The Power of Passive Income

Time freedom, location freedom, and financial freedom: passive income is what I set out to achieve that enables it all. If you’ve ever dreamed about earning money while drinking coconuts on the beach or traveling the world without worrying about your next paycheck, then this episode is for you!

Tune in or read the blog version below!

 Welcome back to the Wanderlover podcast, coming to you from Rio de Janeiro, Brazil.

We are officially less than one month away from welcoming our baby boy into this world, which is so insane to think about, like, how I’m going to become a mother this month. I’ll be recording an entire maternity leave episode, explaining how I’m preparing for it all as a business owner.

But today I really want to dive into a topic that completely changed my life and business to enable me to basically take as long of a maternity leave as I want, which is the power of passive income.

Basically if you’ve ever dreamt of sipping coconuts on the beach or traveling the world without worrying about your next paycheck or wanting to spend time with your family without having to be in front of the computer all day or go to work every day, then this episode is for you. 

You guys know, I always talk about time, freedom, location, freedom, and financial freedom. And honestly, passive income is what I set out to achieve from the beginning that enables it all. But first let’s define exactly what passive income is. 

What Is Passive Income?

Passive income is money you earn that is not tied to your time and not tied to your effort. So it’s the opposite of active income where you are trading your time for money, like if you work an hourly wage or if you work for an employer, or if you get paid per service.

So, for example, like hairstylists or nail artists, they get paid per service. Passive income allows you to set up systems or assets that generate revenue in the background.

Think about it as making money in your sleep. And this is a concept that completely changed my life because I went from working for a bank in New York City to being able to achieve this time freedom, location freedom, and financial freedom where I literally wake up every single morning.

Having made money in my sleep and throughout the day while I am surfing (checkout my top 5 destinations here!), exploring a new city, or drinking coconuts on the beach, I get notifications that I am making income.

Common Misconception One

Full disclaimer, there are many ways you can achieve this passive income. It is a concept and a reality that exists in so many different business models whether it be living off interest income, off royalties, dividends, but I personally am going to be focusing on Automations in an online business because that is what I know best and that is the reality that I have created for myself What I personally have built for myself and helped my clients build as well.

Common Misconception Two

The other disclaimer up front is that passive income doesn’t mean no work. It usually always requires upfront effort, time, or investment to build, but once it is running, it gives you so much more freedom to focus on what truly matters.

If you are listening to this episode and you don’t currently have any passive income streams, it’s going to take time and effort and energy to build it. But once you set it up, your reality is going to look so different, right?

I don’t expect you to have created. all of these or else you wouldn’t really be needing this information. So just continue listening with an open mind knowing that if you actually wanted to create these for yourself you can and you can do it within just a few years like I did.

My Journey Towards Passive Income

When I was growing up both of my parents had corporate jobs and were always working from nine to five or eight to six all months of the year Mondays through Fridays.

I remember just being so sad growing up that I was always sent to after school programs and they could never spend time with me during the day or pick me up from school and I would see other students parents who were just always at their games And they were so present and it really confused me because I was like my parents work so hard, but their lifestyle isn’t conducive to like what I wanted from them or what I had expected because other parents, were showing up, like why couldn’t mine?

So when I was working in finance, I knew that if I stayed on the path, I looked at my seniors, my executives. Who were working in a cubicle like for the rest of their lives And I knew that I would be the same type of corporate parent to my kids in the future if I had seed which is why I ended up choosing a different path and that was honestly my core Motivation because I knew I wanted to be present.

I was kind of like traumatized as a kid, always being like the last kid to be picked up from school or from after school programs because my parents were always working late. And so I just wanted a different reality for my kids that I knew I wanted to have. And I knew that it was possible. I knew that it was possible for me to create a different reality for myself. I just needed to take a different path.

Why Doesn’t Everyone Create Passive Income?

So with that being said, I think the main thing that stops people from exploring passive income options is they either don’t want to put in the work up front, they don’t think they’re capable of achieving it, they give up too early, or they simply don’t know.

Like they simply didn’t do the research to see what types of passive income streams are possible because maybe they’re just looking at their parents or their colleagues, right?

Maybe you’re in a nine to five and you’re just surrounded by people who are trading their time for money. But if you’re listening to this episode, you are already expanding your frame of reference of what is possible for your life.

And if you stick to it and really develop your passive income streams and create them for yourself it’s a game changer for so many reasons. 

