Being a freelancer has its benefits, which include being able to work your own hours from any location. This is why more than one-third of the U.S. workforce are freelancers. However, some of the biggest challenges of taking that route have to do with money: the process of fighting to get clients (43.5%) and getting paid on time (40.4%).
Anyone who’s self-employed understands the potential feast-or-famine life they’ve signed up for. One way to counteract this seesaw is by incorporating passive income streams.
3 Ways Freelancers Can Create Passive Income
Creating Digital Products
Creators, such as designers or photographers, can sell, license, or build premade templates that buyers can use for their own projects. In this case, starting your own business to sell your digital assets is a great way to have more control over your product.
Buying a catchy domain is one step. Incorporating search engine optimization (SEO) is essential for better business visibility. If you don’t have the time to do this, you can find SEO specialists on a variety of platforms that you can hire. Make sure to check their client reviews and costs beforehand.
Writing an eBook
During the first quarter of 2021, ebook sales increased by close to 40%. There are plenty of opportunities for authors to thrive. If you have expertise in a subject or have a story that’s dying to come out, consider becoming an author. For those who follow the self-published path, there are numerous eBook templates that will help you get started. Keep in mind that if you publish your book in PDF format, these files can become very large in size. If you begin sending your book out to reviews or selling them yourself, use a free online tool to reduce PDF file size to make it easier to email.
Not only is the affiliate marketing industry growing but there are many lucrative niches you can choose to work with. In fact, you can create a specific site for your product or create a YouTube channel, depending on the product.
Mistakes to Avoid
Freelancers have the ability to build their own passive income businesses if they are smart about it. It’s not enough to just see something that can make money and do it. There are a few cautionary notes to consider:
- Failing to research. Because this is something you’re spending a lot of time on, take the time to research the options. Depending on what you do, there are certain laws and regulations that you may need to educate yourself about.
- Not being realistic. There is a lot of work that goes into building up your passive income. That’s why you need to create a plan. It helps you to work towards achievable milestones that will help you to stay focused.
- Relying on one passive income source. It’s never smart to rely on just one income stream, whether it’s passive or active. This IRS report showed that wealthy individuals relied on several types of passive income streams.
- Failing to register your business. If you decide to grow your freelance gig into a full-blown business, then you need to take steps to register this business with the state. One option is to register as a corporation, which can provide tax advantages and protections that separate your personal finances from that of your business.
Start Building Now
As you continue to build your professional reputation, create other businesses that will contribute to your financial well-being. Take the process of creating your passive income just as seriously as you do working your active one and you will reap the benefits when you’re ready to retire.