As if math isn’t already scary enough, motivational speaker Steve Edwards once scared a class of college business students shitless by calculating how much money we’d all need to survive life after work. Steve did all the math right there in front of us, so when he came up with a stupidly high number for how much we’d need for retirement, we had good cause to believe him and his version of the American Horror Story. (This one’s way scarier, trust me.) Saving up this much on a good salary alone looked just about impossible.
What was that number, you ask? I don’t know, I probably blacked out–my poor little heart couldn’t take it. I was probably already weighing my chances at successfully robbing a bank by that point.
Steve offered a solution. And since Steve so generously took the time to meet with me personally twice over coffee to give me a bit of career and life coaching (this guy gets paid to do stuff like this, and he listened to my aimless sob stories for free)–I know he’s genuine, I know he cares, and I know that he’s one smart dude. So let’s take his advice.
What was Steve’s secret to living larger than your salary and having enough money to retire comfortably?
Ass. Oh wait–he might’ve said assets. Yeah, that’s the one.
Steve has plenty of long-term assets, mostly in the form of commercial real estate. Steve’s big message for all us Clemson students was that long-term assets are essential for investing in your future and bursting through the bottleneck that is time-based pay. We’ve only got so much time in the day, so it makes sense that we should seek investments that–after an initial spurt of balls-to-the-wall, intensely involved work–will continue to serve as a cash flow long after we’ve completed the job.
Now I’m not in the position to buy an extra house just for shits and gigs and I’m guessing most of you aren’t either. Real-estate’s a huge investment that comes with a lot of risk, and although I trust Steve’s advice and will consider going that route sometime in the future, I wanted to figure out how I could start taking his advice right now.
Lucky for me (and you), the age of info products is here. We’ll also call them digital products or creative assets. But you know what they are; I won’t get into that now.
What we do need to talk about, though, is why you haven’t built them into your career plan yet. Info products are great long-term assets for creatives since we’re great at creating something from nothing, something that could really provide value to people. We may not all be able to go buy extra houses yet, but adding cashflow streams to your regular income by creating your own long-term assets is the next best thing–or perhaps even better.
Why You Should Build a Repository of Creative Long-Term Assets
There’s so many great reasons to start planning your next info product or other kind of long-term asset. But let’s be real about it and come at it from both sides.
- The dough. The bread. The Benjamins. Surprise, right? Succeed and you’ll have added another source of cashflow to your portfolio of income streams. The beautiful thing about it is that there’s no limit to what you can do here. Unlike time spent at a salary job or time spent doing client work, time is not a limiting factor in your asset’s earning potential.
The best part? There’s no outer-imposed limit to how many digital products you can create–it’s all up to you. Find the time to invest in regular asset creation and you’ll set yourself up to be adding extra cashflow to your income from every which direction.
- It’s low maintenance. Set it up right and the amount of time needed for maintenance will gradually decrease over time. There’s plenty of tools out there for savvy, enterprising individuals such as yourself to make managing all aspects of digital products much easier. You could even hire an assistant to maintain your info product repository if you’re doing well enough to stay in the black.
- You can fail. There’s risk, sure. But who’s going to fire you if you screw up? You see what I mean–your career or reputation probably won’t take too hard of a hit if you don’t get it quite right this time, so there’s no need to kick your own ass about it. If you make a mistake, destroy all evidence that you ever tried and pretend you know nothing about it. Mistake? What mistake? No one has to know.
Now try again.
- It builds your expert status. Creating your products will undoubtedly take lots of research. Churn this stuff out well and often enough and it’s inevitable that people will start coming to you as an authority on your topic. Authority status like this leads to bright opportunities like speaking engagements, guest posts and interviews, and even book deals; it also helps grow customer demand for whatever products you come up with in the future.
- It’s flippin’ fun. Am I right? And how cool would it be to know that you helped show someone how to get one step closer to his personal or professional goals? Especially for someone who gets all hot and bothered at the thought of planning, organizing, and crafting a drop-dead gorgeous spreadsheet, creating an info product from scratch sounds exhilarating to me. Another plus is that pet projects like this often fall under the umbrella of your interests, hobbies, and passions, which is great for feeling fulfilled in your career and in life.
- It takes time up front. You’d didn’t expect to get something from nothing, did you? Here’s the deal: it will take work. It’s just about doing that work in a way that sets you up for less work in the future. That’s when the passive income part kicks in.
