Your Passive Income Blueprint

Lately I’ve seen a lot of people, some of them friends, do some really dumb things in an attempt to earn more money. They buy into lame money-making programs, join and promote useless get rich quick schemes, and fall prey to scammers.

The common pattern is always the same — they’re focused on trying to make more money. They make it their top priority. They think about it constantly. But they keep getting sucked into trying to make money without providing any real value, and it’s unsustainable.

In the end this sort of thing eventually self-destructs. The only way to succeed with it in the long run is to find lots of suckers and basically rip them off in order to enrich yourself. Most people have a strong enough moral resistance to this sort of thing that they’ll sabotage themselves from going too far with it. This isn’t a path of long-term abundance. It’s a path of scarcity.

As a general rule, the people I know who are most focused on trying to make more money this year are doing worse, not better. In some cases they’re doing much worse. A few have lost or are in the process of losing their homes.

The exceptions are those that are able to sufficiently kill their conscience, so they can remove any incongruencies about ripping people off. But again, this is a pretty rare exception. Most people would rather deal with scarcity than knowingly rip people off to get ahead, so they just make the bare minimum to meet their needs and avoid getting ahead.

The Smart Approach to Making Money

There is a smarter approach, however.

Instead of focusing on trying to make more money, put your time and energy into CREATING and DELIVERING real value. Find a way to give people what they want and/or need.

Take note that the keywords here are CREATE and DELIVER.

Creating value means expressing your unique talents and skills in a way that can potentially benefit others.

Delivering value means ensuring that other people are actually receiving and benefiting from the value you’ve created.

If you don’t do both in some fashion, then it’s going to be hard for you to generate sustainable income, especially during a recession. I’ll explain why.

If you only create value but don’t deliver it, then your value isn’t being received by anyone. So how can you receive value (such as money) in return?

I see this problem a lot with creative types such as would-be artists, musicians, and writers. They may spend lots of time honing their craft, but if they don’t actually get that value into the hands of sufficient numbers of people, they struggle financially, and this hurts them creatively too. A goodly number of these people are currently seeing their homes in foreclosure now.

The sad thing is that some of these people work very hard. But they spend too much time creating and not nearly enough time delivering. They watch people they consider hacks pull ahead of them. The hacks may not be as good on the creative side, but at least they’re getting their value into people’s hands, and on some level people are appreciating their work.

I went down that road myself. In the late 90s, I went bankrupt, even though I was working very long hours and creating a lot of potential value in the form of a computer game my company was developing. My problem was that I didn’t do a good job of getting that value delivered. I relied on publishers to do that, and for various reasons the game was never released. That resulted in years of wasted effort, aside from the valuable learning experience that is. So I know where this road leads because I traveled it.

On the other hand, if you only deliver value but don’t create it, then you’re delivering someone else’s value. This isn’t a terrible approach in the short run, but it’s a short-sighted long-term strategy if this is all you do. There’s nothing particularly special about delivering other people’s value. Anyone can do it. Anyone can sign up for affiliate programs or join an MLM program or become a reseller. If this is your primary means of generating income, your long-term outlook is weak. The better this works for you, the more it will draw competitors into your field. Eventually everyone will be working harder and harder for scraps. This happens all the time. This strategy can be especially weak during a recession, as more people turn to less expensive sources for the same value you deliver, squeezing your profit margins thinner and thinner.

Bloggers fall into this trap when they rehash other people’s content and don’t really have anything unique or compelling to say. A year later their niche is flooded with competitors doing the same thing. And hardly anyone is earning decent income from it.

The most viable long-term strategy is to create AND deliver value. You can mix and match other strategies with it, but this should be your primary method of income generation. If you get good at creating and delivering value, you can basically write your own ticket and enjoy lots of abundance.

A Choice of Mindset

I know a lot of people are dealing with financial challenges these days. Las Vegas is basically the foreclosure capital of the USA right now. I know people who’ve lost their homes. I see “bank owned” signs all over the place.

If you’re going through something like this right now, I totally empathize with you.

However, I have to point out that the pattern of what causes this is so clear, it’s getting a bit ridiculous to see it play out over and over again.

Generally speaking, people who CREATE and DELIVER value are doing just fine. In fact, I’d say most are doing better, not worse. Many of these people are seeing their incomes go up during this time.

People who don’t CREATE and DELIVER value are seeing their finances grow progressively worse. This leads many of them to panic, so they head even further away from creating and delivering value (such as by chasing lame money-making schemes), which only quickens the decline to insolvency.

I know it seems logical that if you’re seeing your finances decline, then you should focus single-mindedly on trying to make more money as quickly as possible. People fall into this trap all the time. I used to fall for it too. This is absolutely the wrong strategy though. I know that must sound counter-intuitive.

The correct strategy is that when you see your finances decline and you want to increase your income, then you need to focus on CREATING and DELIVERING more value. If you do that, then you’re doing the very thing that will generate a sustainable income increase.

