I recently earned a commission through a sale (that came from my review of) of Paul Cunningham’s How to Be a Successful Freelance Blogger e-book. On the surface, I made money through a link on my website, while somebody else wrote a great e-book. You got to love passive income, right?

Not so fast, folks! I didn’t just randomly drop a link for Paul’s book. I bought it myself, because hey- the title and the content really appealed to me. I read, re-read and studied the book. His content went into 3 categories for me: 1) stuff I already knew and applied, 2) stuff I knew yet I needed to be reminded of to apply, and 3) stuff I learned from him.

So in addition to keeping this e-book near to serve as a guide at all times, I wrote a review and then posted on my blog. Then, I promoted the post. Then, I promoted the blog. Then, I kept promoting the blog, because when you have a blog, you have to keep promoting it.
So, while passive income is one of the most attractive terms of making money online, trying to make it happen is definitely not a passive activity. Passive income streams do not get formed overnight and it usually takes a lot of time and effort, until you start making money “passively”.

Some of the most popular (passive) income streams:

– Revenue from your web writing:

Content Farms: The concept almost all writers hate: When you first start out, you only make a few pennies. The more articles you publish, the better chance you stand at getting more page views and ending up making more money. But writing for the web is not a passive activity, especially if you want to make the most of your material. You write, edit, format, optimize, publish and promote. As more content is published, you will realize that your earnings are increasing.

– Writing for other blogs & websites: While many writing jobs pay by post, some offer an additional revenue share bonus (where you get a percentage of their advertising revenue), and/or a popularity bonus which grants you extra bucks if your blog reaches a certain traffic/bookmarking level, etc… So when you are supposed to get a revenue share, it helps if the blog you write gets extra traffic. Oh, and to reach a level of popularity, you need to promote it yourself.
Supposedly, you sit back and watch your revenue & popularity grow. In reality, a post hardly makes it very big without any effort from your end. And remember, it is usually also up to you to create that great content, optimize it for the search engines, and then let the world know about it.

Affiliate Marketing:

Making Money through Other People’s Products (& Services):
Sometimes, making money from affiliate marketing can be as simple as leaving your own affiliate link in an article. But not everyone who reads that article will sign up. Also keep in mind that some affiliate sign-ups or clicks don’t make you any money, unless there is a purchase involved. So not everyone who does click will make a purchase, no matter how popular you and your articles might be.

You need lots of readers, and many readers that will take the necessary action. In order to make the article popular, you need to reach your target audience. You need to make the necessary research to know where that target audience hangs out and hopefully develop a relationship with them. So after these conditions are met, maybe you will start making passive income from those affiliate links, products and services. Until then, a lot of effort awaits you. You might even need to spend money too, for marketing, hosting, autoresponders and other related activities.

Making Money through Your Own Products (& Products): Don’t even get me started on how much work goes into creating & promoting your own product. Yes, it is the favorite income stream of many probloggers. But this time you are not an affiliate. You have to have your own sales page, e-mail list, your own affiliates, money you pay to the merchant site (such as e-junkie), the relationships you manage with the other people who become your affiliates, relationship with your customers and paying your affiliates…The list of your tasks goes on.

If you create a great product for the right target market, and make a good job marketing it, it is true that you will make a good deal of money. You will also work very hard. And then you will work some more.

– Advertising:
Placing advertising on your website or blogs is a great way for making some passive income. However in order to make money from advertising (direct advertising, PPC, CPM, banner advertising….) from your own sites, or from the sites you share the revenues of, you need to have an audience. You need to have a large enough audience to be able to make money from ads, and hopefully that audience will be targeted enough to click on some of them.

And building an audience is a lot of hard work. It takes social networking, link-building, guest-blogging and/or many other actions before you can even reach the payout level of your advertising networks or your sponsors.
While watching that advertising income to grow might be passive, it takes a lot of activity to get to that point.

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Yes, it puts a smile on your face to watch your advertising revenue grow, and to see your affiliate income increase. It is also nice to make money from articles you posted on the web months ago. But it doesn’t happen overnight. However, what makes passive income really attractive is that you can see that you made money from something you promoted (and then forgot about) some time ago. The truth is, the pros of passive income overweigh the cons. Just keep in my mind that you are not going to be very passive in the process.