When I decided that I was going to quit my job in May 2011, freelance blogging was the last thing on my mind. As is the case with most people, my focus was on creating passive income streams.
Invariably, I failed on that front. After six months of trying and failing, I turned from passive income exploits to freelance blogging — out of sheer frustration more than anything else.
Despite freelance blogging being the reason for me being able to quit my job, I felt for a long time that I’d only carry on with it long enough to get my passive income projects off the ground. My attitude was simple: freelancing was a means to an end — not a long term solution for leaving work behind.
However, my attitude has changed markedly over the past 2 1/2 years. In this post, I want to reveal how freelance blogging has had a more positive impact on my life than almost anything else, and convince you why you should be following in my path.
The Fallacy of Passive Income
Let’s start with one of the most important things you should know about making money online: there is no such thing as “passive” income, and anyone who tells you otherwise is probably trying to sell you something.
“Passive” income implies that you do not have to work for it, when nothing could be further from the truth. In reality, the phrase can only be used in the loosest sense of the term — i.e., you might work very hard up front to produce something that makes money over a period of weeks or months without you having to do too much to sustain that income.
So while the idea of doing no work to make lots of money is an attractive one, it doesn’t exist in the real world. Furthermore, the attraction of spending a great deal of time creating a product that you can then sell in a “passive” manner has been blown way out of proportion.
When it comes to making money, there are only two things you should care about on a fundamental level:
- How much money you make
- How much work you do to make that money
In my opinion, you can throw issues of passive vs. non-passive income out of the window, because there is a much simpler equation: what makes you more money.
For example, let’s say that Joe has a “passive income” business that makes $5,000 per month and he spends (on average) 6 hours per day maintaining it and creating the products that produce the income. Meanwhile, Jenny is a freelancer, makes $80 per hour and works 3 hours per day. Jenny makes more than Joe while working half the time.
Who would you rather be?
Put another way, if you can make more money from a “non-passive” business, why wouldn’t you go down that road? I know the 4-Hour Workweek approach to life as all the rage, but most of us have a desire to work and won’t necessarily be more fulfilled by working less. I think most people end up discovering that it’s more about finding rewarding work than trying to work as little as possible. That’s why Tim Ferriss doesn’t work four hours per week — on the contrary, he probably works harder than you or I.
A lot of people argue that the key to running a successful business is to disconnect yourself from a direct relationship between your time and income. However, unless you hire enough staff to keep your business running without any of your input (which is one hell of a challenge), your income will always be linked to your time input. It’s unavoidable.
My point is this: the sooner you disconnect yourself from the notion that your input should be far removed from your earnings, the better.
Blogging vs. Freelance Blogging
The world of blogging offers countless examples of how many people are completely lost — to their detriment — in a dream of making passive income. I’ll use myself as an example, and more specifically, Leaving Work Behind’s “passive” income generation.
Since launching this blog it has made in the region of $30,000 (including affiliate income and information product sales). In that time I would estimate that I’ve spent approximately 900 hours working on the blog (about an hour every weekday on average since July 2011, which is probably an overly conservative approximation). That gives me an hourly rate of ~$33.
Now consider my freelance blogging career progression. My first gig paid $20 per hour. My second gig, which I landed a couple of months after I started freelancing, paid about $30. In other words, it took me a couple of months of freelance blogging to equal the hourly rate I have achieved after over 2 1/2 years of “passive income” blogging.
But that’s not all. My freelancing rate continued to climb to a high of $161 per hour before I “quit” and moved to the subcontracting business model I currently operate (i.e. I work with a team of writers and operate in an editorial role to ensure that each article is up to scratch before passing it onto the client).
My blog has got a long way to go before my equivalent hourly rate matches my freelance blogging success.
Despite this, people continue blindly pouring hours of time into their blogs. Just imagine if they took that same drive an applied it to a freelance blogging career. It could change their lives.
The Issue of Scalability
I know what you’re thinking though: “freelance blogging doesn’t scale.” Well, I’ve already proven that wrong.