What Passive Income Gives You

Time Freedom

First of all, like I mentioned before, you have freedom of time. You’re not tied to a nine to five schedule or working an hourly wage. You get to design your days however you want. You get to spend as much time with your family as you want. You get to take as long of a maternity leave as you want or travel for as long as you want. And your time is the most valuable asset because it’s something you never get back.

A Safety Net

Number two, it also acts as a safety net. So even if you’re not actively working, Money keeps coming in and it really gives you peace of mind. You don’t necessarily have to live off of your passive income. Maybe your first year of building these streams, you are only making a few hundred dollars a month. That is completely fine, but know that it’s going to grow.

Infinitely Scalable Income

Which brings me to my final reason that is a game changer. What I found to be true and what my clients have found to be true is that there is no income limit if you have your own business if you have your own Passive income streams in your business. It is truly scalable unlike a traditional job passive income has the potential to grow exponentially so not even Linearly or only every other year when you ask for a raise, it has the ability to grow exponentially. And so once you’ve set up a system, it can keep scaling with minimal additional effort.

My Passive Income Streams

Next, I’m going to be breaking down common types of passive income that I have in my business that I’ve helped my clients build. And you can see which ones resonate with you and which ones you want to introduce into your own life.

Hold the mentality that even if it’s not your reality at this moment, you have the power and the resources to learn, to take action, and create it for yourself. Some of these are going to be easier than others and some of these are going to take less time than others. Some of them will require more work up front.

Digital Products

First and foremost, the first passive income stream that I have in my business are digital products.

These look like eBooks, online courses, templates, basically anything that you create once and can be sold repeatedly with no additional effort. With any digital product, you need marketing.

So you need new leads or new people finding out about your products. On a daily basis. And so what this also is coupled with is a funnel or a marketing strategy that gets you sales automatically in your sleep.

I remember when I first created my first ever digital product, which was an ebook, and I got my first sale, I was ecstatic because I was like, wow, I just made money without having to really do anything. Like prior to that, I had sold physical items online and after I made the sale, I had to go ship it out.

I had to make sure the customer received it. And it was like so many additional steps, but with digital products, it’s automatic fulfillment and you get paid instantly. And there’s no cap on how many you can sell in a day. It’s. It’s truly unlimited and just so scalable. So if you ever wanted to write a book, if you wanted to create a course, this is all possible.

At The Wanderlover, we consistently make five figure months every single month just with digital products because we have everything set up. So even if I didn’t touch anything, I make sales every single day.

Of course, it didn’t start like this, but again. You create it once upfront and you continue optimizing until it becomes this well oiled machine that makes you sales in your sleep.

Affiliate Marketing

The next passive income stream that we have at the Wanderlover is affiliate marketing.

Affiliate marketing is when you promote products or services from another business that you love and you earn a commission for every sale made through your unique link. So think about. When a friend recommends like a brand of perfume or maybe like a gym bag, or in my case, when I recommend Passion Planner or when I recommend my travel insurance, I have an affiliate link for all of the products that I use.

And so when you create content or when you write a blog post or when you share with other people and they purchase it, You get paid out. And the more content you have online, the more people that know about it and click on your link, the more money you make.

So affiliate marketing, we bring in a few thousand every month because the content is already created. People are constantly finding it online and they are purchasing. And so every month we receive checks from all the different businesses that we work with.

It’s completely passive because it’s not like I’m talking about it every single day. It’s not like I need to actively be working for it.

You have a link or you have a storefront, you add in your own unique ID and you just watch the sales roll through. This does take time because you need to make sure again, you have the traffic coming in to convert. into sales.

And so in the beginning, I remember when I got my first ever affiliate link, I thought, ‘Oh, cool.

I’m just going to share it on Instagram. And so many people are going to buy.’ That’s not how it works, but you can never be too early adding an affiliate link to something. So you might add it to a blog post thinking a bunch of people are going to click on it. Maybe no one clicks on it for a few months, but then once your blog post ranks or once people start sharing and finding it.

That link is going to pay out in the longterm, so don’t get discouraged if you’re not making immediate revenue with affiliate income, but do definitely celebrate your first sale. If you’re interested in learning more about making money with affiliate marketing, I have a more detailed blog post here! 

Advertising

Next, we have advertising. So I know a lot of my YouTube friends, they literally make their monthly income just from YouTube advertising.

