Episode #47: My Passive Income Plan Revealed
Today I’m going to be practicing what I preach, and pulling back the financial curtain for you on my life, my businesses, and my passive income generating plans for the upcoming year. I’ve been toying with the idea of making an episode like this for a while, but I put on the breaks every time I searched ‘passive income videos’ on Youtube because the search results are populated with massively intimidating videos to compete with. Seeing top videos pop up like Ali Abdaal’s ‘How I make 27k a week’, Nate O’Brien’s ‘How I make $7,200.00 A Month’, or Andre Jikh ‘How I earn $700.00 a day’ makes it hard to want to add your own voice to the mix.
BUT I recently realized that those videos, while they’re exciting to a lot of people, aren’t necessarily relatable to a lot of people. When you’re just getting started and trying to figure out how to piece together all the bits and pieces to create some passive income for yourself, it’s really hard to follow in the footsteps of someone like Ali Abdaal, because your brain automatically says ‘well yeah but he has an audience 2.3 Million subscribers’ I can’t make this work with my 0 subscribers’,
SO, what I decided I’m going to do instead is create an ongoing series of videos outlining my passive income plans over the upcoming years. I’m going to be starting from where I am today, which is a very early iteration of running a passive income based business. I’ll continually share what’s working, what’s not working, what I’m testing, and what my numbers are. What I’m hoping to bring to the conversation is something more relatable to you, as well as a growing body of information that will apply to different people at different stages of their passive income journeys.
What is passive income?
If you’re even remotely interested in the financial freedom movement, then I’m sure you’ve heard the word passive income. It’s like the holy grail for achieving financial freedom.
It means developing income streams that keep working for you and earning you money while you’re sleeping, while you’re on vacation, while you’re hiking with your dogs, and while you’re out enjoying great meals and drinking great wine with your friends. Basically, it means you can be making money while you’re doing anything other than working. It’s like building a perpetual motion engine that keeps on running while you step away from it.
My business background
I’ve always been an entrepreneur, but my first businesses were extremely labor intensive. The first business I ever ran was an organic produce farm, which was incredibly labor intensive, and after a couple years of doing that I shut it down in favor of a wedding photography business I’d started that was taking off.
I love my wedding photography business, but after just a couple years of running it I realized that my income was directly tied to the hours that I showed up and put in on a wedding day. Now the hours I worked in that business were pretty minimal, especially once I got the hang of outsourcing, but still, I didn’t like that my income was directly tied to 30 days a year that I had to show up and work no matter what else was going on in life. At that point I was in my mid 20’s, and I started toying with the idea of starting other businesses in addition to the wedding photography business, and potentially pursuing more of a passive income based model for the next business.
Fast forward a few years and I’d figured out how to add some more passive income streams to my wedding photography business, which I still run today, I’d launched an eCommerce shop for my photography, and I’d also settled on the idea of starting to build the framework for this business, The How To Adult School, at the end of 2019. I’m going to break down the passive income model for each of these three businesses for you here, and update you over time with how things are going for each of them. Going forward when I collect more data as part of this series, I’ll start sharing things like sales numbers, return on investment, and other numbers like that with you.
Passive Income Stream #1: Printed Product Sales
Passive income stream #1 is printed product sales through my wedding photography business.
When I first realized that it was tiring directly trading my time for money, I knew I needed to learn about passive income and knew most importantly that I needed to start with what I already had. I had a thriving and growing wedding photography company, I loved it, and wanted to continue working with what was already there. So, I had to figure out how to get that business to generate passive income.
After toying with a few different options, I settled on printed product sales. I now deliver my photo galleries through a software with an online store that sells printed products like albums, prints, and frames. It’s connected to a print lab that fulfills these orders directly and ships them to my clients, AND it collects email addresses from people who visit the gallery, so any friends and family of the couple who view the gallery suddenly become potential clients for me as well.
There’s an automated sales system that promotes printed products to the people who own the photo gallery, and I create occasional sales campaigns that send deals out to all the other people who are interested in the photos as well like couples or families whose portraits I also took on the wedding day. So, all of a sudden I have a passive income stream for an extremely service based business.
It took some time to set up initially, but now my clients are happy because they have an easy and user friendly system to order prints, and I have access to potential sales from their network of people who are also invested in that same photo gallery. It was a really easy way to increase my sales number each year, without having to directly build albums or place print orders for people. Aside from the occasional misprint that I have to sort out, it works really well, doesn’t make me directly trade my time for money, and generates additional income for the business.
Passive Income Stream #2: Ecommerce Shop
Passive Income Stream #2 is an eCommerce store where I sell large scale fine art landscape photographs. I launched this business in the summer of 2020, when my wedding photography business took a hit with Covid cancellations.
The website collects email addresses through a discount code pop up that offers a percentage off for email list insiders, so whenever I add some new photographs to the collection, I send an email out to the list, and a few new orders roll in. The order dimensions and specifics land in my inbox, I send them off to the print lab along with the photo file, and then they print, frame, and ship the photograph to the client. It really takes me no time other than sending the order details to the print lab once I’ve created the photographs and uploaded them to the shop.
Given how little time and energy I’ve invested into this business so far, I’m amazed with how well it’s done already. It’s generated a nice little chunk of passive sales since I sort of haphazardly launched it in all the covid confusion and chaos. In terms of plans to move ahead with this business, I’m planning to improve my marketing efforts here, add more variety to the photographs that are available, and see how it continues. Other than taking the photographs, and doing some marketing this is a passive income model that so far functions purely on SEO and an instagram account. It takes very little time, and I’ll just keep it going and start working on scaling it a bit over the upcoming year.
