The Truth About Passive Income: What it is, what it isn't, how to make it, and the systems you need to make it work — FEARLESS CEO (2024)

Passive income is not a “set it and forget it” type of business - you still need to get people to your site and into the “top of your funnel” (which could be signing up for your free email course, or registering for a webinar, or downloading a video).

Passive income is NOT entirely passive!

It takes an incredible amount of work and discipline to build the products and systems that allow you to earn passive income. And the people who have that drive and motivation in the first place, generally are not the types to “rest on their laurels” once the money starts coming in.

This is just a reality check: Passive income is never entirely passive. Even when your systems are set up, you still spend time marketing yourself and your business to reach new audiences. And customer service is an ongoing project.

Knowing that even if you decide you need to chill out for a month and rest, or go see family or friends, or just do something crazy, and that your business is still running and making money the whole time, it’s just amazing.

And for me, the biggest thing is being able to work on NEW businesses and NEW exciting projects once the current product is set up and automated. I love building new businesses and new projects, and automating everything allows me to work on new stuff which holds my interest!

It also allows me to build up my income.

There are two main types of passive income products.

eBooks and E-Courses (digital downloads and programs).

They are also generally two DIFFERENT types of products.

E-Courses - usually have open and closed registrations, lots of sales in a short time, launches, then can go evergreen later

eBooks - available for sales every day, bring in consistent sales

There are TWO types of passive income products - the kind that are always on sale (“evergreen”) and the kind that are only for sale during launch periods or two to four times per year.

Other passive income products could be photography, art prints, digital downloads like planners, templates, or blog themes, physical products that are fulfilled via drop shipping.

I sell e-courses and digital products which are both passive income streams. I spend about an hour or two per week working on them and maintaining them after the initial set up. They are a combination of online courses, downloadable PDFs, automated drip email courses, and other resources. I love that I can spend time creating something once, then sell it again and again as many times as I want!

In this post I will be focusing on digital products such as eBooks and courses.

RELATED: The Ultimate Guide to Creating, Selling, and Marketing Your Own eBooks and Digital Products

But you can still automate your marketing efforts with these systems.

One thing to remember is that although the courses, products and income is passive - marketing isn’t! So I spend most of my time on my business marketing and getting in front of more people.

Since the products themselves have “infinite” inventory, my job is to get as many people as possible into my free courses, into my funnel, and to the sales pages.

With my passive income systems, if I want to GROW my business, then I need to put in some time. But if I want to take a break and go on vacation for 4 months and not work at all, then everything just runs on autopilot and stays steady, and my income stays the same.

I’m obsessed with implementing next-level marketing strategies, and since my products and income are passive this is where I like to spend my time.

I have done so many marketing experiments, but the ones that work the best in my experience (and lots of testing) are:

Often times people with huge audiences do not have their own products, and they make a living by promoting other people’s products to their audience.

Affiliates and joint venture partners are awesome. It’s the best way to expand your marketing and sales without more work. However, wrangling joint venture launches and affiliates can be a challenge.

Anytime you are working with other people and depending on them you need to be extra on top of things and it can be more work than you anticipate.

Using affiliates is more about leverage than it is truly passive. But it can mean that you get in front of hundreds of thousands of new people, without spending the time building that audience yourself. I’m all about scaling up quickly - as opposed to spending a year growing your own traffic, just tap into other people’s audiences with strategic partnerships.

This is a truly passive part of my marketing and sales strategy.

A free email course based on a specific topic can help you establish trust and sell your products passively while people move through your “funnel” (learn how to set yours up here).

The free email course mentions my paid course at strategic points throughout the course, sprinkling some promotional copy in with the extremely valuable information in the email course.

And once you have a few recorded webinars, they can actually be set up to passively market and promote your products too.

Let’s say you do a live webinar where you pitch your signature product at the end. You have the recording, a valuable piece of educational content that already has a pre-recorded pitch included!

You can set up a simple “funnel” that allows people to opt-in for the webinar replay, then they watch the content, they learn a ton and become familiar with you and your expertise, and are then pitched your product after they watch the trainings.

This is like a compressed email course funnel.

When someone buys your product, you don't want to have to manually fulfill their order.

Choosing Your E-Commerce / Product Selling Solution

You need to be very clear about what you need from a selling platform and think beyond selling 10-20 e-Books.

Make sure to check for:

There are many ways to create a passive income selling system, such as someone buys the product from, gets a unique password to a membership site, and then can access the material.

If it’s a digital download like an eBook or other digital file, then you just set up your store and button, and attach a file delivery action to deliver the PDF download. That’s the most simple form of passive income. Someone simply buys the file, and immediately gains access to the PDF or other file (yes you can also deliver videos, .zip files, and more).

Here’s one of my favorite super simple passive income systems, specifically for email drip courses. You can set this system up with ConvertKit (or MailChimp, but we use ConvertKit.)

If you’re just getting started, I recommend using this system for your first online course. It is simple and inexpensive to set up. And it’s automated through and through!

STEP 1:Update! We switched to ConvertKit. So now we integrate our checkout cart and ConvertKit for email courses and it's SO MUCH EASIER than using MailChimp!

(There's a full tech tutorial in Your First 1K®. Get in on this >>>)

STEP 3: Create a new product in your checkout cart

STEP 4: Add a delivery file PDF that is a simple “Welcome Packet” explaining how the course is delivered, any passwords or special information, contact info, and product details. Answer as many potential questions as you can in this document. The main thing to include is a reminder for people to check their Spam or Promotions tabs in Gmail, as the course emails can end up in there.

STEP 5: Deploy your "Buy Now" buttons and add them to your sales page (I prefer to use the text URLs and add them to my own Squarespace buttons or my own custom button images).

Now the flow looks like this:

Leads land on your sales page > purchase your product through a checkout page > Convertkit delivers the purchase message, the Welcome Packet PDF file, and automatically puts them on the private “Course List” > this triggers the automation workflow to begin > customer receives the email course automatically on the days that you set up in the workflow.

Totally automated!

This is a great way to set up a simple email course.

You need to create a file that answers any and all potential questions that your new customers might have. When will they receive the first lesson? How long will it be until the get a password? How do they access the course? Where can they reach you? What should they do if they have a question or are missing a lesson?

This will ultimately make your passive income system even more passive. You don’t want to be answering a bunch of emails, especially if they are all about the same thing! So you can continually update and refine your Welcome Packet PDF as you get more common questions. It’s like a pre-course FAQ and instruction booklet.

You need to send a thank you email or welcome packet with further instructions to students.

There might be a week or two between the person registering and the course starting, so it’s helpful to include:

Sending this information automatically reduces the need to keep answering the same questions and provides a sense of comfort for the student.

Sometimes, you may even want to include a video tutorial about joining the course, or finding the group forum. Just like creating products up front and selling them creates passive income, creating these robust FAQ’s and resources for your new students or customers will mean less work for you in customer service hours.

This makes the entire system more passive for you. Some people don’t read the instructions, but an easy-to-follow welcome package will reduce the email queries you receive.

Okay, there’s a lot going on now! See, I told you passive income wasn’t for the lazy :)

So now you’ve got a course or product that’s all set up to be delivered passively. Awesome!

You’ve got landing pages, and a few lead magnets, all delivered automatically via LeadPages and ConvertKit.

How does all this stuff, you know, fit together?!

I made a visual map so you can see!