Having established myself as a freelance blogger, in the middle of last year I sidestepped into a subcontracting business model with surprising ease. Just like that, I had created a “passive income” business. My hourly rate went from ~$150 to ~$400 per hour — something that will take me a long time to match through blogging (if I ever do). Not only that, but it’s money in my pocket right now — it’s not money that I can hope to have down the line after countless hours of hard work.
To be honest, writing this article has encouraged me to spend even more time on my writing business. Compared to blogging, it’s a license to print money.
I think a lot of people are put off the notion of freelancing due to its lack of scalability, and while one-man-band freelancing isn’t scalable, such businesses can sidestep into scalable models — just like mine did.
But Freelancing’s No Fun!
I guess this is the most compelling argument for people who turn their noses up at the prospect of freelance blogging. After all, who wants to work for clients? Isn’t that just like having another job?
In short: no. I’ve never felt like that. I’ve only worked with clients I want to work with and I’ve only done work that I want to do. I spent around 18 months freelancing for 2-3 hours per day and earned thousands of dollars per month in the process. It wasn’t a hardship. On the contrary, it enabled me to quit my job and acted as a springboard for just about everything I have achieved so far.
I suppose it’s all a matter of perspective. Freelancers will invariably feel far better about being freelancers if they view their business as a business — not some kind of quasi-employment. Furthermore, I believe that all freelancers should have one eye on the future potential of their business — i.e. leveraging the skills of others and creating a scalable business. That’s where it gets real interesting.
It’s Not All Roses
For those of you who have been convinced by this article that freelance blogging is worth consideration, I do want to make the point that it’s not a cakewalk. You will need to work hard and smart.
So many freelance bloggers ignore what I consider to be the fundamentals of success and thus only ever work with low-paying clients. However, in my experience, the potential rewards are enormous.
I’m not going to turn this into a big sales pitch (yes, I do have a freelance blogging course). If you’re interested in the course, take a look. But what you could also do, totally free, is check out all of the freelance blogging articles I have here on Leaving Work Behind. That will get you going.
If you have any questions, please do not hesitate to get in touch. The best thing to do is leave your question on the freelancing forum here on Leaving Work Behind — that way, you’ll get the benefit of more answers than just mine.
Alternatively, leave your comments and questions below!
Photo Credit: Unhindered by Talent
Hi Tom,
your post came just in the right moment!
I was sitting & thinking about my freelance business & my Blog – questioning everything. Your example – changing roles from Writer to Editor – just gave me the right input on how to carry on and grow.
Thank you!
Best regards
Heike
My pleasure Heike 🙂
Hey Tom,
I’m actually one of those people who wants to do freelance blogging, but I have to say I have difficulties combining it with my blog and my full time job.
I guess the problem lies with what has to get priority over what and when.
One thing: I completely follow you reasoning that your freelance blogging has made you more money per hour than ‘passive income’ has, but wouldn’t you say that the structures of that passive income, most importantly your blog, have supported and pushed forward your freelance career as well?
Of course that isn’t the same as direct income, but it’s nonetheless something to take into consideration.
Cheers:)
I’m glad you make that point Sofie as you are absolutely right. There definitely is crossover there and I probably should have made mention of that in the post. However, by the same token, I wouldn’t have been able to generate so much “passive” income if I hadn’t become a successful freelance blogger! Bit of a chicken and egg thing going on there 🙂
I guess so!
Time for my chicken to start laying eggs… 😀
Tom,
Thanks for presenting a fair and balanced look at this subject. I’m glad you clarified your stance on passive income because I agree with you that completely passive income from online business is blown out or proportion. I read posts about people who essentially have a full-time job working on “passive” income sources, and that just doesn’t make sense. For some reason certain things are often considered passive when they are not.
