Passive income – is it all it’s cracked up to be?
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I’ve received some emails lately and had a couple of discussions with clients on setting up passive income so they only have to work a couple of hours a week. This is a topic that seems to keep rearing it’s head, and there’s a lot of myths, rumours and some truths floating around on what passive income is and what it does.
What is passive income
It’s where you create a product once and sell it forever. Set it up on your website with your shopping cart and people buy it from you without you having to do any more work or spend any further time on it in the future.
Ebooks, e-courses, recordings, reports – they’re all forms of products that lend themselves well to passive income.
Affiliate sales is another form of passive income, however in this post I’m focussing just on the sale of information products as passive income.
What makes passive income passive?
Think Tim Ferriss and his Four Hour Work Week – he recommends outsourcing everything in your business to India, setting up some streams of passive income and living happily ever after without having to do any work.
It’s a great theory, and very attractive at that, after all, who doesn’t want to have money coming in with no effort? But when you really start looking at what’s involved in so-called ‘Passive Income’ it’s not the mecca of riches that it’s purported to be.
Yes, it works to a certain point. But not as well as the get-rich-quick guru’s would have you believe.
It’s not really passive
You’re going to put a lot of work into the product to begin with. A good product that will sell over time isn’t going to be thrown together as fast as a blog post. Nor is it something that you can hand off to a VA or copywriter to produce 100% for you. YOU are going to have to put time, effort, hours, blood, sweat and tears into creating a kick-ass product.
You’ve got to promote it. Sure, there’s the initial launch and promotion that everyone expects to have. But what’s after that? Once you’ve launched it, how do people find out about it afterwards? Google searches and adsense/adwords? Not techniques that I’d want to be relying on exclusively.
Today’s product won’t work tomorrow
Information and products become redundant over time – often a very short time. Technology and knowledge advances and a advice that worked well only a few months ago may now be totally useless. You’re going to have to update your information and products and keep them current. How often you update depends on the product. The point is though; you can’t create a product and expect it to sell long term in a constantly changing world.
If you’re planning to make your main income from passive income then you’ll need to be constantly creating new products to sell and updating older products.
You can’t outsource everything
If you’re in a business for the long term then you’ll have to spend time building your business yourself. You can’t outsource your knowledge and experience. People who buy from you are paying for YOUR knowledge and experience, in a form that they can learn from.
It’s one thing to use a copywriter to turn a ho-hum piece of work into a great selling ebook. It’s quite another to be paying someone from India a pittance to write an ebook for you with information gleaned from a google search.
If you’re looking to build a community, build long term trust and loyal clients who love your product, then you can’t outsource the substance of your work. You’re the one who is going to have to put in the mental effort required to create the products to sell.
So am I for passive income or against it?
Yup, the tone of this post has been fairly negative hasn’t it? Information products as passive income does work, however it’s not a way for you to sit back and take ten months holiday a year while the dollars pour in. Anyone who tells you that it’s that easy is a snake oil salesman.
Heck, I have information products for sale on this site – that’s passive income like I’m talking about in this post. I’ve also got thousands of dollars in information products on my computer and my ipod. I’d be a real hypocrite if I said they didn’t work.
What I am saying is that information products aren’t a get rich quick scheme. It’s a way – and a good one at that – to leverage your work and maximise the return on investment of your time.
If you’re going to do it well though, then you’re going to have to work at it. It’s not set and forget, it’s continually tweak, upgrade, innovate and create.
What do you all think? Do you sell information products? Agree or disagree with what I’ve said? Come and comment and let me know what you think.
Why Info Products cause ‘stuckedness’ and how to get unstucked
Hi, My name is ‘insert your name here’ and I’m an Info product addict
We’ve all done it. Bought great info products – ebooks, audios, pdfs, ecourses etc – that are highly recommended and guaranteed to change our lives and send business through the roof.
We all have our favourite teachers, and if they recommend something as being great then we have to get it, right? Because it will help us grow our business, right? So we buy more products. And more. And we keep on buying. And downloading and saving them to the hard drive.
You know that folder(s) on your hard drive that’s full of ebooks, video’s, downloads, pdf’s etc that you haven’t looked at since the day you bought them? How do you feel when you look at that folder? Guilty? Upset? Overwhelmed? Waste of money?