Passive Income Stream #3: Investment growth and dividends
To be honest this isn’t something that I really consider passive income, because it’s not income yet. It’s never income until you actually sell the stocks and realize the gains that you’ve made, BUT it is an important part of a plan to build wealth and grow your money over time, so I thought I should include it. The way that this works is I save a percentage of my income each year, put it into my RRSP and TFSA accounts so that it’s tax sheltered, then I buy investments within these accounts.
These investments either grow or earn dividends, so the money I put in multiplies into more money over time. Now again, I don’t consider it passive income per say because I don’t intend to access the income that this generates until I’m ready to retire and live off of these accounts. I’ve been saving and investing like this since my early 20’s, and have so far created a very comfortable nest egg because I’m playing the long game with both my RRSP and TFSA so I’ve never accessed the money in these accounts. As far as I’m concerned the money in those investment accounts isn’t mine to spend until later in life. Instead I’m making the decision to put it to work for me by investing.
Passive Income Stream #4: Advertising Revenue
Passive Income Stream #4 is advertising revenue from the How To Adult Show. Now this is where we start getting into uncharted territory for me. I’m just getting started with my passive income journey running the How To Adult School, and this is what I’m most excited about tracking and keeping you updated on.
As part of this business, I produce a free weekly episode of the how to adult show, teaching a basic personal finance lesson each week. It comes out on youtube and in podcast form, and I’m actively working on building an audience for each of them. There are a few different ways that I will be able to make money from a show like this.
This first is as a youtuber, once you reach 1,000 subscribers and 4,000 of watch time within a year, you have the opportunity to monetize your channel. This means that I will have the option to allow youtube to sell advertising to show in my videos, and I receive a cut of these ad sales. This is a long term passive income plan, and the idea is that it grows over time, because Youtube is an SEO based platform. This means that unlike other social media channels, once I create a video on youtube, people have the opportunity to find and watch that video for years based on what they search for. This means that once I’ve created the viewership base for the show, I will be able to earn advertising revenue from videos I created years previously because people will still be able to find and watch them. Over time, provided I create good and helpful free finance lessons for you all, this will snowball into an ever growing source of passive income.
The second way that I plan to make advertising revenue through the show is through the podcast. I plan to sell advertising time in the podcast to companies that I think will be useful to the listeners. They can choose to sponsor me to create an add for their product or service, and I will insert that add into the podcast. This is honestly something that’s a ways down the road for me because the podcast is still fairly new and most companies won’t care at all about the size of the audience I have there so far. But as long as I’m consistent, create a good show, and actually create lessons for the podcast that help people, then that listener base will grow, and companies will want to access that through me, which I can eventually charge for.
Passive Income Stream #5: Affiliate Marketing
If you’re on social media these days the phrase ‘affiliate marketing’ probably makes you think about that girl you went to school with, who keeps inviting you to follow her account ‘affiliate mama’ where she posts videos about the fact that she makes tonnes of money online and if you click her link to sign up then she’ll show you how you can make tonnes of money online too.
Anddddd that is NOT what I’m talking about when I say I’ll earn income through affiliate marketing.
Instead, I have signed up for partnerships with everyday companies in the finance world that I think offer a great product or service that will be useful, helpful, and interesting to you. I have what’s called ‘affiliate links’ with them that are on my website, my landing pages, my social media accounts, and when people click on these links then sign up for the service or product, I receive a payment from the company for bringing them new clients.
Over time, the affiliate programs I’m part of will change as I find new companies that I want to partner with, or as companies that I’m currently partnered with change, so this should provide a slowly growing and evolving stream of passive income for the business as well. I’m really in the process of learning a tonne about this as I go, but already even with the relatively small audience that I have right now, it’s proving to be a profitable source of passive income for the business. All over the platform that I’ve created, people are finding my recommendations helpful, and clicking the links, and I’m earning $2.00 here, $20.00 there, and as with anything overtime this will start to add up especially when you add it to all the other passive income streams that are running at the same time.
Passive Income Stream #6: Selling Online Educational Products
Passive income stream #6 is selling online educational products. As I’m sure you’ve guessed, the How To Adult School will also offer paid educational products for people who want more personalized advice, support, or accountability to help them learn about managing their finances. There will always be free educational material, but there will also be a variety of courses and supporting digital products available for purchase. I haven’t offered anything for sale yet because I’m still very much in the process of listening to and learning from the audience I currently have so that I can create products that actually solve the problems that you actually have, instead of just guessing at it myself.
These products will eventually exist on the website and will be available for purchase. I haven’t solidified this plan yet, but they will definitely be in digital form, and will be purchased and delivered digitally so that I don’t have to administer anything other than customer service and support so that the income will continue to be passive, and I get to continue sticking to that holy grail business model that I started out by describing to you.
Follow for updates on how the passive income model is developing!
And that just about wraps up the passive income plan in its current iteration. Like I said at the beginning, this first episode of the series is just to provide you with an overview of the plan I’m working with right now. I’ll film episodes that go into more detail on each passive income stream and the actual hard numbers behind them over time as I experiment, succeed, fail, and try different things. So, if you’ve been wanting to create a passive income generating business as well then make sure you subscribe to the channel so you don’t miss these episode updates!
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