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Freelancers go into business for themselves for many reasons, but freedom and independence is typically the deciding factor. I mean, what’s better than working out of a laptop on a beach or passive income for freelancers?
How about only working for 10 hours a week? Or what about 5 hours? Maybe even 0 hours?
It sounds like a pipe dream to quit your day job and build a passive income business or make a reliable income without putting your nose to the grindstone. But thanks to the internet, that goal isn’t out of reach. In fact, it’s really smart to create multiple streams of income as a freelancer.
But what is passive income, and what makes it different from active income? How do you make passive income? In this article, we’ll look at ways to make passive income for freelancers.
Generating enough passive income for freelancers doesn’t have to be complicated. If you’re looking to make a bit of extra money on the side, here are 7 ways to do just that.
1. Create a course
As a freelancer, you’re already good at something. After all, you’re selling what you’re good at to your clients. Why not use that knowledge to generate some passive income?
One quick way to capitalize on your knowledge is to create and sell a course. What makes courses such a “passive” income model is you create the course once and then sell it over and over again to students.
Of course, creating a course is one thing, but marketing it is another. If you want to generate hype for your course (and earn a truckload of money in your first month of launch), pre-sell it and create a launch email sequence. Once your course is complete, send review copies to select affiliates.
2. Outsource your client work
If you want to turn your active income stream into a passive one, consider outsourcing client work to someone else. You can hire other freelancers or just find referral partners who you can send business to in exchange for a referral fee.
However, you need to be transparent with your clients if you’re outsourcing your projects to another freelancer or company. This is especially true if you’re handling private client information, such as social security numbers, credit card information, or home addresses.
You’ll also need to ensure your team has the right qualifications for their role. Keep in mind that some clients won’t be comfortable with this arrangement. They may prefer to work directly with you, so give them the option to choose between you or another freelancer.
3. Sell your unused freelance work
Freelancers often make hundreds, even thousands of assets a year. Some of these assets could be sold to other clients, companies, or individuals if they catch someone’s eye.
Designers, for example, can sell unused design assets that were discarded in a prior round of reviews. Writers can sell articles that were discarded or not picked up by publishers. Developers can use portions of unused code from one project in another project.
In most cases, unless you’ve signed a “work for hire” agreement, you technically own all of the intellectual property your client doesn’t end up using.
4. Monetize content
While monetizing content of some kind online isn’t necessarily 100% passive, the passive nature of this income channel can grow over time as your content library grows.
Long after you push publish on a blog post or a YouTube video, advertisers are still willing to pay for exposure through your content and it’s that residual income that is 100% passive.
5. Sell templates and digital products
Digital products, like templates, music, or fonts, are a great way to dabble in passive income as a freelancer.
Digital products only have to be created once to generate a hefty amount of passive income over time. As long as you market the product on your site or social media, your customers will find and buy it, and your website will deliver the file directly to their inbox.
What is passive income for freelancers?
Before we jump in, we need to establish what is and isn’t considered “passive income.” You’ll come to find that passive income isn’t inherently “passive” despite its name!
What is passive income?
Passive income is income that’s generated without a significant time investment once the revenue stream is stable. Passive income for freelancers could include starting a YouTube channel, creating an online course, investing in digital advertising, among other things.
It’s a misconception that passive income streams are 100% hands-off. You still have to make an upfront monetary or time investment to generate passive income. You also need to be skilled in marketing, develop a number of soft skills, and learn how to generate and nurture leads.
What is active income?
In contrast, active income is earned from a time-consuming service, like a full-time or part-time job. Active income is quicker and more consistent than passive income. However, freelancer income, commissions, and tips count as active income, even though they may not be reliable.
3 Bonus tips to start generating passive income now
It can take months to generate enough passive income from your various income streams to live off of, so you’ll need to get started right away. Use these 3 tips to get the ball rolling.
1. Use skills you already have
Successful freelancers already have marketable skills, so all you’ll need to do is think outside of the box. Ask yourself how you can use what you know to create a successful passive income stream. Then, market your products and services to an audience that’s likely to buy them.
For example, if you’re a designer, you already possess enough skills to generate passive income. By staying in the design space, you can leverage your experience to find clients right away. If you start a new career, you’ll have a harder time getting consistent freelance work.
2. Study your competition
Talented marketers sometimes reinvent the wheel, but it’s more profitable to take notes from your competition. That doesn’t mean you should copy them. Instead, examine how they market their products and services to their customers and follow their playbook while adding extra flair.
Don’t forget to pay attention to their customers. The way they interact with a competitive brand can give you insight into how to cater to them. For example, if a landlord in your area isn’t conducting regular maintenance, state you’ll answer repair requests promptly on your ads.
3. Diversify your income streams
Passive income for freelancers involves diversifying your income streams. If you rely on one source of income, you’ll have to scramble to find another job before you eat up your savings. Plus, you’ll have the chance to experiment with multiple income streams before you settle.
From the examples we put on this list to unexplored options, like passive income apps, you’ll never run out of ways to supplement your income. If something doesn’t feel right, you can move on to the next. Eventually, you’ll create 5-10 passive income streams that work for your needs.
How will you generate passive income as a freelancer?
There are so many ways to make money on the internet. Fortunately, generating passive income for freelancers isn’t difficult, as they can use their skills to create incredible things.
However, your current skills don’t limit your ability to diversify your income streams. Just about anyone can invest in real estate, build a dropshipping business, or get cash-back on their purchases. The only true trick of any passive income stream is knowing where to start.
How will you generate passive income? We’d love to know your thoughts in the comments!
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