Yeah, all of those feelings, right? Let me tell you a secret – you’re not alone. Really. Many, many people have a stash of info products and have never looked at them. I’m not going to tell you how much I’ve paid over the years for courses that I’ve never started, let alone finished. And hopefully my hubby won’t ask either…. I used to be as guilty as anyone else on this one.
There ain’t no magic bullet
People buy information products in the hope that ‘this one’ will be the magic bullet that rockets them to instant stardom, money and orders pouring in, clients on waiting lists, kudos on the ‘net. And it doesn’t happen.
No product is going to do this for your business. None. Not any. Because all those info products, they’re just tools. You have to use them, and use them in the right way.
So why buy information products?
Because they’re useful and will really help you grow your business. If you use them properly. The problem is that people often don’t use them properly, if at all. They download them, save them, and plan to get to them soon. Unfortunately ‘soon’ never arrives, the novelty fades and the lonely product sits there unused.
So you get stuck into them and start reading
Learning is good, yes? The more you learn the better you’ll be at running your business, yes? Sorry, but the answer to that is often a no.
Too much information is nearly as bad as no information. When you do decide to get stuck in and work through the courses and ebooks you end up with a head full of ideas and no place to start.
Information overload is very real and paralysing. When you’ve got a head full of ideas all bouncing around, and more information being packed in on top, it’s like being in a room crammed full of people all talking at the top of their voices.
Step outside with me
It’s time to get out of the room.
Turn off the noise.
Focus on just one thing.
Realise there is no magic bullet.
The answer to information overload is…
Taking action.
Give your mind a break – chances are that you’ve already read enough ebooks and know what you need to know. See, we get so caught up in ‘learning’ that we stop ‘doing’. We think we have to do things perfectly, and know everything about it, before we can start.
It’s true that we do need to have a certain level of knowledge in order to run a business. It becomes a problem when we think that we have to know everything in order to run a business.
Focus on one thing and put it into action
So here you are – you’ve got a stack of info products, all useful, all highly recommended, and I’ve just told you to stop reading them. Here’s what you need to do to break out of the information overload and get your head right.
Firstly do a brain dump. Every idea, every thought about your business, get it out of your head. Write down the ideas. Paper or on the computer, doesn’t matter. Mind map if it helps. Just get them out of your head. Then save it somewhere so you can find it later.
Back to the information products.
Pick one. Just one. And work through it – do all the exercises or worksheets as you go. Apply every technique in it to your business. Set aside an hour a day to do this. It’s not a race, take your time.
When you’re finished with the first info product, take a break for a couple of days. Then pick another one and work through it the same way. Every exercise, every technique. Rinse and repeat.
Still don’t know where to start?
If you really can’t pick just one info product or you don’t know what you’re trying to do, I recommend starting with our Quick’n’Dirty Business Plan ebook.
Writing out a business plan will give clarity and direction – and from there you’ll have a better idea of what you need to do for your business.
Leave a comment and tell me what you decide to work on and how you’re going, ok?
The 70% Principle: Why You Never Get Projects Off The Ground
Today’s post is reprinted with permission from Psychotactics by Sean D’Souza. This particular article is one I keep coming back to, otherwise I’d be rewriting, re-recording and editing for ever. Enjoy!
The 70% Principle
Have you got eleven seconds to learn a simple principle? A principle that will radically change the way you do things?
You do, don’t you?
Ok, tick, tick, tick….here’s the principle.
It’s called..um…the 70% Principle
So what’s the 70% Principle?
If a job is worth doing, it’s worth doing 70% right.
You can always come back to do the 20% later.
Yes, read it again, and no, the math isn’t wrong.
If you’re going to build a website, a 70% effort is fine.
If you’re going to do a presentation a 70% effort is fine.
If you’re going to bake a cake, for that matter…do you need all the ingredients?
The perfect cake? With all the perfecto ingredients? Or the cake with ’70%’ of the ingredients?
The ‘perfect’ wording on a website? Or the ’70% perfect’ wording on the website?
And nope this isn’t a case for mediocrity
No one is telling you to do crappy stuff. No one’s saying that you need to keep your project unfinished. But in the quest for perfection, most of us never start.
The 70% principle is about getting your best effort out and into the hands of your clients. That you don’t need to start off with a 100%-kaboom-wow-start.
So let’s tell you about our ‘who pushed me?’ start in 2002
We started Psychotactics,in the year 2002, with a 16 page booklet. We called it the ‘Brain Audit.’ And indeedy-doo, it started with just 16 pages. Those 16 pages, we cheekily sold for $20 or thereabouts.