I did a lot of freelance work (mostly writing/blogging and design) for a few years and I have managed my own sites and blogs for a few years, and I have to say that I don’t share your opinion. For me personally, I never enjoyed freelancing even though I did, for the most part, work with clients of my choice. I’ve had more fun and made much more money working on my own sites and blogs. Although, I never scaled my freelancing like you have by outsourcing the work, so it’s not really the same situation.
Hi Marc,
First of all, thank you for sharing your opinion in such a friendly manner!
Second of all, I completely understand where you’re coming from. One of the reasons I switched from freelancing to outsourcing is because I did feel like I was starting to burn out a little bit. And it’s true to say that I did prefer to write for my own blogs than for clients. I think that is only natural.
But I always used to say to myself, if I’m earning $150 per hour by sitting at a computer and typing, it can’t really be all that bad! Freelancing as a means to kickstarting your “escape” from traditional work and launching you into a world of near-endless possibilities is a fantastic option (and certainly my choice).
Cheers,
Tom
“But I always used to say to myself, if I’m earning $150 per hour by sitting at a computer and typing, it can’t really be all that bad!”
Well said.
Hi Tom,
I agree. “Passive income” is not about working countless hours on a blog. I believe the true “passive income” is earning money from stocks and bonds. And even then, it could be transformed into a job if that’s the only thing you do for a living.
As a freelancer, you work for clients. As a blogger you still have customers, so it’s never about “working for yourself” really. Of course, you have a lot of freedom and that’s the beauty of this.
Nice reading 🙂
You’ve hit the nail on the head with stock and bonds Karen, but like you say, even that can become non-passive!
You also made a great point about your readers being “customers.” It’s absolutely true! I think a lot of startup bloggers lose sight of that — and believe me, I’ve had more negative experiences with readers of my blog than I have with clients. (Fortunately, I’ve had lots of positive experiences too.)
Hi Tom,
thanks for that post. It’s really important to keep the eyes on the earnings-side. After a while you can analyse the income per hour and compare. I think that’s much more important than chasing the dream of passive income. I know there are some good reasons to stay consistently on the ball, but after some period of time you have to analyse and put energy in the business models which will generate a good income-level.
Best regards,
Manuel
Totally agree Manuel. Analysis is something I don’t do enough, and I would encourage anyone to keep qualitative tabs on their progress!
I must have flunked math.
Assume a 20 day work month.
Jenny works 60hrs a month (20 days X 3hr per day) multiplied by $50 per hour (her terrific rate) = $3000 per month.
Joe works 120hrs a month (20 days X 6hr per day) which we are told yields $5000 per month.
Who’s ahead? Yes, Joe worked twice as much…but…….whose income was higher?
I must be missing something.
Thanks for spotting the error Michael — Jenny’s rate should have been $80 (i.e. half of what I earned at my peak).
Thus: (80 * 3 * 5 * 52) / 12 = $5,200
As for whose income is higher, in my opinion, that is far less important than your income per hour worked.
Agreed! And at $42 an hour, Joe does pretty darn great! He’s earning two times the hourly wage of the average Briton! (based on 2012 salary survey from The Guardian)
Hi Tom,
Thanks for a really informative and insightful post. I’m quite proud of the fact that before I even found your blog, I had expanded my freelance writing career to the extent that I could leave my day job and become a full-time freelancer. Then, when I found your blog and started reading, I felt reassured and pleased by my choices as a lot of what you wrote was similar to my own situation.
However, when it comes to this post, I think it was this line that interested me the most: “So many freelance bloggers ignore what I consider to be the fundamentals of success and thus only ever work with low-paying clients.”
This really speaks to me, because I don’t know how to go about raising my hourly rate so I can progress further. Do you have any advice on that?
Yes — plenty! Start by checking out the archives (http://leavingworkbehind.com/tag/freelance-writing/) and come back to me if you have any questions 🙂
Hey Tom, good article as always. However, I have to step in and give my two cents.
