"Master Dayton" might be humorous, (I mean if Ph.Ds are called "Doctors," shouldn't MFAs be called "Masters?") but in all seriousness I have made a living freelance writing and after several years I have tons of information I want to share to help out my fellow writers, regardless of age, experience, goals, situation, or background. This blog isn't pretty-but it will help if real freelance writing information is what you want.

Monday, October 13, 2008

Writing Online for Money: Active Income Vs. Passive Income

Different Beasts: Active Income Vs. Passive Income

This freelance writing/making money online post is going to be a long one, because the subject of making active income online versus making passive income online is something entire books could be written on. In fact, there has been. When you're looking to make money online, there are many different ways to go about it, and this is even true of a niche like freelance writing.

First, some basic definitions: active income is the regular way most freelance writers get paid. You writer an article, you get paid, and then that's it. You might sell articles on Constant-Content or Associated Content and get paid once (although if you have usage rights you can ((and should)) recycle and re-sell these articles), or a few times if you re-sell these, but that's not the same as passive income.

Passive income is income that keeps coming in consistently from work you may have done a week, a month, or even years ago. Adsesne is easily the number one example of how to make money with passive income. A good niche blog that you write, rank well in the SERPs for, and then put Adsense on could be completely "finished" in say October, then continue to earn you Adsense money daily even though you don't have to put in any more work.

The idea of passive income is very appealing for obvious reasons. It is easier to make active income while freelance writing, at least if you need money immediately. If passive income was easy, everyone would be going that route. The thing about passive income is that you have to go into not only writing, but into Internet Marketing, if you want to master the art and science of passive income, and you're going to have to learn a lot and work your butt off to see any tangible results at all, much less start getting to the point where it is a consistent steady full time level of income.

As far as making an annual income, it is easier to write online for active income: following the old trend of writing articles, getting paid, then repeat. This is the model of work most people are familiar with since being a full time freelance writer means you probably planned on working every week, building the portfolio of clips, and treating writing as you would any other home business.

And if that wasn't what you were thinking when the idea of becoming a freelance writer started to sound appealing, be careful. It's not an easy job. Being a writer requires extremely hard work, long hours, a lot of work on your craft, tight deadlines, and the occasional four day weekend you can take on a whim is balanced out by the 18-20 hour days as you close in on a deadline.

And before I get angry e-mails, let me make one thing clear: passive income doesn't mean three months of work and then you're done forever. If you get big enough with enough sites, then your work load is certainly diminished, but it's still not the end all be all of everything going on. You will still need to collect back links, especially if you are in a competitive niche, you will definitely need to make sure to re-purchase your domain names every single year, and you will need monthly hosting to make sure your websites are up and making you income.

Aside from Adsense blogs, other common forms of passive income that are more common include affiliate sales (often Amazon, eBay, or other affiliate sites), BANS (Build A Niche Store) websites, and there is even some passive income with sites like Associated Content, where you still get paid for page views (traffic). While this won't ever be the same level of passive income as these other sites, and should never be assumed that it will become a full time income. I have about 200 articles on AC, and aside from the money paid in the past, I tend to get $20-25 a month even if I don't log on at all for months at a time.

Yeah, that's not a lot by any stretch, but I'm still getting a few hundred dollars a year for articles that were written up to three years ago. That's not a bad deal, especially since 90%+ of my articles on there have been recycled multiple times, and yet they still earn me money instead of staying completely unused in a file cabinet or long deleted Word file.

Websites like HubPages and Squidoo can also help build a good passive income. These sites tend to blur the line between Internet marketing and online writing for money, and both have some great advantages. If you're a beginner, I recommend both these sites heavily because they have great forums and communities where you can get help and support, and they allow you to learn your craft. It is much easier to get a Squidoo "lens" or Hubpage "hub" (both are basically one page websites) ranking higher in the search engine rankings than a blog or start from scratch website, and Squidoo will record every long tail keyword phrase that someone types into a search engine to find your website (VERY useful in learning how keywords and Internet search rankings work). Both let you design pages for free, and both give opportunities to make income.

While the income from both sites are generally modest, the top "Lensmasters" at Squidoo, like the very top "Hubbers" from Hubpages, make in excess of over $1,000 a month. Squidoo requires a lot more updating and maintenance than Hubpages, but both give you a chance to make money online writing, establish web pages you can use for backlinks, and learning the basics of getting traffic, making sales, and becoming comfortable doing so.

As someone who tends to be severely technologically challenged, I can attest to how helpful these two sites have been in helping me to learn how online commerce works and to get far better at online marketing than I ever was before.

Right now, I will openly admit that I am far better at normal freelance writing for money online than passive income with Adsense. Why? Because I didn't discover Griz's blog and the possibility of Adsense online until June. What has been encouraging to me is how quickly I have to learn on the fly from reading these blog posts, and yet without being able to put in the full amount of time I've wanted, I'm seeing consistent and amazing growth in my monthly Adsense income.

Does it take a whole lot of work? Absolutely. Are more people who want to become a freelance writer thinking about "active income" and writing job by job? Absolutely. That doesn't mean you shouldn't do both. Diversify. Write for rent and paying off debt and date money job by job now...and read the blogs of make money online experts and look at setting yourself up for the long term. If you want to learn how to be a successful freelance writer, then it makes sense to learn both

If you're a freshman in college reading this, you should be drooling. You have four years to write and save money (or have extra spending money or both) and you have four of the best years to work on setting up the passive income. If you're far better than me at computers and online stuff (and if you're a freshman at college it's almost a certainty you are) then who knows? Follow the advice of the experts and you might not have to find a job after college, because you might be set with your own business.

And just to help you avoid scammers at all costs, here's a list of make money online experts, the guys I'm learning passive income techniques from, and the guys all of you should be learning from:

The Keyword Academy Program

Internet Marketing with Courtney Tuttle

Blogging Zombie (Justin seems as nice a guy you could ever ask for advice)

Lissie's Internet Marketing Blog

That's it. There are groups of bloggers who argue back and forth about what's scamming and what's legit, and it's pretty easy to get taken in. But what these four guys teach is invaluable, and these are the best of the best who (amazingly) share tons of knowledge for free, so eat it up!

If you are learning how to become a writer and how to get paid for writing online, the active writing isn't hard. If you want huge money writing, learn about passive income from these guys. I'm seeing enough results from my own work to know I'm catching on and the consistent growth in earnings tells me all I need to know: these guys are for real. Even if you're a writer not interested in marketing, it's good to learn from what these guys have to teach.

Earning active income online is easy, and I'm not going to go into it nearly as much for that reason. The other reason is that I've already mentioned making money on Associated Content & Constant Content in another post, and more posts will be aimed specifically at the people looking to become online freelance writers for sites like Guru & Elance, Constant-Content, and Associated Content. There's a lot of money to be made online, and I want this blog to be especially focused at helping brand new freelance writers get going. Those first dollars mean the world to the writer who makes them for the first time, and I hope this blog can contribute to many future success stories.

Good writing, and keep up the hard work!

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