What is money? Money is simply a medium for exchanging value. Money is what you receive in exchange for the value you create and deliver. If you can increase your outflow of value creation and delivery, you can increase your inflow of money received.

If, however, you try to increase the inflow of money without increasing the outflow of value, you’re trying to get something for nothing. This approach is untenable and will ultimately collapse. Please don’t waste your time on it.

I actually figured this out right around the time I was declaring bankruptcy. I was totally broke, yet I found a way to focus my energy on creating and delivering value instead of on trying to scrape together more money. Within about six months, I was back on my feet financially, and year after year my financial situation just kept getting better. I started on this path about 9 years ago, and I’ve maintained a nice positive cash flow every year since then.

I know that when you’re in a financial crunch situation, six months may seem like a long time. But it doesn’t matter if it takes you several months or several years to get in the habit of creating and delivering value. The time is going to pass anyway, and this habit will serve you well for life. Be patient and get started. It doesn’t matter what happens to the economy — if you keep creating and delivering value, you’ll do just fine.

Turning Value into Income

So how does one generate income from creating and delivering value? Can’t you run into a problem of creating and delivering lots of value and making no money from it?

As it turns out, making money is the easy part. If you can create and deliver value to people, the income opportunities will literally come to you. People will practically line up with ways for you to make money. I’m serious.

Here’s how this works.

If you get good at creating value, you can connect with other people who are good at delivering value. They deliver your value, such as by selling it, and they pay you a royalty, commission, or licensing fee.

Now suppose you get good at delivering value. In this case you can generate income by plugging other people’s value into your delivery system. For example, my blog is great at delivering value. It’s a very efficient medium for that. But since I give my value away for free, it doesn’t generate income directly. However, I can generate plenty of income by promoting other people’s products that I like. Then I split the profits from sales with the publisher. I earn six figures a year just from doing that. The product publishers come to me. I get way more offers for this sort of thing than I can handle. It doesn’t require a lot of work to do this. Once you have a system for delivering value, you can plug other people’s value into it and generate lots of extra income.

If you have the means to create AND deliver strong value, you’ll have so many opportunities it will be totally ridiculous. First, you can plug the value you create into other people’s delivery systems, so you can earn ongoing royalties and such. This is easy residual income. I’m still getting checks every month for deals I entered years ago.

Secondly, you can plug other people’s creative value into your own delivery system. You pay them a royalty on the sales, or they pay you as an affiliate. Once again you generate ongoing residual income. As long as you’re selective about the products you promote, doing your best to ensure that they provide strong value, everyone is happy, and everyone wins.

Thirdly, you can plug your value into your own delivery system. Strangely, this is something I haven’t done yet with my blog, although I used to do it all the time with my computer games business. This is something I intend to explore in 2012. It simply means that I could create and sell my own products direct. Many other bloggers have already done this with great success, releasing e-books, audio programs, DVDs, etc. They create the value and sell it directly to their visitors.

Avoiding Distraction

Once you develop the habit of creating and delivering value, it’s pretty hard to fail. However, it’s very easy to get distracted along the way. Distraction is perhaps your biggest obstacle.

Genuine opportunities are based on creating and/or delivering value. If you see something that looks like a new opportunity, and it doesn’t require you to create value, and it doesn’t require you to deliver value, then it isn’t an opportunity. It’s a total waste of your time.

Is creating and delivering value harder than getting a job? I would say no, not at all. Having a job is a lot harder. With a job you still have to provide some form of value usually, but all the residual benefits you produce turn into residual income for someone else. So you’re already doing most of what needs to be done, but you aren’t enjoying any of the benefits. In the long run, you’ll probably have to work much harder if you have a job, but the bulk of the rewards will go to someone else. On the one hand, that’s generous, but on the other hand, it’s quite dumb.

I could get a job as a writer and get paid a certain amount for each word I write. But then someone else owns my work, and all the residuals from that work go to them. Alternatively, I could write articles for my own website and retain the freedom to republish them as books someday, use them to generate traffic (and thereby income), license them for various publications, use them to promote my book, etc. The correct strategy is a no-brainer really.

Trying to make money is itself a distraction. When you focus on making money, too many things will catch your eye. You’ll run around like a chicken with its head cut off, chasing down all sorts of things that look like opportunities. You’ll waste a lot of time and energy if you chase dollars.

Creating and delivering value is simpler. This focus is well-aligned with truth, love, and power.

When you create and deliver value, you can be open and honest about what you’re doing. You get to spend most of your time doing stuff you’d naturally enjoy. It’s pleasurable to hone a craft you’re passionate about, whether it be writing articles, composing music, or planting gardens. It’s much harder to do boring, non-creative work day after day. It’s also very empowering to share your value with others and to see that you’re making a positive difference in people’s lives.

Once you make a habit of creating and delivering value as your primary career focus, you won’t want to go back.

There’s More to Life Than Money

Of all the things I do as part of my “work,” making money plays only a small role. Despite having written some popular articles on the subject, I spend little time thinking about money these days.

I don’t even bother to set financial goals anymore. That seems totally pointless to me.