And you know what?
We weren’t trying to keep the pages down to 16 pages, but we certainly weren’t trying to pad up the contents of the book either.
The 16 pages of information were all we knew at the time. And yes, we could have made it 100% perfect, but decided to put our 70% effort out anyyay.
Did I say, put it out? I meant, I got ‘pushed’
You see, I wasn’t keen to sell the Brain Audit. I wanted to get the e-book just right. But I was forced into putting it on the market.
I was forced to putting it on a sales page, by another marketer who promised to promote the book to his audience.
And he never did promote the book
I reminded him. Gently. Then became a bit of a nag. But that promotion never, ever happened. What did happen was that the ‘Brain Audit’ began to sell.
And as it turned out, I was able to add the next 20%,
and the next 20%, and the next 20%.
And yes, the math still adds up
Because all along, that ‘so-called incomplete’ product was selling. And when you think about it, which product or service of yours is ever complete?
As your knowledge grows; as your customers ask more questions; as you apply the concepts in different ways, your product or service gets better all the time.
And today, the Brain Audit is a comprehensive document that not only helps you understand how the customer thinks, but is also the basis for being a member of 5000bc; for doing any of our courses like the copywriting course, product-creation course.
What started out as a ‘who pushed me?’ product, now helps us get thousands of customers. And helps us grow our business considerably from year to year.
Kinda like the iPod, you see
When the iPod came out at first, it was just 10GB (yeah, pathetic ten gigs).
Then it went up to 30GB. And hey, we got video too. Then whoopsy-doo, it was 60GB. And uppity up it keeps going, both in size, features and ease of use.
Where’s the market for the perfect iPod?
There’s no market for the perfect product or service. The product or service that your customers want, is the product or service you have now.
That 70%-perfect product/service, will do fine for your customer.
How can I be so sure?
Could this article have been at least 30% better?
Couldn’t I have found more examples? More case-studies? Put in more details, perhaps? Tweaked my words just so to make it richer, more vibrant?
Sure I could. But you’ve got the point, right?
If a job is worth doing, it’s worth doing 70% right. You can always fix the 20% later.
©2001-2010 Psychotactics Ltd. All Rights Reserved.
Article written by Sean D’Souza.
Wouldn’t you love to stumble upon a secret library of small business ideas. Find simple, yet electrifying ideas,on website strategy, marketing strategies, copywriting, public speaking, article marketing, sales conversion, psychological tactics and branding. Head down to http://www.psychotactics.com today and judge for yourself.
Imagine Slowing Down and Getting More Done
This is something I’ve struggled with for a long time; obviously I’m a slow learner because the benefits of slowing down have been pointed out to me time and time again. I even wrote a post that touched on this earlier this year. So what is it that I’m struggling with? It’s the fact that when I slow down I get more done yet so often I fail to remember this and keep pushing to work longer and harder.
How does slowing down help you work better?
Not only am I more productive when I slow down – I finish my work faster – I’m also a lot more creative. You see, creativity doesn’t happen in a vacuum. There needs to be life and activity to spark inspiration and creativity. However at the other end of the scale creativity doesn’t happen when your head is full of ideas, thoughts, things to do and remember, all bouncing around together and crammed in, overloaded.
You need to take time out for thinking, allow time for your thoughts to marinate, develop and mature. Your subconscious mind works in the background, constantly. However when you try and cram too many ideas in then it has to keep working on new ideas before the previous ideas are fully explored.
Allowing your subconscious to work effectively
British psychologist and author Guy Claxton wrote in his book “Hare Brain, Tortoise Mind. Why Intelligence Increases When You Think Less” that most of our everyday intelligence “belongs not to the screen of consciousness but to the invisible ‘motherboard’ behind it”. He talks about giving our brains time to pause, for our subconscious to ‘connect the dots’ and bring good, workable ideas to wholeness and fruition.
How often have you been doing something such as walking, housework, listening to music and you’ve suddenly had a brilliant ‘Aha!’ moment? An idea that bursts full-bodied into your mind? Inspiration that initiates an outpouring of a full-grown plan for growth, or the answer to a troubling problem?
That’s your subconscious at work, doing what it does best. Your subconscious loves structure and a dependable routing. It’s at it’s most creative when it knows when to work and on what.