They get paid out per view of ads. I don’t monetize my YouTube, but I have advertising on my website. So on the Wanderlover blog, as well as this podcast at the beginning of every episode, at the end of every episode, you probably hear ads and I get paid out every time someone listens to those ads. So with advertising, you create the content and you get paid when those businesses show their ads to your audience.

This is also completely passive because I have episodes from years ago that are running ads and people are tuning into my episodes from years ago, or they’re reading my blog posts. that I wrote years ago. It continues paying out even when you’re not actively writing new content or if you’re not actively posting because it lives online and as long as people are consuming it you get paid out.

So every month I also get a deposit for podcasting and then also one for my blog revenue. During my maternity leave I can schedule episodes, right? It doesn’t have to be like every week actively recording or I can not post at all and people can just consume older content. So in terms of this I would say it’s also pretty much hands off.

And of course if you go back to my earlier episodes, you’ll know that this also takes time I didn’t start monetizing the podcast until a few years ago.

If you are committed and if you hold yourself accountable, setting up these income streams are going to pay off in the long run.

Monthly Recurring Revenue

So this looks like either memberships, so we have the Digital Nomad Society, which is a monthly membership, or if you offer payment plans for any of your courses or your services.

So basically you deliver it upfront and maybe people are on a three month, six months, 12 month payment plan. You get that monthly recurring revenue. This isn’t as passive because most of the time you’re still delivering something, but you do see that dollar amount of recurring revenue coming in as long as the services are fulfilled.

Maybe you offer a six month payment plan for a three month coaching program. This would actually be passive, right? You’re continuing to get paid out. But the thing with this is there is an end date. So there is a time frame of when the monthly recurring revenue times out, or if you need to continue to fulfill whatever is in your monthly membership.

So I wouldn’t call this completely passive, but if you have your systems and team set up, it can be really hands off.

With any kind of membership, you can offer exclusive content or resources for a recurring monthly fee. These range from a few dollars a month, like think of a gym membership, right? To hundreds of dollars a month, depending on what you are offering. With memberships, Or payment plans, you can create something today and start selling it and get people signed up. So the great thing with creating something yourself instead of relying on content is that you’re able to get started immediately.

And so if this is an option that aligns with you, that you’re really interested in, I encourage you to think about creating your own offer and please reach out to me on Instagram if you need help because I love running my membership and I love helping people establish monthly recurring revenue in their businesses.

Investments

Last but not least, this isn’t directly tied to your online business, but with all the money you make from an online business, I definitely recommend investing for that passive income.

So investing in stocks, index funds, or just putting your money in a high yield savings account where you get a fixed percent interest every year. (Check out the podcast episode with personal finances coach Michael Kim if you want to learn more about managing personal finances.

You technically could also just live off of interest income if you don’t touch the principal amount. You always want to be thinking, how do you have your money work for you? In the future, I have my eyes set on real estate investing, although that obviously requires a lot of learning and upfront investment to start, but I know that it’s possible and I know that it is so worth it.

How Do I Start Setting Up Passive Income? 

So if you are listening to this episode and you’re like, I have so much to learn. I have so much to do. Same mindset. Know that with the effort and with the commitment, you can also learn and make it your reality. For now, just identify your strengths and choose one of these to work on. Invest time and learning and energy upfront and then continue to improve until your new passive income stream is like a well oiled machine bringing you money in your sleep.

Today passive income streams make up a significant portion of my revenue every month, which is why I am just so grateful to be able to take so much time off on maternity leave. It allows me to live the lifestyle I’ve always dreamed of and honestly It’s not always easy. You have to stay consistent and adaptable, but the rewards are so, so worth it.

So I want to challenge you to take one actionable step towards building passive income this week. Maybe that’s brainstorming digital product ideas. Signing up for an affiliate program or whatever it is, start small and stay consistent.

Thank you so much for tuning in to this episode of The Wanderlover podcast. If you found value, please if you could take a moment to leave a review on Apple Podcasts or Spotify, it would mean so, so much. And I will see you guys in the next episode. Have an amazing week, my loves.

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Danielle Hu

Danielle Hu

Danielle Hu is a multiple 6-figure travel influencer, business coach, and Host of The Wanderlover Podcast. She has traveled to over 65+ countries running her online business and surfing in remote tropical destinations. Her mission is to help creatives and coaches achieve time freedom, location freedom, and financial freedom through online entrepreneurship.

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Hi, I’m Danielle

My mission is to help you design a location-independent lifestyle through online entrepreneurship, to achieve time freedom, location freedom, financial freedom.

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