The key to Becoming Financially Free is a simple equation: monthly passive income greater than monthly expenses equals Financial Freedom.
The path to freedom, however, is not a straight line and often requires navigation between different monetization strategies.
In this context, a key question becomes: What is the best way to earn active and passive income online?
For years I thought I had the answer, but after experimenting with different online revenue models, I have come to one conclusion: The best way to earn money online is not from one source but from multiple sources.
In other words, build a diversified online income portfolio.
Why multiple income sources are so important, you ask?
Well, imagine of the following scenario. You own a site that that is solely monetized by affiliate commissions. One day your affiliate partner decides to change their commission rate. The next day your online income drops by 75%.
Or perhaps you've had a site monetized by advertising that once ranked high in the search engines, only to find it knocked down by a Google algorithm update a few months later. Your online advertising income can potentially drop to zero.
You get the point.
Without some diversity in your online income source you are living at the risk of having "all of the eggs in one basket."
And that can hurt.
So if you have ever wondered what monetization models you should pursue for your financial freedom journey, diversification is the way to go. One step at a time...
Below I have put together a comprehensive list of the top Ways to Earn Money Online, both actively and passively.
I included active income (e.g. money traded for time) and not only passive income as it's often the easiest place to start and another option to diversify.
Now, a word of caution before we continue: Some of the online income sources presented here can be implemented fast, but that doesn't mean that they are fast money making methods. Earning money online requires hard work, dedication, and a willingness to invest. You need to possess the courage to try, to fail, and then to try again.
With this in mind, here are some of the best passive income streams and ways to earn money online
Online Income #1: Selling Your Services
Selling services online is probably the most popular revenue model on the internet for the simple reason that it is fairly quick to implement.
This can be a good place to start from and a great way to earn supplemental cash or even a full time income.
Examples of services you could provide may be to edit a video, write an article, design a flyer, or perhaps create a unique voiceover – just about anything can be sold via the internet these days.
Here are the top ways to earn online income in this category.
1. Sell your services on your own website
If you have a specific and in-depth expertise, like programming, coaching, or consulting, then having a well written sales page on your own website can be rewarding. I do this with my web design, SEO, Social media, and coaching services. If you want to become a highly-paid freelancer, I highly recommend you first build your own online platform so you can share your professional expertise, knowledge, and life story with the world. Here's how to start your first website in less than 24 Hours.
2. Sell your services on Fiverr.com
Fiverr is a big online marketplace offering tasks and services beginning at a cost of $5. Don’t be fooled though, you can make a lot more on Fiverr than just $5. There are people on Fiverr that charge hundreds of dollars for their services. If you're interested in making some side income from time to time, Fiverr could be a great place to start.
3. Sell your services on Upwork
Upwork is the leading platform for online freelancing work, where businesses connect with independent service providers (like yourself) to get work done. I personally use Upwork for hiring; it has never let me down and I always end up going back to it.
4. Sell your services on Craigslist
We usually think of Craigslist as a place to buy and trade random stuff, but Craigslist can actually be a great opportunity to sell your services online to an active and engaged audience. Simply check the “jobs” section and “gigs” section for specific cities and see if anything matches your skills. The great thing about Craigslist is that it is one of the highest converting traffic sources on the internet (think active buyers) which can mean more opportunities at higher pay.
5. Sell your services on Guru.com
Similiar to upWork. If you’re just starting and have no solid track record, Guru allows you to submit premium proposals so your services can show up first on the list which can be very beneficial .
Online Income #2: Online Advertising
Advertising income is one of the simplest ways to earn money on the internet, especially if you have yet to earn your first passive income online.
But although simple, it's not necessarily easy. Don’t expect to make substantial revenue if you're just getting started. To do that, you'll have to learn how to drive a lot of traffic to your site.
Here are the top ways to earn online income in this category.
With Google AdSense, you can earn passive online income from your website by showing ads that are relevant to your visitors. The great thing about Adsense is that Google does most of the hard work i.e., they find the advertisers, pick the ads, track the clicks, and even deposit the earnings straight to your bank account each and every month. No wonder that 65% of the top 200 websites that show ads use AdSense.
