4 Real Methods to Make a Living With Passive Income

4 Real Methods to Make a Living With Passive Income

Dustin Lien
August 29, 2015

One of the most interesting ways to make a living or supplement your income is by developing a catalog of passive income streams.

Real quick, let’s define passive income before we dive in.

We can’t ignore how Pat Flynn of Smart Passive Income defines it (though it’s slightly different than how I do):

Building online businesses that take advantage of systems of automation that allow transactions, cash flow, and growth to happen without requiring a real-time presence.

The way I like to define passive income is:

Money made on a regular basis with little to no direct upkeep required, or as a byproduct of other necessary efforts.

So before you get sassy with me, remember how I define it.

Passive income is NOT a get-rich-quick scheme. It’s not something you can put zero effort into and expect a big payday out of. If you’re looking for ways to “make money fast!”—this is not something for you.

Typically, passive income is a result of a lot of upfront work that pays off later. It’s still hard work, but what makes it passive is that it doesn’t require your real-time presence to produce income.

4 Passive Income Methods

1. Affiliate Marketing

Affiliate marketing is a form of marketing where you get paid an agreed-upon amount (typically a percentage) for sales of another company’s product that were made by your efforts.

On the flip side of affiliate marketing, if you have your own products, you can pay other people for their efforts that result in sales of your products.

For the purpose of this post and what this blog is about, I’m gonna focus on the first of the above mentioned because it’s more relevant.

Big companies that have a lot of products usually have an affiliate program set up that you can simply sign up to participate in (like Amazon Associates).

amazon associates passive income methods

They will give you specific codes to use for specific products to show that you were the source of the sales. Typically as long as the sale is made within 24 hours, you get credit for it. This can vary depending on the program.

You can use those links to work into your content and suggest products for your website visitors.

For example, if you purchase The 4-Hour Workweek by Tim Ferriss through that link, Amazon will pay me a percentage.

The cool thing about it is, you can literally be making money while you sleep, and there’s no risk with trying it because it’s free to become an affiliate.

Obviously to be making decent sales, you need to have a meaningful amount of traffic to your site, which means keeping up with it, but other than that, it’s a very true form of passive income.

You can also set up custom affiliate agreements with small companies on your own.

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2. Website Ads

There are 2 main ways people make money using web ads.

The first, and most common, is by participating in an advertising network like Google AdSense.

You’ve probably seen these all over other people’s websites.


Basically, you allow ads to be displayed on your site, and in return, you get a small amount of money every time an ad is clicked (there are also options for payment based on views or engagement, but they aren’t as widely used).

It’s typically a very low amount of money, so don’t expect to see much in your piggy bank unless you’re getting over 10,000 visits/month to your site.

If you are getting a lot of traffic, it can be good money (though this method is typically a bit damaging to brands trying to earn visitors’ trust because it can make them feel “used”).

The second way to use ads for passive income is by directly selling ad space to advertisers yourself. At my first job out of college, the company I worked for made over $250,000/year selling ad spots directly to advertisers. The benefit here is that you can customize exactly where ads are placed, and sell packages or even yearly contracts.

3. Ebooks

In two years, Steve Scott (also writes as S.J. Scott) went from making $0 to making $40,000 a month by writing ebooks.

I should mention he wrote over 40 books in that time frame, but you can see how this is a profitable option.

Whatever your niche is, write an ebook (or 40) on the topic and sell it on Amazon (some Amazon ranking hacks here), on your own site, or wherever.

It's Time to Start

I wrote It’s Time to start: Conquer the Common Fears of Starting a Business & Master the Mind Tools for Success earlier this year, and every month I see a nice little check from it without doing any extra work. The cool thing about ebooks is that the more you grow your personal brand, the more books you naturally sell.

4. Digital Courses

Digital courses come in many shapes and forms, and can live on a variety of different platforms, but just like ebooks, once you’re finished with the upfront work required to create them, you can make passive income off them.

If you have a large online following, I suggest selling directly to your newsletter subscribers and visitors using something like Gumroad, but if you don’t have much of a following yet (or you want a second selling platform), you can try using something like to sell your course.

If your course is good and has good ratings, they will literally sell it for you, and you can go on about your life collecting passive income. Like all platforms, it comes with a catch or two, so read the rules first to decide if you’re interested or not.


If you’re looking for ways to make money while you chill on the beach, start here, but be prepared to work your ass off for a while.

Alone, these methods can make you some money. By using multiple, you can make a lot of money.

These are just a few of the many ways to make meaningful passive income. Leave a comment if you’ve got some other good ones!