Imaginative title, right? I bet you’ve never read anything with a headline like that before.
I kid. However, what I have to say here will share very little in common with those articles.
Unfortunately, I am not here to show you how you can create a passive income in three easy steps and just a few weeks. Sorry. That aint my bag, baby. When it comes to passive income, success is usually borne out of months (or years) of trial and error.
If you are a regular reader of the blog, you will know that I am a big fan of the concept of passive income. It is something that I am striving hard to create for myself. However, I also happen to be quitting my job in about a month’s time, so the need to generate an immediate income is rather pressing.
And that is what I am here to talk about today. How to generate a non-speculative income, in the short term, and on an ongoing basis. And furthermore, how doing that can ultimately lead to your passive income dream (as long as it isn’t wildly unrealistic).
Find Your Asset
The key is in finding your asset. I strongly believe that almost everyone has a particular skill or talent that is valued by others. It may not in fact be anything you consider particularly impressive. For instance, I have always considered myself a decent writer, but until recently, had never considered it something that I could actually make a living out of.
But don’t let me lead you down the writing path. A freelance career can take multiple forms:
- Web design
- Graphic design
- Social media
- Music production
That is a very brief list, which could in reality be very, very long. It is truly amazing how people can leverage seemingly prosaic talents and turn them into viable businesses. We live in an age where that is more achievable than ever.
Keep It Simple and Non-Speculative
I should make something clear at this point – I am not proposing that you establish a business whereby you sell a service direct to the masses. That in itself is a highly speculative venture (although not one that you should necessarily avoid in the long term). I am talking about having a skill that is in demand, and that people will pay you for, on an ongoing basis. If your initial endeavors are successful, the next natural step is trying to exploit that same skill through some sort of service provision.
For instance, if you are a good graphic designer, you can look to get some regular paying jobs with design companies that perhaps have more work than their fixed staff can handle. In time, you can generate a healthy income from this, and produce your own video course and accompanying resource pack, entitled “How To Find High-Paying Design Jobs”. That in itself could become a source of passive income.
Finding your asset and figuring out how you can monetize it can be more than just a step towards leaving work behind. It can be the step.
I am not saying that what you do now has to shape your whole future. That’s the beauty of working for yourself. You can freelance for six months, and if it isn’t working out for you, you can look to step into something else. You can reduce your hours down in order to give yourself more time to focus on more speculative business ideas. You can afford yourself the kind of flexibility that a “normal” job would rarely give you.
In short – you are in control of your destiny. Once you have set up a basic means of generating an income on an ongoing basis, you can then customize your workload as much as your bottom line permits.
Not only can freelance work present you with a viable means of quitting your job right now, it can also give you the flexibility of time to accelerate your speculative business endeavors far beyond the rate at which you are currently going.
Can anyone say “winning”?
So What Now?
In this article, I am stripping the process right back to bare bones. In the future, I plan to go into more detail as to how you can accomplish each step. Having said that, I know that you don’t need me to hold your hand. I know that you are fully capable of using your own initiative to figure out these steps on your own.
1. Assess Your Talents
In a nutshell – what are you good at? You should list absolutely everything – regardless of how trivial it may seem. Your most “trivial” skill may in fact be the most commercially appealing. I didn’t give my writing skills a second thought, but I can actually leverage them to produce a full time income.
2. Consider Monetization
Now that you have your list of talents, you need to figure out how you might monetize them. As mentioned above, we are not initially talking about speculative business ventures. We are talking about finding people who have an immediate and ongoing need for your talent. Once you have established a base income, you can look to see how you can further exploit your skill for higher rates, or passive income.
A good place to start is online job boards. Although I wouldn’t necessarily recommend it in terms of sourcing work, Craigslist is a great way of finding out what people are in need of. Simply Googling your talents and seeing what comes up is also another great method – after all, if other people are making money in such a way, why can’t you?
This is the true beauty of getting started with freelancing. There’s no sitting around, waiting for your speculative efforts to come off. You source jobs and you start. That represents a very solid step in the right direction.
Isn’t It Just Another Job?
Yes and no. It is another job, in the sense that someone is compensating you for the provision of a service. But it is not “just another job” in the sense that you are in full control of what you do and don’t do. If you want to scale back your freelancing hours so that you can spend more time on your speculative business ventures, you can. And if you want to increase your hours because Christmas is coming up and you could do with some more money, you can do that too.
Not only that, freelance work will set you up with invaluable contacts. If you decide in the future to move on from freelancing, you will come out the other side with a highly-developed skill, a reputation, and a platform with which to base your business upon.
Employment vs. Self-Employment
Advocates of employment will talk about health care, sick pay, and other such things. And they would be right to. But that is all they have. The net upside to self-employment, in my opinion, is huge.
As long as you are employed, you are not in control of your destiny. You may think that if you do well enough, you’ll get a promotion, which will give you x, but there is not guarantee of that. You are, to all intents and purposes, powerless. When it comes to advancing your career, you are fully reliant upon the whims of others.
Self-employment, meanwhile, is all about you. To a far larger degree, you get out of it what you put in. I learnt the hard way that putting all of those extra hours and weekends into your job doesn’t necessarily give you anything extra. Not so with self-employment. If your hourly rate is x and you do more hours, you’ll earn more money. And if you invest your time sensibly into your business, you will see a return.
I’ll throw away the benefits that employment brings in a heartbeat to be in control of my own destiny.
What about you?