3 of My Favorite Online Income Sources
Success in your work from home business means diversifying your income sources to smooth out freelancing work
One income source has been by far the most popular I’ve seen for starting a work from home business. Few other sources of online income pay as well as contracting your talents out on a pay-per-service basis.
Most of the bloggers I know make more freelancing than from their blog or did so in the first few years of blogging.
That’s why I loved reading a recent article about taking that next step freelancing to replace your day job. Getting the math right is something most freelancers don’t think about but crucial to understanding how much you need to earn on a regular basis.
While success in making your work from home business is about getting the math right, there is a way to help the numbers come out the way you want.
Freelancing may be one of the largest sources of income for new bloggers but making sure you have monthly cash flow means diversifying your income sources.
Freelancing clients come and go. Work load changes and it can sometimes take months to get paid. Making even a few hundred a month from a few different sources will help smooth out the ups-and-downs of contract work.
I make money regularly on seven different income sources. Some are fairly passive while others are more like a business. My three favorite online income sources will not only help protect you from gaps in freelancing income but grow your online assets and someday quit working altogether.
Building an Online Asset with Blogging
I’ve owned five blogs since 2014 and have built my blogging income to just under $6,000 a month including associated income sources. It didn’t happen overnight though and that’s why freelancing is such a great compliment to developing your virtual property.
I made just $7,000 in my first year of blogging but grew that to over $67,000 in the last twelve months. That includes money from affiliates, self-publishing, sponsors and advertising.
While freelancing offers an immediate payoff, you’ll always be looking for that next client or working for the ones you have. Blogging is a job and sometimes a lot of hard work but it can develop into an asset that continuously makes money whether you work or not.
Focus on these three blogging income sources to get started:
- Advertising is simply placing ad boxes on your site from either Google Adsense or an ad network. I’m not a huge fan of these because you get so little, about $1 per click, but it’s a quick and easy source of income for most bloggers.
- Affiliate marketing is when you talk about a product or service, link to it and then get a commission when a reader makes a purchase. It’s like advertising but you only get paid with that purchase action or some kind of sign-up. That means you might not get as many payouts but they will be much larger, in the range of $25 to $150 per commission.
- Sponsored Posts is where a company or marketing group pays you to post an article on your blog either reviewing their product or referring to it as a solution. You’ll get spam emails daily asking to pay you $25 for these but even new blogs should be able to get $100 or more for a post.
My Favorite Passive Income Source
I didn’t include self-publishing in the list of income sources above only because it deserves its own section. If you get ONE THING from this post, make it this…
You need to start self-publishing!
I’ve published 10 books since 2015 and averaged $1,836 a month last year. That’s about a third of my online income but more importantly, self-publishing is almost completely passive. Once you’ve published your book, all it takes is about $20 a month advertising on Amazon to create a passive income stream.
Self-publishing is a natural fit for bloggers because you’re already creating content around a topic. It takes very little additional work to repurpose that content into a book to publish on Amazon Kindle, paperback and as an audiobook on Audible.
Use this self-publishing strategy to create your next ebook:
- Brainstorm your topic and what transformation you want to create in readers. Work backwards from the transformation to highlight key steps that will become your chapters.
- Research published books on Amazon for things you should include and what else you can add. Check out reader reviews for ideas that readers want to see.
- Outline each chapter and write one a week as a blog post.
- When all your chapters are done, add a little extra and reformat it for publication.
- By the time your book is published, your individual posts should be drawing targeted traffic from Google. Add a callout and a link to your Amazon page for an instant marketing channel.
You can create a Kindle version and a print-on-demand paperback with the same format. Consider creating an audio version of the book as well to reach a wider audience.
Cash Flow Investing to Smooth Out Business Income
While self-publishing is a great passive income source once you’ve published, it can be a lot of work putting everything together. Blogging is a solid income source as well but even more work, at least for a few years until you start building traffic.
Using these income sources along with your freelancing business means you won’t have a lot of free-time so my next favorite income source is more passive, through investments.
These cash flow investments might not return as much unless you have a huge amount invested but the monthly cash they provide can help pay the bills while you build your other businesses. Even starting investing with a little money can help fill the gap left by volatile income sources.
- Dividend stocks are the go-to cash flow investments but generally only provide 2% to 4% on an annual basis. Look for stocks of utility companies and in the telecom sector.
- Real estate crowdfunding has become a great alternative to buying property directly. You can invest as little as $1,000 in each property on most platforms and get professional management without the headaches of rental property. Returns can be as high as stocks and projects generally last from three- to five-years.
- I’ve been investing in peer-to-peer loans on Lending Club for the last few years and have averaged a return just under 10% annually. Since loans pay principal and interest every month, it can be a great source for monthly cash flow but growing your portfolio will require reinvesting the cash when you don’t need it.
Just like any business, it’s best not to put all your income ‘eggs’ in one basket. Freelancing is a great way to turn your side hustle into a full-time work from home business but make sure you diversify your income sources to smooth out your budget. Combining a few active sources of income like blogging with passive income sources like self-publishing and investing will help make the math work out and grow your business.
Joseph Hogue worked as an equity analyst and an economist before realizing being rich is no substitute for being happy. He now runs five websites in the personal finance and crowdfunding niche, makes more money than he ever did at a 9-to-5 job and loves building his work from home business.