My plan was to establish one or more semi-passive income streams, most likely in the form of niche and/or authority sites. I spent five months working extremely hard and getting exactly nowhere (the failures of two projects being indicative of my efforts). I was losing money.
But in October, everything changed. I decided to approach my objective from a completely different angle. And three months later, in December 2011, I quit my job — five months ahead of schedule.
I didn’t pull off a miracle — far from it. I just took some very practical and realistic steps in an attempt to achieve my goal. I strongly believe that there is no reason why you can’t do the same, and in this post, I intend to explain how.
The Problem
For the purposes of this post, I am going to imagine that your approach to making money online is very similar to what mine was, going back thirteen months or so. I am making this assumption because it appears to be a very common approach (and one with an extremely high failure rate).
In a nutshell, the reason why you are failing to make a considerable amount of money online is because you are chasing the passive income dream. You’re looking for the big win — a comfortable living with minimal work input. The Four Hour Workweek, or at least something similar.
This dream has been popularized by a number of successful online entrepreneurs such as Pat Flynn and Spencer Hawes. These guys are inspirational, and fill us all with a “we can do it too” attitude. Which is great — but that attitude will only take you so far.
The fact is that building a considerable passive income stream is extremely tough. It requires a lot of patience and persistence. One has to fail great deal on the journey to hitting the winning formula. And it takes time. All of these factors combine to toss most passive income dreamers by the wayside.
I am not saying that passive income is a pipe dream, because it isn’t. After all, I am working on establishing semi-passive income streams with my freelance blogging guide, my authority site project, and this blog. But it takes a lot of time and persistence to get right, and working on passive income projects can be really tough when you have a full time job. It can feel like there aren’t enough hours in the day, and it can be really difficult to see the light at the end of the tunnel (if it actually there).
So what’s the answer?
Sleeping with the Enemy
More specifically, I started freelance blogging. I quickly discovered that it was a potentially lucrative area in which to work, and made the decision to quit my job pretty soon after starting.
As you can see from my income reports summary, I was able to develop a relatively substantial income within a few months, and I have made more than $4,000 from freelance writing in each of the last three months. After tax, that’s about the same as I was paid in my previous job.
And here’s the kicker — I have reached that milestone by working less than half the amount of hours that I did when I was in my job. I spend around 3-4 hours per day working for my freelance clients. That leaves me free and clear to dedicate however many hours I please to my passive income projects.
But It’s Still a Job…Right?
Some people will tell you that freelancing is still like having a job — you’re still working for a “wage”. Well, it’s like no job I’ve ever had. For instance, here are four attributes of freelancing that you can’t typically get from a job:
- No boss
- Flexible hours
- Pick and choose your work
- Pick and choose your working location
- You’re in control of your earnings
I’m not trying to pull the wool over your eyes — freelancing isn’t passive income. Quite the opposite. But it is, in my humble opinion, a far superior alternative to a full time job — not only is your earning potential increased dramatically, but you can afford yourself more time to concentrate on your passive income projects. I don’t know where I would be right now if it weren’t for me finding freelance writing, but I’m extremely happy that I did.
Implementation
You may feel like you don’t have the necessary attributes with which to start freelancing, but let me tell you something — either your boss has got you all wrong, or you can make it work.
Here’s my logic, as first published in Why You Can Quit Your Job Today:
Let’s consider an assessment of your worth. Ultimately, you are employed because your employer profits from you. He assesses your skills and worth, and is happy that the income generated will exceed the cost of employing you. That cost is your wage, taxes, overheads, training, and so on. Why can’t you cut out the middle man and extract that income direct from source?
Let’s look at a simple example. Your basic wage is $25,000 per annum. The employer has to pay additional taxes of $2,500 to the government every year. It will cost $5,000 in total to train you up, which amortized over 5 years employment (which is the company’s average employment period) equals $1,000 p.a. It costs an additional $5,000 p.a. in overheads to simply sit you in your chair. And on top of that, they are in business, so they want to make a profit from your services! So let’s add a 15% profit margin onto the total.
( $25,000 + $2,500 + $1,000 + $5,000 ) * 1.15 = $38,525
I’ve kept this real simple – I haven’t even mentioned health insurance or any other potential perks. Notwithstanding that, your employer hopes to generate an income of $38,525 p.a. with your skills whilst they pay you just $25,000 p.a.
You can draw one of two conclusions from this:
- Your employer is an idiot, and you are not worth the cost
- Your employer is making money out of you that you could ultimately be making for yourself
Everyone has expertise. You probably massively undervalue your own abilities — I know I did. Right up until the point I was making a healthy full time income from freelance writing, I didn’t really believe that I could do so. It just seemed too good to be true.
The key is to find people who are in search of your assets. It can be anything — writing, graphic design, bookkeeping, administration, photography, web design — the list goes on and on. These people will pay you much more than your boss did, because they don’t have to worry about any of the overheads mentioned above (nor a permanent commitment to employ you).
If you are paralyzed by the idea of actually making this happen, start off simple with a freelance broker site like Elance or oDesk (if appropriate). You probably won’t find great paying jobs with your limited experience, but if nothing else it can demonstrate to you that your services are actually worth something.
And as soon as you can, establish a quality online brand (i.e. a blog and social media profiles). In my opinion, this is by far the best way to market yourself.
The Time is Now
In a nutshell, just get yourself out there, and don’t be afraid to start from the bottom and work your way up! For 90% of the passive income dreamers reading this, you can probably be earning more from freelancing within a couple of weeks than you are right now from your passive income projects.
So if you’re in a job that you hate, what is holding you back from dedicating say two (or more) hours per day to building a side income from freelancing work? Because as I have demonstrated, that’s all you need in order to make a genuine attempt to open up a completely new opportunity in life.
From nowhere to quitting your job in 90 days — I have proven that it is possible. I am sure that some of you can easily exceed my achievements too. All it takes is a change of approach and a concerted and practical effort. Why wouldn’t you try this?
Creative Commons image courtesy of snofla