Similiar to Adsense, Media.net powers the Yahoo! Bing Network Contextual Ads and is probably the second largest contextual advertising company in the world. I've been running some Media.net ads for a few months and the income was very similiar to adsense. Bear in mind that their approval process is a bit more extensive than Google AdSense. -One has to get a certain number of page views monthly to get an account with them.
Similar to AdSense and Media.net, Chitika claims that their ads perform unlike any other. However, after a few months I switched to Adsense as I could not see the difference. In many cases, the pay per click was lower.
4. Target your own advertisers
Using ad networks like adsense doesn’t prevent you from targeting advertisers directly. In fact, that’s how I started; I searched the net for potential advertisers who advertised products relevant to my content and offered them yearly packages. If you choose this option, bear in mind that you’ll need to provide traffic reports and other site statistics.
Online Income #3: Online Courses
Creating an online course is another good way to leverage your time and effort by teaching something once and get paid for it over and over again.
The great thing about online courses is that they’re usually perceived as more valuable than eBooks, mainly because they can offer multimedia content such as video and audio - not just text. Moreover, as course creator you have the option to offer support, guidance or coaching as part of your course, which adds even more value.
With this in mind, here are the top ways to earn online income in this category.
Udemy is the world’s largest marketplace for online courses. The great thing about udemy, beside the high traffic they generate, is a non-exclusive agreement which means that you can sell your course on other portals and/or your very own site.
Bear in mind, that Udemy recommends that the majority of your course content will be featured through video. If you're intimidated by the thought of producing high quality videos or don’t know where to begin, you might be interested in this solid Udemy course.
2. Host your Online Course On your Own Website
Many people choose not to take this route because they get intimidated by complex applications and technology. The truth, however, is that you don’t need a fancy platform or special software to create a powerful online course. Your lessons can be sent out as emails, followed by action plans and/or video tutorials. This approach can be even more effective as most people check their email on daily basis. In fact, that’s the exact approach I took with some of my freedom eCourses.
Now, if you choose to deliver part or all of your course in video format, you can use professional video hosting sites like Wistia or Vimeo. Beside giving you the option of removing the hosting company’s logo, these services also provide analytics which can show you how effective your video is at holding your audience’s attention. Alternatively, you can use litmos, a learning management system that enables you to create an online course with your own branding, domain name, and landing page. There is no percentage cut taken from your revenue like Udemy. Instead there is a monthly fee for their service.
Skillshare is more of a social learning platform where you can teach real-world skills. The range of skills that you can teach is only limited by your imagination - from board game strategies, garment construction, cooking tutorials, travel hacking, and relationship tips. I even saw a course on how to build a grown man's wardrobe. Creating a class on Skillshare is free. For each student who enrolls, Skillshare takes a 30% fee (Similar to Udemy). You are also provided a unique teacher referral link that lowers the fee to 15% for students who enroll via your referral. Note that all online courses on Skillshare go through an approval process based on specific criteria.
- This is more for the experienced online entrepreneur who already has some authority in his or her niche. If that’s your case and you’re interested in becoming an instructor in CreativeLive, the world’s leading live online classroom platform, you’ll want to email them your proposal. This includes what you would want to teach, links to any websites with your work, social media sites or video of you leading instruction. If you’re just beginning, this is great goal to aim for.
Online Income #4: Revenue Sharing
Revenue sharing sites give you the opportunity to earn money online without having a website or a product to sell. If writing is your hobby, for example, then you can earn extra income by writing high quality articles and submit them to different locations on revenue sharing sites. I must admit I’ve never tried it, but I wanted to get it out as it can be a viable option to get started with.
After reviewing dozens of sites, reading writer’s testimonials and numerous blog comments, here are the top ways to earn online income in this category.
1. Hub Pages
- HubPages.com is a content community for writers. Members (referred to as "Hubbers") are given their own sub-domain, where they can post content rich articles (known as Hubs). As a Hubber, you earn revenue primarily from Google AdSense (you need your own Adsense account) and other advertising vehicles such as, Kontera, and the eBay and Amazon Affiliate programs. There is a 60:40 revenue split and it’s achieved by alternating the code used in advertisements: Your code will be displayed 60% of the time, and HubPages' code 40%. Same as Squidoo, traffic dropped heavily due to Google's changes but the site is still wildly popular. Currently it’s one of the 500 most visited US sites on the Internet.