Before diving into your project, you’ll need in-depth planning to make sure you have all the time you need to give it your all. If that means taking vacation time from your day job or working nights and weekends, then know what you’re signing up for and make sure you’re in a place in your life where you’ll be able to handle it.
- There’s still risk. It sure ain’t a house, but it’s still got some risk to it. Risk comes from 2 places here: 1) a good digital product will usually take a bit of money up front and will definitely take up time that you could’ve spent doing other things and 2) people might think your product is the pits.
It should be of some consolation to you that if you establish yourself as moderately authoritative in your field first, plan your product well enough, and research potential demand for it, you can mitigate both of these types of risks. And even if your product isn’t great, I’m willing to bet you’ve got at least some good material there you can salvage if you’re brave enough to give it another whirl.
The #1 Reason to Build Passive Income Streams
If time is your bottleneck, you’ll never have enough of it.
If you work on salary or if you work for clients who only pay once for your deliverables (i.e. no royalties), time is your bottleneck. Your potential for financial growth is very limited–it’s in someone else’s hands and it’s based on how much time you can spend working.
There’s only so many hours in a day, and doing work you’ll only get paid for once isn’t a solid plan for financial success. There will never be enough. When it comes to time, money, freedom–traditional salaried/contract work alone will not get us where we want to go.
This is why I finally decided to dive in and write a book. A novel, no less. And that’s some risky business.
But the pay cut I’m dealing with now by taking on less client work to squeeze this novel time in feels right. And that’s a crucial part of deciding to finally get started on a side project: you won’t know for sure whether your novel or digital product will be a success until you sit down to give it a try. Cliché, I know. But it’s the damn truth.
It’s scary to wonder, “What if it doesn’t work out?” You can’t know–I’m sorry. You just can’t. You just have to go with your gut and know that, even if you do fail, you can’t say you didn’t do your best. You can’t say that you never gave your passions the kindling they deserve.
The best way to curb this kind of fear is to give yourself a deadline. Say to yourself, “Alright, if I’m not done with this project by this date, I’ll have to sit down and really make some tough decisions. I’ll have to think hard about whether I should give it up or continue on with a new deadline.” I’m giving myself 40 weeks to get a nearly-finished version of decent novel down–after that, I’m upping my client hours again. Failing to set a deadline could drag a fruitless project out forever, and we certainly don’t want that if we’re trying to mitigate risk.
Types of Creative Products that Can Serve as Long-Term Assets
There’s lots of cool ways to make money from a side hustle, like offering coaching or entering your work into contests for prize money. But what we’re focusing on here are strictly long-term assets, or assets that pay more than once. Here’s a few examples to get your brain juices flowing.
- Books. Fiction or nonfiction, books are probably my top pick because of the whole slew of author’s rights that come from a good book deal and a well-negotiated contract. (I prefer striving for publication since the level of involvement required for success in the self-publishing industry is a turnoff for me.)
Reprint rights, foreign rights, audio/film rights–the list goes on and on. Think of your book as a pie that you can slice up however you’d like. Each slice can be sold to different people, and because your granting of rights to another party often comes with an expiration date, sometimes those pie slices will magically reappear so you can sell them all over again.
Nonfiction books have a special advantage to them in that if you’re a regular blogger and a moderately-established expert in the field, you’ve got a good chance of snagging someones’ attention and winning a great book deal. What’s cool about this is that if you’ve already written a lot on the subject, your book can practically write itself.
- Courses or seminars. I’ve taken at least 4 online courses in my short life (minus courses during my formal education) and I must say they are the coolest way to learn. I LOVE courses and count on enterprising individuals such as yourselves to teach me all I want to know about my hobbies and professional skills. Stuff like this is in demand–you’ve just got to zero in on it and think about how your skill sets can help. Later we’ll talk about all the courses I’ve taken and what I recommend for other creatives.
Courses can be document-based (like PDFs) or video-based. If you’re running a live course or seminar, make sure you’re recording everything that goes on so you can package it all up nicely into a course that’ll keep selling long after you’ve finished teaching it.
- Apps. Haven’t seen a lot of these done by any of my fellow creatives yet, but it’s definitely an option. If you’ve got content, a skill to teach, or a formulaic process that helps others complete a certain type of task, you’ve got the start of an app idea with potential.
Don’t worry about coding–all you need’s a good idea and some startup money to hire a developer for all the nitty-gritty. Keep in mind that there will likely be maintenance and advertising costs to keep your app running smoothly and successfully, but the level of work needed to keep this cashflow stream coming in hot significantly drops off after the publishing process.
