can share that message and people can continue to follow you. Collect their e-mails. Where you can build a brand

It is a place where you can learn what people want.

It is very time consuming.

Blog, Podcast, video channel.

The blog is not the passive income thing but what you can sell on that blog.

You need your own website!

You home base.

He recommends Bluehost.

Finding a problem and solving it

No ideas, no money, no expertise needed.

Learned from Dane Maxwell in episode 46.

Call companies (usually small business) and extract ideas from the conversation by asking question such as:

"What is something you do every day that you just hate doing in your business?"

"If you had a magic wand, you could change something immediately in your business right now. What would be that?"

Go deeper:

"Why do you feel like that?" "Have you tried a solution to that problem already?" "Why didn't that work out?".

Then create a software that can solve this problem to many people with similar problems and find a platform where you can reach these people with the similar problem.

Places to reach customers

Some places that already have audience where you can put your product and tap into their audience.

Udemy for video course, Etsy for physical products.

You should still have you own web site, your own "home" where you have full control and direct access to your audience and your customers.

Niche site

Building a web site that has a "stop point" where you can stop creating content. A "static" site with finite amount of information.

e.g. GreenExam Academy (Alexa 255,000) built by Pat. See also info about it.

It is still generating 2-4,000 a month. (It used to generate 20,000-30,000 a month).

I wonder why is this huge decline of income and why Pat seems to not care. To the latter I have the answer. He has other, much more lucrative revenue sources. He shares his revenue number every month.

"Riches are in the niches"

"Niche down"

Be small and fast instead of serving a big market.

It is easier to specialize.

(Actually I think it might be harder to specialize, but it is the place where you can really compete and make money. You don't want to try to become a Wallmart.)

Recommended reading: 1000 true friends by Kevin Kelly.

Another niche site Pat built Security Guard Training (Alexa 218,000).

Foodtrucker (Alexa 221,000 but was under 100,000 just a few months ago). Because food trackers don't have the time to look up web sites, but have plenty of time to listen to podcasts while driving, Pat created a podcast for them.

Niche site duel.

Published on 2015-12-18 by Gabor Szabo