Some writers favor Infobarrel over the bigger Hubpages because Infobarrel’s earnings program lets you keep a majority of the money that your articles earn. Currently, as a publisher, you are entitled to 75% of the revenue generated from the display ads on your articles. In the past these ads were paid out from Adsense and other advertisers but because not everyone can get a Google Adsense account, Infobarrel now pay directly to writers. All you need now is a PayPal account which can be an advantage if you are just starting out. Also, InfoBarrel forums have a regular thread entitled 'InfoBarrel Earnings Reports’. You might want to check it out if you’re wondering how much money other writers on this site make. The last time I checked, the numbers were fairly low.
Online Income #5: Affiliate Marketing
After having spent close to a decade earning income through affiliate marketing and other partnership methods, this is one of my favorite ways to generate income online.
The idea behind affiliate marketing is fairly simple - you earn money online by promoting the products of another company for a commission on each sale you make. So in theory, all you have to do is partner up with affiliate programs, get their affiliate links, and start promoting them everywhere.
Simple, right? Well, the idea is simple but there's much more to it than just posting affiliate links on Facebook, twitter or your website.
You see, you might make a sale or two but if you’re looking for consistent income you’ll need to approach it strategically and build a trusting relationship with your audience.
In that regard, I highly recommend you build your own email list. By building an email subscriber list using a service like AWeber, you’re essentially creating a list of people that trust you and want to hear about your affiliate products' recommendations. Check out my free course on how to build your subscriber email list if you want to learn more about it.
With this in mind, here are some of the top ways to generate income in this category.
1. Promote Clickbank products
It is probably the biggest digital products marketplace online. Clickbank uses a very helpful measure called ‘gravity’ to represent how well a product sells, based on how many sales have been made and how recent these sales were. There’s one thing you want to be aware of though! ClickBank will withhold payment of any balance until an account shows a minimum of 5 sales using at least two types of payment methods. Not only that, if you made a sale but had no earnings for an extended period of time, your account will be subject to an ongoing penalty. This means that your affiliate earnings can potentially drop to zero. Nowadays, I rarely promote Clickbank products.
2. Promote Amazon Products
Amazon affiliate program is a great way to promote physical products through a reliable, trustworthy, and well-known online store. The fact that everyone knows Amazon is probably their biggest advantage. On the downside, commissions are fairly small - they start at 4% for most products and can go as high as 8% depending upon how many sales you make. However, when you send someone to Amazon, you earn a commission on whatever they buy within 24 hours of clicking your link, whether they end up buying the product you promoted or not. So, for example, if you promoted a book but the person you sent to Amazon ended up buying an expensive camera as well, you’ll get the commission for both the book and the camera. This can add up.
3. Promote Commission Junction Products
Commission Junction (CJ in short) is one of the oldest, largest affiliate networks out there. Most of the merchants in CJ are well established which can be an advantage if you’re looking to promote bigger brands. Another advantage of using CJ is that besides the typical Pay-Per-Sale offer, you can also find Pay-Per-Lead and other type of offers.
4. Promote DigiResults Products
This company mainly focuses online business and internet marketing products, but there are also other products ranging from health and fitness to travel. One of the great things about DigiResults is that both vendors and affiliates get paid at the point of sale, and not a month or two later like most affiliate marketplaces. I’ve been using their system and so far it’s one of my favorites.
Online Income #6: Quick Online Income Perks
This category includes a variety of methods with one thing in common: getting paid for doing (very) simple tasks online.
I personally haven’t tried any of the below methods so I can't speak from experience to how they work. In my mind, the most lucrative way is through building a REAL business online and providing your visitors with great value. However, after some thought, I decided to include these here because, quite often, the biggest roadblock for many is a mental one: believing that making money online is possible. From my experience, once you have made your first dollar, or even your first cent online, the world is suddenly a different color.
With this in mind, here are some of the top ways to generate income in this category.
