Passive income is a lot more valuable than you might think. Every week, I take the time to update older blog posts to ensure they remain relevant and filled with the latest information. It’s a balancing act between writing new content and optimizing what already exists. With diligent maintenance, these posts continue to attract thousands of visitors each month, much like caring for a bonsai tree. This dedication could help you build your own small empire one day!
One piece I revisited recently discussed various passive income streams, rating them by risk, return, feasibility, liquidity, and activity. It’s one of the most comprehensive guides online, particularly highlighting the creation of your own products and dividend investing as top methods for generating passive income.
Creating your own product doesn’t require wealth—just creativity and determination. In contrast, dividend investing requires some initial capital. It’s fantastic that both a wealthy and a not-so-wealthy person can engage in the same activities, especially when public libraries offer free internet access and abundant reading materials.
The Immense Value of Passive Income
Everything starts from nothing. Thankfully, most of us benefit from years of free education that introduce us to various interests. Mine led me to explore ways to make money to support a freer lifestyle. What’s yours?
In the summer of 2012, I published a 100-page book right after negotiating my severance package, having worked 11 years at the same company. I realized a financial runway post-job would lessen anxiety and increase the time to find new opportunities. If you quit a job without a plan, you might lose severance, COBRA health insurance, deferred compensation, and eligibility for unemployment benefits.
Passive Income from an eBook
Within a year of publishing, my eBook started generating about $500 – $1,000 a month in passive income. Not a fortune, but significantly beneficial. The greatest value, however, came from the increased traffic to my website due to the book being pirated. This unexpected exposure brought more readers to my site, compensating for the direct revenue lost from piracies.
After three steady years of earning $1,000 – $1,500 a month, I updated the eBook in 2016, adding new successful layoff stories and the latest on labor laws and severance strategies.
Since releasing the second edition, book revenue jumped to about $2,500 a month, partly due to a price increase and growing layoff anxieties as various industries experienced job cuts.
This venture started as a simple desire to share insights but evolved into a substantial passive income stream of $30,000 a year—enough for a modest lifestyle in many parts of the country. This income boosts my confidence to pursue new ventures.
Calculating the Value of Passive Income
Explaining that you earn $30,000 yearly from a book might not impress everyone at a social gathering, but from an investment perspective, it’s significant. How much would you pay for an asset that generates $30,000 annually with minimal risk?
In a low-interest-rate environment, a steady income of $30,000 could be equivalent to owning a $1.5 million asset if considered risk-free. This comparison highlights the substantial value of passive income, particularly when traditional investment yields are low.
Think Like an Owner to Build Your Wealth
Owners build. They create and nurture until they can’t anymore. I regret not starting Financial Samurai earlier. Don’t fall into a defeatist mentality, thinking you can’t create anything of value. There’s a high chance your solutions to personal challenges could benefit others too.
For instance, my book started as a niche topic on severance negotiations, which seemed counterintuitive at the time. Yet, it now helps many navigate through tough times.
Conclusion
Whether you’re updating a blog, writing a book, or starting a website, these acts of creation can lead to substantial passive income. In just a few years, I was able to leave my day job due to the income generated from Financial Samurai. Imagine the freedom and opportunities that come from leveraging the internet to build something meaningful—not just for financial gain but for personal fulfillment and freedom. Start your website today, and see where it takes you.
