Passive Income 101

Passive income can be a LOT of different things… some that you probably don’t know about. Today, we’re diving into Passive Income 101. What it really is, what types of passive income you can have, who can use passive income, and more!

I’ve seen how passive income has changed my life, clients lives, and my students lives. I want everybody who reads this to have a business that incorporates some aspects of passive income because it gives you freedom. All businesses can use passive income, even if it’s not the main focus of your business. You don’t have to trade very single hour of your life for dollars – I promise.

Passive Income 101

Passive Income 101

If you Google the definition of passive income, you’ll find a TON of different definitions. Even people who teach passive income have different definitions of what it means. There are lots of income streams that a tax professional might consider “passive” that I, personally, don’t.

Listen to this episode of Passive Income Playbook!

Passive Income 101

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To me, passive income is anything that allows you not to put in too much time AFTER the purchase. Passive income is not fully passive… it’s not like you just make money in your sleep. There are things you need to do, strategies you need to implement, and stuff you need to build to make passive income work for you. Once it’s set up, you can put that puppy on autopilot for the most part.

You can see the difference when you think about client-based service work. When you’re working with clients to perform a service, the sale is the easy part and the work comes after the sale. With passive income, the work comes before the sale and the sale is a little harder. Passive income is one to many, rather than one to one.

I’ve done so much client work in the past, and I’ve learned a lot from it. There’s a difference in your brain between doing five hours of work to build something in your own business that you KNOW will make you money in your sleep versus five hours of work for someone else.

That’s not to say service providers are bad or everyone should stop offering services. We need doers, and some people are really called to do service-based work. Even if you don’t want passive income to be your entire business model, you can absolutely incorporate passive income into your business!

Passive income allows you to stop trading hours for dollars. It’s my whole business model, and I get asked all the time how other people can do it, too.

Passive Income 101: Types of Passive Income You Can Incorporate into Your Business

Digital Products

A digital product is a great example of passive income, It’s something you create once and can sell over and over.

A great example in my business are my digital planners. We just finished updating all of the digital planners for 2021. I create the digital planners once a year, and they sell all year long.

Full transparency here – it’s September right now, and I have seen a downtick in digital planner sales since the ones I had available are 2020 planners. But, as soon as the 2021 planners go up, my sales go up. More and more people are discovering digital planners, and I would be dumb not to sell them.

I also have digital workbooks in the shop, like my 100 to Best You workbook all about creating good habits.

If you guys follow Christina Scalera from The Contract Shop, you have another great example. Christina created contract templates for businesses ONCE, and now all she has to do to sell them is focus on driving traffic to her site. That’s exactly what I do with my digital planners.


Affiliates are the most passive form of income I’m going to talk about today. Affiliate relationships allow you to get a commission for directing somebody to somebody else’s product.

You can share links to products that you love on your Instagram story, in your blog, or wherever you have an audience! If you share a link to a phone stand you love, you might make $0.40 if someone clicks and buys it. That type of affiliate marketing doesn’t  make a ton of money, but it adds up!

You can also be an affiliate for other people’s programs. If you’re in the entrepreneur space like I am and you find someone who has a program that would be AMAZING for your audience but doesn’t compete with what you teach, you could be an affiliate for their program. When you promote their product and someone buys it, you make a commission. This tends to be a higher commission than an affiliate link from Amazon.

Usually, you are required to have completed the program yourself before you can affiliate for it, so keep that in mind.

Affiliate income is a great thing to incorporate into your business, no matter the stage of your business. You can start doing it today.

For example, imagine you’re a service provider who designs websites (like I was!). You can sell your clients products through affiliate links in the before and after stages of your web design services. Your client will need hosting services. If you’re an affiliate for SiteGround, recommend it to your client, and let them sign up using your link – bam, you just made $100. Your client needs to buy a domain – if you’re an affiliate for GoDaddy and recommend it, you just made a little bit of money. All of that affiliate income is on top of the service you’re providing!

Content Creation/Ads Revenue

I don’t want to hit content creation as one line item, because content can help you make income with any of these passive income strategies. I specifically want to talk about ads revenue from content.

Google Ads

You can make ad revenue when you place Google Ads (or other ads) on your website and then create content that brings people to your site to then click on these ads. You’ll get paid when people click on the ads on your site.

This used to be a really big thing with blogging, and it still is for some of the larger blogs I read. It’s harder to incorporate with smaller blogs, but it’s doable for sure.

Keep in mind, if you’re creating content on your site to drive people to buy your courses, digital products, or something else from you, you might not want to incorporate ads that will make people click off of your site.


I also can’t not mention YouTube and TikTok here. TikTok just released their paid content creator program, so I’m not sure of their exact guidelines – but I can definitely speak for YouTube.

My YouTube channel is specifically designed to bring people into my ecosystem. It is designed to find people and get them to eventually spend dollar bills with me. My digital planner videos are a great example – people go straight from finding me to buying from me. That bundle of videos have made me more as a whole than I made in my corporate job just by selling my digital products.

YouTube ads are important, too. People are SO USED to seeing ads on YouTube, that if your channel qualifies for monetization, you would be stupid not to monetize it. I don’t have the biggest channel in the world or the biggest view numbers in the world. I have 94,000 subscribers, and I made over $3,000 per month just from the ads revenue on my YouTube channel.

Even if YouTube wasn’t sending leads and making sales for my business (which is crucial), I would be making enough ads money when people watch my videos to make it worth it. Double dip on the money here, folks!

Podcast Ads

Podcast ads are super passive, guys. If you have a monthly sponsor, all you need to do is record an ad one time and then run it on every podcast episode that month. You’re spending just a few minutes to make a month’s worth of ad money!

A lot of these ad revenue streams can “cross-contaminate,” so to speak. In my podcasts, I do ads for my favorite email marketing platform, ConvertKit. In my ad, I refer people to my affiliate link.


People love to debate whether or not courses are really a form of passive income. They definitely fall into my definition of passive income, so I’m including them!

Of all the things that I classify as passive income, courses are probably the least passive. They require the most up front work because you have to create them, market them and launch them. They also require the most work after the sale because sometimes you have to provide live support or manage a Facebook group. Still, it’s the one-to-many model that I classify as passive – you create the course one time and can sell it to as many people as you choose.

There you have it – passive income 101. This is a pretty comprehensive list of the categories of passive income. There are a ton of different ways to incorporate them into your business, and you can start incorporating them TODAY. No matter what your business looks like, passive income can work for you.

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