How To Make Passive Income Online | Niche Facts

How To Make Passive Income Online

how to make passive income

Passive income is a beautiful thing.

Imagine not having to work for money.

Instead of grinding it out in a cubicle, day after day, with a capped earning potential, imagine a flow of automated income that you control.

While many people are rightly skeptical of passive income opportunities, I'm here to tell you that it is possible.

But, it will take a lot of work.

This is not a way to "make money online fast".

The good news is that the work can be fun!

In this post, I'll show you how I'm generating a passive income online and discuss how you can implement my free strategies to create your own residual income stream.

What Is Passive Income

I'll defer to Wikipedia's definition:

"Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it."

The keywords here are "minimal to no effort...to maintain it". 

Below I'll walk you through how I achieve this trick- and show you how you can to. 

My Approach

In my opinion, the best way to generate a real passive income that can pay your rent or even 10x your full-time salary is to build niche, content sites monetized with display ads, by affiliate marketing, and even eCommerce.

This residual income model has been amazingly successful for me:

Proof Of Income

Income Report

I've been averaging over $30,000 a month for awhile now- so the above figures only show my acceleration to $30k+ earnings.

Why I Love Content Sites

Content-rich websites are the best, legitimate online business, in my opinion.

Yes, there are lots of other forms of passive income.

You can invest in the stock market and receive dividend payments; you can buy a rental property; you can buy vending machines. I really don't know much about those strategies.

And, frankly, they bore me.

I don't understand finance. Rental properties sounds like a huge hassle.

And I don't want to be running around restocking vending machines with soda or Blue-Ray discs. 

No Money? 

Plus, what if you have no money to invest?

Indeed, those aforementioned passive income strategies take a lot of upfront capital that you might not have.

With content sites, it costs very little to get started. And if you have initiative, creativity and execution, you can do a lot of the legwork yourself.

For example, the keyword research, writing and content formatting.

Down the line you can outsource a lot of these tasks to virtual assistants (read how).

But if you're on a budget, and want to make income from home, or even become 'rich', it's a low-cost, easy way to begin building an automated income internet property.

Why?

Because if you spend time creating high-quality, authoritative websites, you'll get a passive flow of organic, search-engine traffic to your content.

You'll be making money while you sleep. 

Passive Traffic = Passive Income

I wake up every day and check my income stats from the day before- these sites are earning money while I'm at the gym, browsing Reddit, and while I'm spending a lazy afternoon watching Netflix in bed at home.

Getting Started With Niche Sites

Use the strategies on this page in conjunction with my niche site process. Here it is in a nutshell:
  1. If you want a complete, step-by-step system to start growing your own highly profitable affiliate & authority niche site, check out AuthorityHacker's Authority Site System
  2. A reliable and fast hosting solution like SiteGround (it's what I use)
  3. A brandable domain name from GoDaddy (my guide)
  4. A premium theme- I use GeneratePress but there are some cool niche themes on ThemeForest
  5. Image & graphics from DepositPhotos (all legal and licensed)
  6. Content from iWriter (my review)
  7. An automated social media drip campaign from MissingLettr (my review)
  8. An auto-responder to build your email list– ConvertKit is what I'm using
  9. Finally- you can always refer to my free step-by-step niche selection guide and all of my free niche reports for inspiration

How To Get Started

I wrote up a whole guide- this simple tutorial walks you through how to select a niche, publish monetized content, and simple traffic generation strategies:

How To Start A Profitable Affiliate Site – Niche Facts

If you’re feeling overwhelmed and just want to take action building a profitable niche website, this guide is for you. Below I’ll walk you through a super-simple site set up if you want to create a money-generating niche site- no hidden costs. My sites bring in over $340,000 a year.

The basic idea is to: 

  1. Choose a niche (I have a fail-safe strategy if you just can't decide on one)
  2. Mind map content structure of your site
  3. Begin producing content
  4. Design social sharing strategies
  5. Once you have traffic, monetize with affiliate & display ads
  6. Scale your site with writers and virtual assistants

The Passive Income Fallacy

The tricky part about earning passive income is that if you're using my approach- it takes a ton of active effort to build something that's passive.

Many people searching out extra income ideas online, in my experience, lack the ambition and hustle to actually implement and execute a strategy.

They want the passive income stream- but they don't want to work for it.

I'm lucky, though.

Do You Love It?

I enjoy the grind of building websites. I enjoy the challenges and problem solving- it's inherently satisfying to confront complex obstacles and solve them.

I haven't discovered how to motivate people to begin their online marketing journey.

If the idea of leaving your cubicle job isn't motivating enough- there's nothing I'll be able to say that can be even remotely as inspiring.

