Passive Income Rules

By in , , , ,

If you’ve been following along with the latest blog posts and webinars, you’ve probably been thinking about passive income.

As a business owner, perhaps especially as a blog business owner, passive income is one of the keys to your financial freedom…but before you dive headfirst into the next affiliate marketing program that promises huge, easy payouts, it’s time to do your homework.

Passive Income Rules

kitty lusby reads business books
Pat Flynn’s latest book

Passive income has become a bit of a buzzword lately, especially with the help of experts such as Pat Flynn (who you should totally follow. Just saying.)

So, I have no doubt you’ve heard of it…

But Pat Flynn’s brand is SMART Passive Income, and there’s something to be said for that.

The big allure of building an ongoing income is that you don’t have to keep putting in time and work to make money – but that doesn’t mean you don’t have to put in work to get things started.

And it also doesn’t mean you can do nothing and continue reaping benefits, either.

Passive money is not necessarily easy money.

It’s not magic.

And it’s not new.

If you’re frustrated because your expectations haven’t been met, or if you’re just starting to consider your monetization strategy for long term success, you should follow some smart rules:

Rule 1: Don’t try to buy your success.

Yes, if you know how money works, you can invest in assets that pay dividends.

That’s not what I’m talking about.

To further clarify, there are a couple of things you should keep in mind:

  • If it looks too good to be true, it probably is.
  • “Easy” money usually comes with strings.
  • If you’re not willing to put in the work, don’t start the business.

professional blogging takes some hustle to build passive incomeLots of people are eager to buy their income, either by purchasing a website that’s already successful (without intending to do any work on the upkeep) or by “investing” in a tool or system that’s supposed to yield incredible financial returns with a few copy-and-paste web pages.

Here’s the thing:

People who make ongoing income from their business have usually done a lot of work that they weren’t paid for…at least, not at first.

Building a passive income is frequently a matter of frontloading your work, setting up a smart system, and then reaping the benefits while you do a little maintenance.

If you’re looking for fast, easy money…you’re a prime target for scams and shady marketers.

It’s been said that you can only fall for a scam if you’re trying to get something for nothing, and while that’s probably an oversimplification, there’s a lot of truth to the sentiment.

Be willing to do the work. Passive income is the shortcut to financial success – so don’t try to shortcut the shortcut.

[bctt tweet=”You can’t buy success. Easy money comes with strings. #passiveincome” username=”kitty_lusby”]

Rule 2: Nothing is forever.

Products, services, and information all have life cycles.

Instead of stopping work and congratulating yourself, smart entrepreneurs use that time they freed up to develop another asset. They keep up with the market – their eyes are on the horizon, so to speak.

market trends indicate that blog monetization through dependent income sources are less viableOn top of that, consider this:

Even if your product is likely to have a long lifecycle, and you don’t need to put in hours to get a monetary return, your brand and your community require some upkeep.

Be careful thinking you’ve “made it.”

There’s always someone else on your heels, ready to improve on your design and eclipse your success.

Hopefully, that person is you.

One of the most common examples of passive income are book royalties:

How to Win Friends and Influence People has been selling for about 100 years, and Dale Carnegie (the author) is dead.

He’s making a lot of money for a dead guy.


The Dale Carnegie Institute still exists, still releases updated versions, still markets the book, and still serves his audience.

If the Dale Carnegie Institute disappeared, so too would those book royalties eventually.

[bctt tweet=”Don’t stop working – true entrepreneurs never finish innovating. #passiveincome” username=”kitty_lusby”]

Rule 3: Don’t abandon your community.

You can automate processes.

You can’t automate humanity.

As a blogger, you have a responsibility to that community you’ve built. They supported you and helped you grow, and you owe it to them to stay current, relevant, and honest.

products have lifecycles, so they're not popular foreverSome people use ghost writers, while other people have a problem with that.

Some people schedule their social media posts, but others feel that they’re misleading their audience if they don’t post personally and interact genuinely.

There’s no right or wrong answer on how much or how little automation is appropriate for you. It depends on your brand and your values.

However, no matter how you decide to handle scheduling, delegation, and automation, it’s up to you to keep the focus on serving your community in whatever way is best for them.

Sometimes that means Tweeting while you’re on vacation.

Sometimes that means Snapchatting when you’re not wearing any makeup.

