- Jen Glantz is an entrepreneur who’s tried various side hustles since she was laid off in 2015.
- After testing a few, she learned some valuable lessons she wished she knew before getting started.
- She suggests being prepared to make upfront investments and starting with something in your skillset.
When I got laid off from my full-time job in 2015, I was overcome with fear about how I’d be able to pay my bills without my only source of income. I made a promise to myself that I’d never rely on just one paycheck again.
After I started my own business in the wedding industry and replaced my former income, I started searching for passive-income streams that could help me earn even more every month without having to do much work.
Now, I have more than five streams of passive income at all times that help me earn six-figures a year, including selling online courses, earning money from my high-yield savings account and dividend stocks, and making money from affiliate links I share with my audience.
After testing out many passive-income streams, I’ve learned that making money this way isn’t as easy as I anticipated. Here are the five things nobody tells you about passive income that you should know before you start.
1. Most passive-income streams are not fully passive, especially at first
When I started my research, it seemed like most passive-income streams were too good to be true. I read about people who were making seven figures a year selling online courses or six figures a year dropshipping. I was excited about a few of these options that seemed like they’d bring in decent money without a lot of work.
But when I started selling my own online courses, I realized the amount of time I had to put into this side hustle made it feel like a second full-time job. Not only did I have to spend around four weeks creating the course material, but once the course was ready to be sold, I had to spend anywhere from 10 to 12 hours a week marketing the course to my audience through email, social media, working with affiliates, and more — just to drive a few sales.
Years later, the online courses I’ve created now generate a few hundred dollars a month and only bring in a significant amount of money when a new one is launched, which also takes around 20 to 25 hours of marketing.
Before deciding on a passive-income stream, be sure to research how many hours a week you’ll need to put in to maintain it. If it fits your schedule, it could be worthwhile. If not, try to find an option that takes less time, like doing peer-to-peer lending.
2. You might have to make initial monetary investments to start
A year after getting laid off, I realized a lot of passive-income streams that appealed to me would require capital to get started, from buying a garage space and renting it out to selling products.
While some streams that require an upfront investment could have a faster payout, there’s no guarantee. Instead of risking it, I started off with a few streams that didn’t cost me anything, like earning money through certificates of deposit, and incorporated the ones that did require an investment later on when I was making enough money to risk some of it.
In 2021, I created a card game and started selling it on Amazon. Once the product was made and listed, all I had to do was pack and ship it every time an order was placed. However, to create the first batch of card games, I had to spend over $1,000, and it took me more than a year to make any profit.
When you’re choosing a passive-income stream to go with, first decide how much financial risk you’re willing to take on to get started.
3. To make real money, you’ll need multiple streams
While trying to hit my goal of doubling my former salary, I discovered that a lot of millionaires don’t just rely on one or two streams of income — many have more than five streams of income.
I realized that not only did I need multiple streams, but those streams needed to be different from each other. I started branching out into selling downloadable e-books and investing in crowdfunded real estate. By diversifying, I could start to see which ones were more profitable and consistent, and then prioritize those.
4. Some passive-income streams require a pre-existing foundation
One of my most profitable sources of passive income comes from affiliate links. Using platforms like Amazon’s affiliate marketing program and RewardStyle, I generate a unique link for products I like. When someone clicks that link and makes a purchase, I earn a percentage of the sale, which adds up to anywhere from a few hundred to a thousand dollars a month.
But it’s not as easy or passive as it seems. A contributing factor to this income is my large audience of 100,000 followers across my social-media platforms and 100,000 subscribers across my newsletter and podcast platforms, which took me almost 10 years to build.
If you choose to pursue this income stream, how much money you can make will be determined by the size of your audience. When looking into passive-income streams, determine what you already need to have in place to be successful.
5. Start with a passive income stream that compliments your skillset
The amount of options in the beginning was overwhelming, but I realized that a lot of passive-income streams were out of my comfort zone, like real-estate investing. Before I expanded into those income streams, I decided to start with one that complimented my existing skillset.
As a writer, downloadable e-books and online courses on topics I was well-versed on, like starting side hustles, personal branding, and public speaking, were the best places for me to start. Because I tapped into skills I already had, it made it easier to get started.
Think about the skills you have and then research passive-income streams that can tie into those existing skills. This will help you get started faster and allow you to have a deeper understanding of the project, product, or idea.