- Blogs. Sure, it takes a bit more maintenance than all the others, but it’s on this list because the opportunity for more income grows exponentially with each new successful post published. Because of affiliate links, on-site ads, and self-promotion, a blog post done well can continue bringing in cashflow for years after it’s published. You could stop blogging altogether and continue to reap the rewards from a backlog of successful blog posts. Not to mention, keeping up with your blog will build the credibility and audience you need to succeed in the marketing of your other long-term assets.
- Published pieces. For the writers out there: I’ll stick to my guns and say that for the most part, of your freelancing work is not even close to being a long-term asset. With one exception: if you negotiate your work-for-hire contract well enough, you may retain certain reprint rights. Kelly James-Enger explains well in her book that selling reprints is all about reading the fine print, negotiating, and creating a system for regularly revisiting your collection of eligible pieces to see if you can get someone to give you more money for them. (This only applies to pieces accredited to you, by the way–no ghostwriting work for this one.)
Tips and Resources
One last thing before we wrap up here–please make sure your offering is based on a genuine craving to solve some sort of problem for people. Your focus should be creating value, not churning out more empty bullshit that clutters up the internet.
I’m even a bit hesitant to use the term passive income, as it’s quite a popular buzzword right now and I think it’s a bit misleading. This is serious business, make no mistake about it–and it’s only passive once you’ve sweated through the thick of it. There are no shortcuts, there are no secrets. It takes a lot of time, energy, and resources. It’s not easy stuff, but it could end up being worth every bit of it.
These resources will help you get started on your journey.
- The Smart Passive Income Blog. Pat Flynn is a superstar on the internet known for helping others figure out how they can supplement their incomes with long-term, low-maintenance assets. He is such a genuinely good dude it’s heartwarming. Take a gander at his blog–you won’t be disappointed.
- Products By Regina. It’s been on my to-do list for a while now to check out this gal’s info product goodies. She’s got lots of courses and ebooks on how to break into the info product market. Course there’s lots of these types of helpful resources out there, so a quick Google search should do the trick.
- Dean Wesley Smith’s article on making a living as a novelist. We’re in this together, friend! This was very encouraging for me to read and I’m sure it’ll be the same for you if you’re considering a novel as a long-term asset. Here’s where I got the pie metaphor for all the rights that come with publishing a book. I haven’t read his book Killing the Top Ten Sacred Cows of Publishing yet but from what I have read (many chapters are posted on his site) it looks pretty dang good. I love his tone when he talks to aspiring novelists–he’s blunt and tells it straight (with a lot of sarcasm), but somehow still magically inspires you to give it all you’ve got. His subtle, non-fluffy way of encouraging his readers is refreshing.
- A helping hand. Hire professionals to take care of all that accounting and payment processing bullshit–you’ve got better things to do. Consider a virtual assistant for all the menial stuff you really don’t need to be doing yourself. And please, please, please, get some help figuring out what your new income streams will mean for paying your taxes. I hired a tax consultant who I visit 5 times a year. It’s affordable and the peace of mind I get from knowing I won’t be shacking up with Charleston’s not-so-finest due to tax evasion is worth it.
- Your role models. What content creators do you look up to? I love Karen at Untamed Writing and Ash at The Middle Finger Project. Check out what these people are doing and see if you can put your own spin on it. What fresh perspective can you bring to the table and use to create a product that’s uniquely you?
- Me. I’m writing a novel. I don’t know a lot about writing novels, but already I’m learning a lot about balancing passion projects and client work. I’ve got lots of handy home-made tools (spreadsheets and Evernote notes) that I can’t wait to share with you soon, but if you’d like any advice in the meantime, give me a shout.
You better believe there’s plenty more, but here’s my top 5 (yes, I’m on my own list) because sticking to a few powerful resources instead of endlessly sifting through a jillion of them will have you starting now rather than later. Soak up all you can, but don’t put off action.
When planning out your career goals for the next year or next quarter, ask yourself: is it time to start building a portfolio of long-term creative assets? If the time’s not quite right, set a date to ask yourself again. And again, and again. Until you’re ready to take on a project that could make all the difference for your financial security and your future.
And if you need a bit of encouragement to get cracking on that project you’ve been daydreaming about, keep my favorite quote of all time with you:
Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favour all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamt would have come his way. Whatever you can do, or dream you can do, begin it. Boldness has genius, power and magic in it. Begin it now.
Begin it now.