Can you succeed if you don't love it? I think so...

It Had To Work

While I love building these blogging sites, confronting their ongoing challenges, and experiencing their tremendous successes, I was really hard up for money when I started.

You can read my full story here, but suffice it to say, I had just been laid off and I needed these sites to work.

Necessity is the mother of invention- and I worked ridiculous hours.

I did not want to return to the corporate workforce- and I knew that legit success was just around the corner.

Going from a $100 month to a $10,000 and even $30,000 month was merely a matter of scale. 

And the way that I scaled was by working really, really hard.

So, the ambition of this post, and of NicheFacts.com itself, is to provide an early roadmap for ambitious doers who envision a better quality life for themselves.

Whether that's earning a side, second income or building a 6 or 7 figure website, I hope I can provide initial direction with my Niche Reports and Tutorials.

How To Make Money Fast Online

If you're looking to earn money online fast- this is not the strategy for you. 

As I explain below, this is a gradual process- not a solution for people looking for ways to 'make money online fast'. 

If you really want to do it fast- I'd recommend checking out Alex Becker's YouTube channel.

He's got some great videos on combining paid traffic with a Shopify eCommerce store.

With paid traffic and high-margin, physical products, if you get the numbers working, you can buy traffic immediately and cash in on product sales.

With drop shipping, you don't even need to warehouse the products yourself. 

It is doable- but requires dedicated action.

How Does It Work

The general method I recommend is choosing a niche and producing long-form, quality content that ranks in search engines and is promoted across social media channels.

Display Ads

You can monetize this content by inserting display advertisements from Google AdSense, Media.net, Taboola, and others. 

Affiliate Marketing

Or you can monetize with affiliate marketing- using affiliate links to promote physical or information products to your readership.

The Amazon Associates program is the most popular physical product affiliate resource on the internet. It offers access to a near-infinite range of products.

Clickbank and WarriorPlus is a popular information product marketplace- you can sort through a multitude of offers ranging from horse betting tip services to Fibromyalgia health solutions.

eCommerce

You can even sell products or services on your site.

Say you've built up a cat blog- perhaps you offer behavior training consultations by Skype or you sell your own feline health product through Amazon, or even through your own site.

The point being, once you've published content and get traffic to your site, you can experiment with different monetization strategies that generate revenue.

It's 'passive' in the sense that, once you're getting recurring visitors to your blog from organic search and social media click-throughs, the money you're generating from display ad clicks and impressions, affiliate sales, or product purchases, doesn't require your active facilitation.

What I Do

I focus on building multiple streams of income from my internet properties.

My top earning site (affiliate marketing) specializes in product reviews. I have close to 600 product reviews as of this writing.

I focus on ranking for product terms like "dust extractor" or "crimping tool" and link to Amazon. These affiliate links generate a commission on every sale. I send several thousand clicks to Amazon every day.

I also have a website property that specializes in technology (display ads)- basically providing tech solutions for common software errors. This site is monetized with display ads.

Every day users flow through the site, most often finding it through Google Search, and they click ads in the content.

I don't have to do anything on these sites to acquire the traffic or facilitate the clicks that generate the revenue.

The cost of entry is content and web hosting.

The ROI Of Content

Think about this.

Say you write up a 1,500 word piece of content. You've targeted a phrase that, overall, pulls in 50,000 searches a month. Say that content brings in 1,000 unique visitors a month to your site.

Display Ad ROI

If you've monetized with display ads- let's say you're getting a CPM of $25, that single post will be earn you $25 a month passive income.

Most likely in perpetuity.

Now, just imagine write up 100 more of those posts and you get similar site visits- that's $2,500 a month!

Affiliate ROI

Plus- you can get an even higher ROI, in many cases, with affiliate marketing. Say the content you've created pulls in qualified buyers for a particular product.

Let's say that product sells on Amazon for $100 and pays you a 4% commission for anyone that buys it.

If 10% (100) of your users every month click on the affiliate link and 10% (10) of those purchase the product, generating $1,000 in revenue for Amazon, you're getting 4% of that, which is $40.

But you can promote products that are $200,which would mean $200 a month.

And on and on.

Plus, with Amazon, they will attribute commissions on any purchase a user you refer makes within 24 hours.

This means that even if they don't purchase the "cat hair brush" you recommended, maybe they buy that 4k television they've been ogling for a year now and you rake in commissions for a really expensive product.

So, think about it.

Let's say you outsourced this piece of content and it cost you $20. For an entire year it's bringing in $40 a month. That's an ROI of 1,820.00%.

Why Bother With Display Ads?