And sometimes that means sitting down at your computer every week answering emails, even though the same questions have been asked 100 times before, and even though you’d rather be learning to dance the Cha Cha with a bombshell named Nadya.

If you want to learn more about building your community, especially on social media, you NEED to follow Gary Vaynerchuck. He knows a lot more than I do…on this topic.

[bctt tweet=”If you abandon your community, don’t be surprised when they abandon you. #passiveincome” username=”kitty_lusby”]

4: Stay on course.

One of the most common amateur mistakes in any business is this:

You make a plan, and you begin to execute…but then, you hear about this awesome technique that’s going to make you so much money, so you change the plan…but then, you hear about this other really cool methodology that other business owners love, so you change the plan…

copywriting is a creative marketing strategy that's also lots of funAnd those methods are great.

But so was your original plan.

No matter how good and smart and effective the method, it won’t work if you don’t follow through to the end.

That’s why education is a wonderful thing, but overeducation can be your kiss of death.

Knowledge without action is not power. It’s just knowledge.

[bctt tweet=”If you’re going to do it, finish it. Otherwise, you’ll end up frustrated and broke. #passiveincome” username=”kitty_lusby”]

More Resources:

If you’re just starting to build your monetization strategy, you should check out this blog post that describes the different kinds of income you can make from your blog.

The webinar replay for Make Money With a Solid Blogger Business Plan is available here for a limited time. Sorry, time’s up! Stay tuned for future webinars.

For those of you in the Las Vegas area, you can get educated in person from the following groups that operate through

homework on


Passive income is not a new concept.

People who invest in stocks that pay dividends, own commercial real estate, and make royalties from the use of their trademarked materials are all creating passive income.

The opposite of passive income is active income, which is made by putting time/effort/money in, and the money stops when the action stops.

Learning to identify the difference is important if you’re planning to make lots and lots of money.

After all, financial education usually precedes financial abundance.

Read down this list of 10 ways people make money, and figure out whether they’re active or passive income strategies.

The answers are posted in the comments to check.


  1. Martha goes to her job every day and gets paid based on the hours she works.
  2. Bobbi gets paid by major cereal manufacturers every time she writes a blog post about breakfast cereal.
  3. Candi models clothing on Instagram and gets paid every time someone clicks the link in her profile.
  4. Gary writes sales letters for direct mail marketers – he’s paid to write the letter, and then gets royalties of $0.05 per name if they opt to mail the same letter again.
  5. Harley is a doctor, and she charges her patients according to the service she provides.
  6. Maggie purchases real estate and rents the property to businesses who want to set up shop in her buildings.
  7. Charles gives dog training advice on webinars which are recorded and available any time for $5 per view.
  8. Angela sells used books on ebay, so her online store is open 24/7.
  9. Rupi has built an online directory of landscapers, and some of the people in his directory pay to feature their listings more prominently.
  10. Cara is a consultant and helps companies improve their quality control remotely, using video chatting and screen sharing to work with organizations worldwide.

Some of those might not have been as easy as you thought.

How did you do?


3 comments on “Passive Income Rules”

  1. Reply

    Another great article.

    Remember, your passive income will grow exponentially when you are providing real value to your audience. It’s all about your reader – provide them products and services they need and they will pay you for it. Consistently give them great value and they will keep coming back to you – with their wallets open.


    1. Reply

      You just summed up the blogging industry in two sentences.

  2. Reply

    Here are the quiz answers:

    1) Martha’s income is active. She trades hours for money.
    2) Bobbi’s income is active. If she doesn’t write a blog post, she doesn’t get paid. The income does not continue.
    3) Candi’s income is passive. The work – posting on Instagram – happens once, and the income continues as long as people purchase.
    4) Gary’s income is active with the potential for additional passive income. Writing the letter is active, but the royalties are passive.
    5) Harley’s income is active. She may charge whatever she likes, but she’s only charging once.
    6) Maggie’s income is passive.
    7) Charles’s income is passive.
    8) Angela’s income is active. It might seem passive because her store is always open, but the actual transaction (the sale of a book) only happens once and does not continue to produce money.
    9) Rupi’s income is probably passive. If Rupi has to manually promote each listing every time someone pays, though, it’s active. If his website automates this process, his income is passive, since the work was in building the website itself.
    10) Cara’s income is active. She simply has a job like Martha does, except she works remotely.

Leave a Reply

Your email address will not be published. Required fields are marked *