Scheduling inspiration
The famous playwright and novelist Somerset Maughan said “I write only when inspiration strikes. Fortunately it strikes every morning at nine o’clock sharp”. His habit of sitting down to write at 9.00am every morning allowed his subconscious to prepare and be ready to produce ideas as soon as he sat. Do you do the same?
How many of us scorn routine as being a straitjacket that reduces creativity? How often do you brush off suggestions of writing out plans and ideas because it will take away the ‘inspiration’? What if these things actually enabled you to get more done and come up with better ideas? What then?
Take the Challenge… I dare you!
Here’s a challenge for you, should you choose to accept it (and I hope you will). Pick something you’ve been thinking about doing or developing lately but have felt stuck on. Write it down, and then write down any suggestions, comments or anything relevant to it that you may have thought of. Then leave it. Give it a few hours and go for a walk. Take some time over the next day or two to slow down, smell the roses, walk in the rain (if you’re lucky enough to have some) and just take time to allow your brain to slow down.
Keep jotting down any ideas that come to you. Schedule a time to come back to your idea and work on it. When that time comes, take out your paper or computer doc and see what comes out for that idea that you wrote down.
And let me know how you go with it. 
Are you working in Isolation?
I feel so alone
At some point, pretty much every single one of my coaching client says “I feel so alone”. This aloneness, this isolation, takes a few different forms but comes down to two different causes:
You’re trying to run your business all by yourself;
You alone.
You have no one to bounce ideas off and synergise with.
Brainstorming isn’t effective when it’s just you.
You’re trying to do every single task yourself, from your core business that only you can do to your bookkeeping to your filing. Every single task.
It’s easy to get stuck in a business problem and be unable to get your head around a solution
Or
You’re not looking after yourself
You’re always working, not taking time off for your kids or partner. You know you should, but there’s so much work to be done!
You’re a single parent, which means you’re mum, dad, breadwinner, business owner, everything. The last person you have time to look after is yourself.
You’re trying to look after young children and run a business at the same time. This is why you started a home based business, right? So you could be home and look after the kids and still contribute to the family budget.
Feeling guilty about taking time off when you ‘should’ be working. There’s work to be done, and you’re the one who has to do it. How can you take a break when you can see what you need to be doing?
When you’re trying to run your business all by yourself
If you’re in the first group then the solution is relatively easy. Do any or all of the following:
Get a Business Coach.
Join a Coaching Group.
Find an online Business forum, such as Business Mums Network.
Look for someone in your industry who is willing to mentor you.
Hire a real life assistant or a VA.
Take a break to clear your head.
Become part of an online group of work at home mums, such as Mom Entrepreneurs on google groups.
When you’re not looking after yourself
Getting out from the thought patterns of the second group can be a little harder, because the best answer is to get out of the house and around other people. That takes time and effort, also it’s time away from your business. And it’s the best thing you can do for yourself.
Where do you find the time? Something has to give, and it’s better if it’s some part of your business rather than your sanity or family. So, decide what HAS to be done by you and do it.
Streamline everything you can.
Outsource where possible.
Look for faster ways to do things.
Become more organised and streamlined in your working.
‘Batch’ your work – do emails twice a day, paperwork once a day/week, group like tasks together.
But doesn’t that take time to set up?
Yes, all of this takes time initially. You have to invest that time in order to free up time. Any task we do will expand to fill the time we have. If you have only one hour to do something that normally takes two, then you’re likely to work your butt off and get it done – in one hour.
Give yourself time off and hold that time sacred. Take time out for yourself. It doesn’t have to be a day at the spa, it doesn’t have to cost anything in money. Go for a walk or a bike ride. Leave the kids with your partner or a babysitter for a couple of hours. Bake cookies and catch up with girlfriends at someone’s house.
Make a connection
As human beings we’re designed for connectedness. We were never intended to live and work in isolation, our psyches aren’t designed to work best alone. No matter what some people will say, we ALL work better when we’re connected to others, be that on a business or personal level.
As women especially, we’re designed to congregate and socialise. Whether that’s talking with other mums about your business or your child’s latest toilet training accident, we all need and crave that connection. Denying that need starves you of emotional oxygen and slows you down.
Go out. Make a connection. Grow. Work well and profitably.
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The web's business planning expert - just for work at home mums. Together we'll find the time for you to make money.