The digital nomad lifestyle is driven by dreams of passive income. Working age RVers and globetrotters are often portrayed relaxing on a beach. They’re posing for a selfie presumably making money while they surf, or surf the web. But really, what is passive income anyway? Spoiler alert, passive income really isn’t that passive. Not when you consider how much time is put into developing the content and processes which make it possible.
I’ve always felt this way about passive income. Rene and I dedicate a whole section to describing passive income in our digital nomad handbook, Income Anywhere! In that chapter, I explain how making passive income requires
some a lot of pretty active work. (I’ll provide an overview and examples next.) So, I was surprised and reassured when my new client, writing guru, and editorial hero Nick Wolny shared a similar opinion in his recent newsletter.
Some passive income strategies, such as rental income, require large, upfront investments. Others demand considerable time and energy to get things off the ground. Passive income is not very passive at the start.
Nick wolny – Founder, Campwordsmith.com
Senior nextadvisor Editor, Financial Independence
If you’ve ever seen those photos of vandwellers doing yoga on the beach, you may wonder, what is passive income? And, if you’re asking yourself that, your next question is probably, how can I get some of that? The short answer is, put in the work. To paraphrase a favorite podcast host, to get the results, “you have to do the things.” And this means actively putting in the work, to earn passive income.
But Really, What Is Passive Income?
In our ultimate workamping guide, we specifically discuss Smart Passive Income. We first discovered that term years ago when we started blogging. It was Pat Flynn who inspired us to publish our first e-book, and we’ve been earning passive income ever since. But it’s taken a lot of active work on our part. The term passive income suggests easy income. It’s anything but.
Yes, you can earn money in your sleep. But whatever you did to earn that money took work. To earn passive income you have to put in a lot of work up front. You pave the way by developing the revenue stream. And that effort is anything but passive. I suggest re-framing “passive income” as automated income. The income itself may be passive. But building the automation takes work. Often a lot of work.
So, what is passive income? For an accurate definition I’ll let the experts explain. Nick’s newsletter included a link to this NextAdvisor article about five passive income ideas for making money in 2023. He asks, “How many have you tried?”
Our 4 Out of 5 Passive Income Strategies:
Leverage affiliate links.
Check out some of our Product Reviews
Build a membership site.
Visit the Tripawds Community
Create an online course.
It’s on the list…
Developing all of this “passive income” took time, and a whole lot of active work! But let’s step back a bit. We provide this broad definition of smart passive income in the Self Employment section of our book, Income Anywhere! Though I would argue that all passive income is smart.
In the investment world, passive income is defined as, “earnings an individual derives from some enterprise in which he or she is not actively involved.” In the blogging world, one is very involved in creating the income generating enterprise. That’s the smart part. The passive part is enjoyed when that enterprise continues to earn income without any further interaction, ever again.
Self Employment Section, Income Anywhere!
I would also argue about that “ever again” part. Keeping passive income smart, and continuing to generate income, requires more work. E-books are a perfect example. By the time you’ve recouped your investment of time spent publishing any information product, it’s likely time to revamp the content. Information is readily available and constantly updated everywhere. Your e-books and info products may earn you passive income. But to keep them relevant and beneficial, you must regularly update them. That means putting more work into your passive income.
Believe me, after 15+ years of blogging and self-publishing on the road, we speak from experience here. As a result, this means frequently reviewing old blog posts, polishing content, and updating information. Or, it may mean completely overhauling and relaunching an e-book to earn #1 New Release acclaim.
What Is Passive Income If It Isn’t Very Passive?
In short, passive income is an excellent strategy for anyone on the FIRE path. Uhh…FIRE? If you have to ask, don’t miss Nick’s complete beginner’s guide to Financial Independence, Retire Early (FIRE). For us, it’s another wrench in our toolbox to earn an Income Anywhere! As we mention in the introduction of our book, we learned early on that creating multiple revenue streams was the best way for us to support our nomadic lifestyle. Passive income is one of those streams. Well, a few actually considering our different niches. But they all started out as a babbling little brooks.
How did we do it? We put lots of irons in the fire. Then, we blew on the ones that glowed the hottest. Some faded away to ash rather quickly. Meanwhile we focused our energy on those smart passive income streams and side hustles that proved most promising. And we paid most attention to those which fulfilled our purpose and fueled our passion.
What Is Passive Income? More Personal Examples
We share the following examples of passive income in the blogging for profit section of our self-employment chapter of Income Anywhere!
Pillar Articles: We spent hours writing our Live Work Dream Pillar Posts. We monetized the articles by researching helpful relevant affiliate ads and cross-promotional links to include. Since publishing the articles, we can continue to enjoy passive income from anyone who clicks
Product Reviews: Some of our best income generating evergreen content are Jim’s series of RV maintenance posts and the many product reviews we’ve published at Live Work Dream. With step-by-step instructions and plenty of photos or video, these articles provide helpful information to our readers. They include specific product recommendations, installation and usage tips. By targeting effective, specific keyphrases to get found online, and using affiliate links for product sales, these articles generate ongoing passive income.
E-books: We spent nearly a year developing our first niche e-book for the Tripawds community, Three Legs and A Spare. By completely automating the book’s fulfillment process, we earn passive income with every purchase. And we have since published four more in our series of pet amputation recovery and care handbooks.
Excerpts from Income Anywhere!
And there you have it, yet another example of passive income. So, don’t ask yourself, “What is passive income?” Instead, ask yourself what work can I do to enjoy some passive income – until I have to put in some more work keeping it relevant. I’ll leave you with a few more words of wisdom from our Smart Passive income guru…
Where a lot of people mess up [in attempting to create passive income] is they try to build a business or create a product that serves everybody, and by trying to serve everybody, you serve nobody. You have to specialize and niche down and find a market with a pain point that you, based on your experience, based on your education and based on your passion, can help.
As Pat says, “The riches are in the niches!” For complete details about building your own niche enterprise, grab your favorite format for Income Anywhere!