You said, “there is no such thing as “passive” income…” toward the beginning of your article. The main confusion with passive income is that people seem to have different definitions for it. Some say that “passive” means not having to lift a finger at all, while others claim that passive is simply income that comes with minimal effort. A third definition is, “Passive income is income that does not require your direct involvement.”
At the end of the day, I agree with all of the above. It IS possible to develop something that requires no effort for months to come, or only minimal effort and/or to receive income with no direct involvement.
—- It all depends on what it is that you do to achieve it. —-
For example, i’m a big fan of Kindle/book publishing, and this is the best “proof” I can give you that passive income actually exists (therefore, effectively busting your aforementioned quote that “there is no such thing as passive income.”)
So, around November 2012 I published a few short books for my dad’s Kindle account, each book taking me only 2 days to write and publish. There was very little effort involved, as they were purely fiction on something I enjoy, therefore there was no prior research done. I practically considered those books more of a hobby. Anyway, fast forward to February 2014, and those books are still selling each and every month. I only lifted my finger for about a week in 2012, and he continues to earn each month.
No promotion, no further editing, no more work involved. Nothing.
The same story goes for another friend or two. One of them outsourced a few short stories and spent around $125 in May 2013. He created quick book covers for each, taking him about 15 minutes per cover while the ghostwriter finished the stories. Out of the $125 and minimal effort involved, to this day he has (so far) earned around $2,200.
No promotion, no further editing, no more work involved. Nothing.
While their income has indeed decreased since those books were first published, this fact alone is irrelevant. The fact still remains that to this day, they are STILL earning — whether it’s $1 per month or $1,000 per month. And that’s what matters — therefore fitting into the various definitions of “passive income” and making the phrase a valid one.
In conclusion, what I believe should be said is that passive income in **RARE**, and I agree that there may not be many sources or opportunities to create it. But let’s keep in mind that “rare” does not mean “impossible” or non-existent.
Thanks!
Elvis
Hey Elvis,
We can go with “rare” if it makes you feel better 🙂
Alternatively, we could take another look at your comment and then my article within the context it was written.
We’re talking about creating income streams that can sustain our outgoings in the long term — that can put roofs over our heads. When I talk about passive income, that’s the kind of outcome I’m talking about.
I have no idea what how much time you took writing those books or how much money they have earned to date, so I can’t really judge that example. So I’ll focus instead on your friend who has earned $2,200 to date from little effort or money. Sounds like an impressive achievement. But what did he do to get to that point? If those books were so successful, why hasn’t he replicated his success? (Perhaps he has tried and not done so well?)
The way the story currently sits, it just doesn’t add up. If you went on to say, “And my friend continued to publish these books every month, taking just a couple of hours, and his income is now $10,000 per month,” I’d admit that true passive income exists in the world of making money online and would want to speak to your friend 🙂
I would hazard a guess that if the full extent of his work was revealed (including his previous and after-the-event efforts that may not have yielded such strong results), his investment would have been more than $125 and a few minutes. Furthermore, while earning $2,200 over nine months is nice enough and could be defined as passive income, $250 a month isn’t going to change anyone’s life.
I have a friend (Steve Scott), who is arguably one of the “gurus” of Kindle publishing. He pulls in five figures a month from his books. I speak with him every week and I know just how much effort he puts into his Kindle publishing business, and I know all too well that it is far from passive!
Anyway — you could call what you’re talking about passive income, but with the greatest of respect (and I do appreciate the point you’re trying to make), I would call it irrelevant for the purposes of this post.
Cheers,
Tom
Ah, I see…
I didn’t quite know that the context of this post was mainly highlighting a *full-time* income passively and otherwise. I apologize.
Generally speaking, however, my pet peeve comes when other people say that passive income does not exist in general — as in, not at all. A mere misconception or fantasy. But In this particular case, my original post doesn’t belong or fit here at all.