The idea behind cashback is simple: you get rewarded for purchasing or using products you plan to buy anyway. Cashback sites pay you when you click through them, go to retailers, and spend. For example, check out eBates.com - There are over 2,000 stores to choose from including Walmart, Target, Sears, Calvin Klien, and others. You also get a $10 gift card after your first $25 purchase. Sign up is free. (If you encounter a cashback site where it’s not, avoid it.
2. Taking Surveys
There are hundreds, if not thousands, of websites offering users the ability to get paid for taking surveys online. Same as with Cashback sites, if you encounter a survey site where sign up if not free, simply avoid it. I have not checked it myself, but a few online entrepreneurs suggest trying toluna.com. Also, you might want to try Cash Crate - In addition to getting paid for taking surveys, they offer cachbacks and other quick online income perks.
3. Answering Questions
If you're an expert in your field, you can generate income by answering people’s questions online. Just Answer.com, for instance, allows you to join their team of experts and serve a customer base of more than 20 million people. If you’re a travel expert, check out flightfox.com. They have great reviews and positive commentary pretty much everywhere.
4. Writing Reviews
Get paid for reviewing products online. These days, companies are willing to pay for your opinion, especially if you have a well established blog or other online presence. Check out Expo TV, for example; it allows you to earn income for doing video reviews on products you own.
Online Income #7: Selling eBooks
If you do it right, eBooks are quite a lucrative passive income stream. Yes, it takes some time and effort to research and write a good book, but done well, eBooks can sell over and over again for many years.
A key aspect in this regard is to take a strategic approach to writing and marketing your book. You see, one of the biggest mistakes you can make is to assume that "if you make it they will buy it”. So, spend the time, do your research and, find a strong need in the market - it will pay off.
With this in mind, here are two of my favorite ways to generate income in this category.
1. Sell your eBook on Amazon
Amazon.com is the biggest online eBook retailer out there by a long shot. In fact, Amazon claims to generate around three-quarters all eBook sales via their website. With these numbers, it's obvious that Amazon represents an exciting opportunity for self published authors to release and market their eBooks.
Personally, my experience with Amazon thus far has been good - a few of my short eBooks generate steady passive income on weekly basis with zero additional effort from my side. One thing to note though - Amazon pays 70% royalty on each eBook sold only if your eBook is priced between $2.99 to $9.99. Less than or higher than that pricing structure, the royalty decreases to 35%.of your book’s listed price.
2. Sell your eBook on your own Platform
There are a few advantages to taking this approach. First, you get close to 100% of your listed price (minus the transaction fee of your preferred payment gateway). Second, you are not competing with other authors and have the reader’s attention solely on your product. Third, selling your eBook on your own platform is a great opportunity to build a long term relationship with your readers via email. Fourth, you can bundle your eBook with other goodies in order to bump up the value and make it more unique. With so many advantages, it's worth putting up the time and start building your own platform.
Online Income #8: Selling physical Products Online
Earning money online is not only limited to the digital products. In fact, selling physical products you own, and don’t necessarily need, is often the best way to kick-start your online income journey.
During my own financial freedom journey, I sold everything I no longer used or needed on eBay. The extra few thousand dollars I earned was used to build new passive income streams and helped me to move one step closer to my dream.
You can even go further with this and make a living out of it by buying wholesale products and selling them on as Powersellers. There are quite a few marketplaces existing online. Here are the top ones:
eBay is, of course, the biggest and most popular auction and shopping site out there. You pay a small insertion fee to list your product (starting from 10 cents) and a small portion of the selling price (10%) if your item sells. Currently, insertion fees for your first 50 listings per calendar month are free. Also, if you are planning to sell on regular basis, you may want to consider setting up an Ebay store. Among other things, this will allow you to list your products at reduced rates.
Craigslist is not as ‘feature-rich’ as eBay but it’s easier and quicker to use. You don’t even have to “join” to list something for sale, however there are some advantages to “joining” including being able to keep track of your posts and repost your product’s ad. And best of all? It's totally free.
3. Fulfillment by Amazon
FBA is one of the most lucrative ways to sell physical products online. All you need is a product to sell, and Amazon takes care of the rest - packing, logistics, customer service, etc. Of course they’ll charge a percentage on your sales, but compared to setting up your own shipping, warehouses, customer support, etc, it’s definitely worth it.