You might be wondering- why even bother with display ads if affiliate marketing can usually earn you more money on a CPM basis? 

Because there are many searches online that are purely informational. Compare a search like "how to brush a cat" with a search like "best cat brushes".

4 Mistakes You Might Make When Brushing Your Cat – Petful

Even though grooming sounds simple enough, it actually carries some risks for your cat (and you). Brushing your cat regularly is an often overlooked but important task. Regular brushing not only keeps fur from getting tangled and matted but also encourages good circulation and allows you to inspect for any issues such as fleas, worms or injuries.

The former is an informational search while the latter is a buyer, or product-focused, query.

The way internet marketers monetize these searches is by using display ads on informational content and affiliate marketing on buyer-intent searches.

You can monetize either- but if you're trying to force people to buy a cat brush when they just want to learn how to brush, you won't be as successful.

This demonstrates how to make your money work for you.

When you start out, maybe it's just a side income. But, once you get a taste for it, and sense how this opportunity can scale, you should be off to the races.

I was when I first discovered it.

I remember the first affiliate commission I ever earned.

It began me on this fascinating and rewarding journey of making money online with residual income.

I was at work at the time. I ran into the bathroom and celebrated like a madman. It was all the proof I needed- I knew that if I could make one sale, I could make thousands, even millions!

Whether you just want to increase your current income with a lucrative side project or you have grand ambitions of making $500, a $1,000, or more a day, it is possible, but it will take a lot of work.

Site Examples

Below I provided a pair of example sites. In a lot of ways, any site that's making any money online is generating a passive income

In the sense that they're not actively involved 1-on-1 with a web browser facilitating ad clicks or affiliate conversions.

Sure, when it comes to eCommerce, there's a lot more work that needs to be done. For instance, if you're selling a service, you actually have to provide the service once it's purchased. 

If you're shipping a product, there can be a lot of administrative and customer support responsibilities. Why even bother with eCommerce? Well, the margins are much, much bigger than what you'll experience with either display advertisements or affiliate marketing

And one of the key aspects here- it's easier to buy traffic and scale your operation up into something massive.

Passive Income Affiliate Example

One of the biggest passive income Amazon affiliate sites is TheWireCutter. It was so successful that the New York Times purchased them several years ago for over 30 million (Source).

Wirecutter

by Lesley Stockton, Michael Sullivan, Tim Heffernan, and Séamus Bellamy After testing more than 90 tools from spatulas to tongs to grill gloves and more, have recommendations for everything you need to have an amazing barbecue.

This site exemplifies the passive income fallacy- it's an ultra high-end website that rakes in 'passive income'.

But they work hard for the money. 

They actually buy the products they review, rigorously test them, and produce detailed content with custom graphics.

So, yes, while the ownership sleeps, they're raking in clicks from all over the world.

They're receiving a constant flow of automated income from the traffic they push to affiliate partners like Amazon, Jet, Walmart, Wayfair, etc.  

It boils down to: once you have traffic, income becomes automated. But you need to work to get traffic!

Passive Income Display Ad Example

If you're interested in making money online with display advertisements, here's a case study I did of a site in the mobile gaming niche: 

How To Play Candy Crush For A Living – Niche Facts

If you grew up obsessed with playing video games, you probably entertained fantasies of doing it professionally. Maybe you dreamt of becoming a professional video game tester? Maybe a developer, an e-sports superstar or even YouTube gamer? Most likely you never did any of those things and you’re currently sitting in a cubicle day-dreaming how you can make a living playing Candy Crush.

While not as well known as TheWireCutter, this particular site rakes in tons of organic traffic from obscure Candy Crush searches. 

They produce level guides to help people beat the game and insert display ads into the written and video content.

Passive Income Ideas

This is my favorite part.

Below, I've linked to some of my recent niche site case studies

These case studies analyze different niches you can build a 5, 6, or 7-figure website around.

Alternatively- you can re-frame the goal to a daily goal, like making $50, $100, $500 a day online.

Whether it's building out a listicle-style site or starting a site based on tea, there's a lot of interesting options to explore.

Final Thoughts

Whether you're an artist, doctor, developer, creative, student, recently retired or just a teenager- what's amazing is that this strategy doesn't discriminate. 

If you're looking for cash generating opportunities, the traffic is up for grabs- and cost of entry is content/hosting. 

While it's not easy building passive income, generating a viable second income stream is a great place to start before transitioning to the life of a full-time online marketer.

Ryan Nelson
 

​Ryan Nelson is a NYC-based Industrial-Organizational Psychologist and a full-stack online marketer. He created NicheFacts.com to help people discover and build profitable, content-focused online businesses.

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