Regarding my friend’s ebook earnings, it’s a tragic thing, really. He had no direct knowledge (technical skills) on how to handle this whole ebook business, so I was handling most of it on his behalf, aside from creating the book covers. Sadly he never applied himself to learn, despite the steady income coming in from these books. Given that I usually have my own projects to worry about, eventually the entire production of his books stopped altogether, as I can hardly take care of several people at once. It’s one of those things that happens to us underachievers :p
I do encourage him to learn the ropes and subsequently resume publishing on his own, but people often have a tendency to not take action. I try not to blame him, since most of us can be this way, myself included.
No need to apologize at all Elvis! I appreciate you sharing your thoughts, and I do understand and accept the point you were making.
It’s a shame about your friend, but as you clearly already know, you can’t force him to take action. You can only do so much for people if they’re not willing to take action themselves…
Hi Tom,
A very helpful perspective thanks, and very timely for me.
I’ve always thought the whole ‘passive income’ thing was a bit of a misnomer, especially when it comes to on-line businesses. as someone who has been exploring the concept for myself recently, I realise the sheer amount of effort that building and maintaining that sort of business takes. It’s a bit like overnight success in showbiz – almost always preceded by years of low-pay and hard work.
In the end, as you and others have pointed out, it is far more a case of building a work life that plays to my strengths and passions – in other words doing the things I really like and am good at, which means it may not always feel like work.
Cheers
Giles
That, in a nutshell, is what leaving work behind is all about. Thanks Giles!
Love this. So true about the passive income part not being passive. Anything worth it takes work.
“Anything worth it takes work.” That would be a good mantra for living Daniel 🙂
Quite an interesting take on freelance blogging. A lot of people that want to make money online never gets to understand that freelancing is another profitable way to go. The excuse of lack of scalability really don’t hold water.
After all, just as this post has pointed out, one can build a one-man freelance show into a scalable model.
I think this is a great catch for me because the idea of scalability often clouds the much work that is required for successful freelance business!
I have shared this comment in kingged.com where this post was shared for Internet marketers.
Sunday – Kingged.com contributor
http://kingged.com/the-best-way-to-make-money-blogging-that-youre-ignoring/
Thanks for sharing your persepective on freelance blogging and passive income. I definitely want to be the person that makes more money working less hours.
I have a question in regards to finding blogs that are willing to pay $150 to $400 per hour for you to write for them. Perhaps it is a mental perspective limitation on my part by I find it hard to think someone would pay at that level to write an article for a blog. What type of blogs are you writing for or are you doing something other than writting for a blog.
Thanks for sharing.
Jennifer
Hey Jennifer,
It’s a matter of perspective. It’s not about a client paying you $150 per hour, it’s about the value you are able to provide to them.
For example, if the market rate for a good quality blog post is say $150 and you can write such posts in an hour, your hourly rate will of course be $150.
The first step is not to not quote for work on an hourly basis. Disconnect the client from the hourly rate angle, so that they can focus on the value you offer instead of the time it takes you.
Cheers,
Tom
Great post!
The last few weeks I’ve been trying to get back into passive income money making mode, as opposed to focussing on my freelance writing but this post has put it in perspective.
I don’t share your sentiments about working for clients though, as I still find freelance blogging a job and a bit of a grind, but you can’t really argue with the cold hard figures related to earnings.
I think they should change the name of passive income to delayed income – work today, get paid tomorrow. Rather than work a bit now, get paid forever. Although it will always appeal to me as taking a day off and still earning is a great feeling.
Cheers,
Joe
Hey Joe,
I agree with you man. I think the misconception is that it’s easy to make “passive” income — which it’s not. But I do believe it gets easier after going through the beginning stages.
Cheers!
Warren
Hey Joe,
I love “delayed income” — that’s a perfect definition! And a far more realistic one.
I’m totally on board with the whole taking a day off thing, and in fairness, I now have that, despite having started as a freelancer. So it is possible!
Cheers,
Tom
Tom, it appears that your blog, “leaving Work Behind” makes only moderate money. On the contrary, if you never started this blog, you probably would never have moved so fast into the freelancing business and subcontracting business.
