Why Affiliate Websites Are the Best Passive Income Model in 2018
On August 10th I drove to Chicago to meet up with 2 friends.
The following day we hopped in a car and drove 10 hours to the Upper Peninsula.
The next day we flew on an airplane to a remote island, Isle Royale National Park, where we hiked 50 miles in 4 days before driving all the way back home to civilization the following Friday.
During those 7 days when I was gone, I did no work.
- I didn't log in to my websites.
- I didn't create any new articles.
- I didn't even read my email.
But I still made $311 in passive income. Here's my earnings from that week where I was disconnected from the world.
What's Passive and What's Not?
There are a million ways to define passive income but I like to think of it as a spectrum. At one end of the spectrum you have truly hands off, passive income. And on the other end you'd have income that requires up front work, but can be left alone for weeks or months at a time and still earn money.
Starting with the 100% passive side of the spectrum, this would be something like dividend paying stock.
Once you buy a share of stock, you're done. You don't have to do anything ever again; you'll just receive automatic dividend payments.
Of course, the return for this is pretty low. Most people are excited to find stocks paying 3-4% dividends. So for every $100 you invest you'll make $3 or $4 per year. Ehhh....I don't hate dividends but that's not the best ROI.
On the opposite end of the spectrum would be something like an affiliate website.
This requires a lot of work and time to get up and running. This requires you to put in time and effort and is about as far away from passive income as you can get.
Leading up to my backpacking trip I was waking up every morning at 5:30 AM so I could write new articles for my websites and try to build up my traffic which would in turn bring in more money.
But once you've put in the work, you're done. You can sit back and reap the rewards.
Another perk of creating your own passive income streams is that you can control how much money you make. If you invest in dividends and want to make twice as much income next year, you have to buy twice as much stock.
But if you want to double your income on a website, you can just get more traffic. You can either do this yourself by writing more articles and building more links or hiring people to do it for you. You have total control over your income and can build it as large as you want.
My Increased Focus on Passive Income
I've talked pretty extensively about how I make money through selling physical products on Amazon and through running my affiliate websites.
During the last 6 months I've realized that selling physical products on Amazon takes significantly more work and creates a lot more stress compared to my affiliate sites. With physical products you have a lot of legal issues to deal with like collecting sales tax, filing LLC paperwork, clearing customers, and paying tariffs on top of dealing with the actual logistics of shipping thousands of pounds of products from China to the United States on a boat. It's a LOT to manage and takes mental energy.
My websites are a different story. There's no customer service to handle and nobody to answer to. I wake up and write about stuff I'm interested in. If I don't feel like doing anything then I'll just take a day off. Nothing burns down and I don't have to worry about unhappy customers complaining to Amazon and getting my account banned. The websites mostly run on auto pilot and I just check in to see how they're doing.
This is why I'm changing my strategy going forward to focus 100% on affiliate websites. I'm in the process of selling my Amazon business right now but haven't gotten too many interested buyers. If I can't sell it I'll just sell through my remaining inventory and be done after the end of the year. From then on I'll be 100% into working on my websites as I try to build up a passive income stream of $10,000 per month.
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And as a reward for sticking to the end of the article, here's a pic of me on Isle Royale (left), rocking the trekking poles 🙂
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