Online Income #9: Selling Other digital products
Selling online is not only limited to eBooks or physical products. There are quite a few other digital products you can sell. Here are two ideas:
1. Selling websites and domain names
One of the great parts about the online world is that a website and its domain name is like real estate - It can go up in value over time. In fact, sometimes just the domain name without the developed business can be worth quite a lot to some people. Of course, like almost anything mentioned here, the necessary know-how is required. If you’re willing to put some time into it, then you can earn a nice online income. So far I sold 4 domain names with an average price tag of a couple of thousand dollars. Nice income, considering I bought each domain for around $10….If this income stream interests you, check out flippa.com - It’s one of the best marketplaces I know for selling websites or domain names.
2. Sell photos
Selling your photographs online can provide a small but steady stream of passive income. Sites like Shutterstock, iStockphoto and Alamy, accept all sorts of high-quality images and then sell them for a certain royalty fee. I have not tried it myself but one of my good friends seems to do quite well with it.
Online Income #10: Membership Sites
A membership site is a website that has a protected member-only area. In other words, access to some or all of the content on the site is restricted to registered members only.
Creating a membership site is a powerful way to generate online income and scale a service-based business. By having members pay a monthly (or other periodic) fee to get access to a password-protected area where exclusive content is made available, you can transform a site into a RECURRING income-generating business and bring a regular flow of income from the same customer base.
Members, on the other hand, can enjoy a relatively lower price than what the full product would cost if sold as a whole. Now that's a win-win business model, isn't it?
Another benefit, which many online entrepreneurs do not even consider, is that you don’t need to create the whole product before launching it. You only need to create a small portion of your actual content, and complete it only after you get your first member during his membership - that means you get paid IN ADVANCE of actually creating your site content. It also means that you can modify your content based on LIVE feedback from paying customers. More importantly, this is a great way to VALIDATE your site and ensure you create a product based on what customers want, not just what you think they want.
You see, the biggest risk in developing a new product is not related to how it’s designed or written... The risk is spending months developing something that customers don’t really want.
Online Income #11: Software
Software is one of the most lucrative passive income streams but most online entrepreneurs shy away from it, mainly because of the technical aspect that is involved. The truth is that you don't need programming skills to build a software; the whole process can be outsourced fairly easily. You do need to know how to pick a good developer and, of course, have a winning idea that customers are willing to pay for.
With this in mind, here are two great ways to generate income in this category.
1. Subscription Web Based software
This is one of my favorite business models. Subscription based software allows for attractive recurring revenue that is passive in nature. Moreover, the software you develop does not have to be expensive or feature-rich to be successful - A small tool that solves a big need can be just as profitable. Here's an example of one.
2. Release an app to the App Store
While building apps for Apple (or Android) mobile devices can be a lucrative way to generate passive income online, it's not as easy as many people make it seem. Beside the fact that it’s hard to get your app noticed among the millions being released every year, most people expect apps to be either free or very inexpensive. In fact, a recent study found that only 11% of apps are paid for. The number of paid apps will only decline over time as more players join the market. The key, like many of the business model mentioned here, is to be strategic and creative from the very start. There are a few ways to monetize your app and keep it free for users. Examples include advertising, premium services, and sponsors.
What about you?
Diversification is key but from my experience it’s best to focus on one area at a time. That way you could devote yourself entirely to each area and have a more action-centric focus.
In fact, none of what is written here really matters without you taking ACTION.
If you want to take full advantage of the new opportunities our online world offers, you must be willing to put in your time, your energy, your effort and loads of your commitment.
The possibilities are endless-- literally! It has never been more affordable in human history to start a business.
So, no more hesitation. Your "one day" is now! Pick the income stream that you feel is the right one, and immerse yourself in it!
P.S While there are dozens of ways to earn income online, I believe the most lucrative way is by building your own online platform and providing your visitors with real value. Here's how to start your first website in less than 24 Hours.
...even if you don't have the skills, capital or a website.
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Serious about becoming financially free and looking for better results? I do take on coaching clients from time to time but only if there's a good match. Read more about my one-on-one program here