You are like a brick layer that builds a house 1 brick at a time. In short order, you have laid a lot bricks that cannot be tumbled down.
Hey Mark,
That’s the way to go — slowly but surely. Though Tom’s blog doesn’t make the money like the other, larger blogs has, it’s still impressive to see how far he’s gone in just over 2-1/2 years.
Cheers!
Warren
Quite right you are Mark — LWB has definitely helped the growth of my freelancing business. I like a well built house 🙂
Hey Tom,
Great post. Though I agree that it still takes work to create “passive” income, I still believe it wouldn’t take that much work (if any), after you’ve already been established. After that stage, then I would believe my income is “passive”, since I can now do less (or nothing) and still make a profit.
For instance, if I had a digital product for sale in Clickbank, JVZoo, E-junkie, etc., put-forth the initial work on building a strong affiliate base to promote the product for me, then I don’t really have to do much in the future, except ensure they get paid — the workload decreases over time. The same can be said with anyone who has an email list. It doesn’t take much work to send out an email with an affiliate link (especially using an auto-responder) and make money off that list.
Sure, you can make more money by promoting the products yourself as well; but, the goal shouldn’t be about making a lot of money anyway (unless that is someone’s goal) — it should be about making enough to be financially free. Of course, that varies between situations. What do you think?
Cheers,
Warren
Hi Warren,
I think that theory is all very well and good 😉
I have a friend who launched an affiliate product and it did well with very little upkeep for a good couple of years. Then sales declined and slowed to a trickle, due to his neglect. That’s what happens to “passive” income when you don’t work on it.
Cheers,
Tom
Hey Tom,
I really enjoyed this article, as with your others its a very honest approach to pointing out great ways to boost our incomes. As a somewhat new freelancer I’ve come across just about everything out there with regard to ways to make money as a writer. Passive income streams always sounded like that old adage my grandpa used to say “If it sounds too good to be true…” but what do you think about eBooks as a potential passive income?
They sit out there and sell when people want them. When we develop a name and become the authority in the niche we’re writing for more people will find us and trust our brand, then they find our books, and potentially purchase them without us having to do any selling, per se.
I know books take a lot of upfront work to produce but do you think they can be considered a passive income stream once they’re done and listed for sale?
Thanks again, great read!
Hey Jenn,
We could use my guide as an example of that. To keep sales up I need to maintain my blog and write articles specific to the topic. Hardly passive.
If we were to talk about Kindle e-books, I’d refer you to my friend Steve Scott, who is constantly working on new books in order to keep his name out there and improve upon cross-sales, etc.
I’m not saying you shouldn’t do it (far from it) — I’m just saying that as a long term business proposition, it’s not passive.
Cheers,
Tom
Good point about the side work that still needs to be done to sell a book. If we want people to find it constant promotion (even when not promoting) is key. And as you said, not really passive.
Lots to think about, thanks!
My pleasure 🙂
I just want to say Tom, you are amazing….the sincerity with which you write and explain your point, is simply amazing. Many thanks.
Thank you Abhinav, it’s very nice of you to say!
This post really struck a cord with me. I’m just starting my freelance career and I have a full time job plus a family to support. Staying true to the your blogs promise “Leave Work Behind” I believe freelance blogging seems like to best option for starters.
Not everyone wants to dedicate a year in a half to reap the fruitage of their blog labor to get passive income.
Just starting out i don’t mind trading hours and freelance writing in my opinion is the best way to trade hours.
I totally agree with you. Down the line there is always the opportunity to scale or pursue personal projects once your business is set up.
Great Post Tom. Keep it coming with the “Real Talk”
Thanks DeChon, I’ll try my best!
Tom, I am rather late in locating you in the ocean of Internet. Well I am glad you gave so much of inspiration for me to kick start a worthy and genuine writing career. Freelance seems to me the best option. I am fifty four and still struggling in life with a full time low paid job in India with responsibility to support a family of five members. I will subscribe and see your options. Request your guidance if need be. Thanks again Tom.