Sometimes months go by, and I don’t even know how much money I’m currently making. I just know there’s always plenty and that I’m earning more than I’m spending. The gap is wide enough that I don’t need to do any special budgeting or fussing with figures.

The reason this works for me is that I focus on creating and delivering value. I know that as long as I keep doing that, I don’t have to do anything special to try to make money. New opportunities just keep showing up. It’s not that difficult to maintain.

I remember when I was at a conference a while back where Dr. Wayne Dyer was speaking. He said that people would come up and say, “You know, Dr. Dyer. Some people say you’ve made a LOT of money.”

Dr. Dyer’s response was, “They would be right.” 

He went on to say something along these lines: “It’s not my fault! I just keep doing what I’m doing, and there’s always plenty of abundance there.”

At the time it was hard for me to relate to this mindset. It seems a bit too unrealistic and exceptional. But still… I wondered what it would be like to live at that level, where you could just assume abundance and it would be there for you. No striving or struggling. It took a few years, but I’m finally grasping what that sort of mindset feels like.

I’d say it’s not really a complete mindset by itself though. I doubt very much that Dr. Dyer focuses a lot of attention on trying to make money. I think most of his attention is elsewhere, wrapped up in the material he writes about. And that’s exactly where it should be.

Having written about two dozen books, it’s safe to say that Dr. Dyer has internalized the concept of creating and delivering value. I have it on good authority that his books sell quite well too.

This whole abundance mindset might sound really annoying if you’re dealing with financial scarcity right now. I can totally relate. I’ve been there, and I’m sure I’d have been equally annoyed if someone said this sort of stuff to me back then. I’d have been vehement that making money was NOT easy because I tried very hard to do that and failed big at it. Ironically the real problem was that by focusing on making money, I was making a huge mistake.

The key is where you focus your attention. If you focus your attention on making money, I can virtually guarantee that you’ll have a long and difficult road ahead of you, filled with setbacks and disappointments. If money is really what you seek, good luck with that. All you’ll do is give more and more of your power away, and you’ll end up living a pretty empty and shallow life.

Another corrupt form of thinking is to focus your attention on attracting financial abundance. Law of Attraction promoters often present this as a good idea. I once thought it was a good idea too. Now I realize it’s a dead end. It will just run you in circles. The irony is that in order to enjoy real financial abundance, you want to be thinking about money as little as possible.

I know it sounds like focusing on money is the right idea. I assure you that it’s a mistake. If you need to take several years to figure that out the hard way like I did, be my guest. But you’ll be really pissed that you could have saved yourself all that trouble if you simply let these ideas sink in a bit deeper. I hope that on some level what I’m saying strikes you as common sense. But I know I’ll be getting emails five years from now from a few people who went the other route. I hope you aren’t one of them.

Try to recognize the truth that focusing on CREATING and DELIVERING value is the smarter, more sane approach to long-term financial abundance. You may start out a bit slow at first, but eventually you’ll learn how to get good at both pieces of this puzzle. Once you have both aspects working reasonably well, it’s awesome. Just plain wonderful. And it leads to a really fun and exciting life too. Lots of freedom. Lots of joy. Plenty of cash. And yet the cash doesn’t even matter.

The nice thing about having plenty of money is that you can largely ignore it. You can focus your attention on doing more important, more interesting, and more enjoyable things. The funny thing is that it’s this sort of focus that creates financial abundance in the first place. Then you come full circle and realize that you never needed money at all. You just needed the courage to go after your dreams full steam ahead, even when you were dead broke. You needed to stop hiding behind a lack of money as an excuse not to live your best life.

If I could learn and apply this lesson while going bankrupt and having less than $100 in the bank, surely you can apply it today. I learned that I could create and deliver value even when I had no money and few resources. It wasn’t the greatest value in the world mind you, but at least it was something. I focused on creating something people would like and enjoy. Then I got it into their hands and made sure they enjoyed it. Back then it was a simple computer game. Today I do pretty much the same thing with blogging. The content is different, but the overall strategy is the same.

The DELIVERING part needn’t be complicated. If you just create something and share it online, other people will spread it around if they like it.

If you’ve been putting your value out there for months and months, and you haven’t been able to generate much interest from others, that should tell you that your mistakes are on the creative side. The feedback is that people don’t care for what you’re producing. You think you’re creating value, but the world is saying, “Not good enough; we don’t need or want this.” So you need to adapt to that feedback and use it to improve. Let it encourage you to go deeper within yourself, so you can be more genuine and authentic. Become more real and less phony. Keep working at becoming a more expressive creator until people start to take notice. Then you’re golden.

What About the Economy?

Personally I think that economic recessions, including the current one, are a good thing. Recessions help to weed out the crappy companies that aren’t creating and delivering value people want. Many of those companies were doing a good job at one time, but they failed to keep pace. As our values change, our companies need to adapt. Companies that can’t do that deserve to die off, and the jobs they created should be eliminated. They’ll eventually be replaced by new companies that have a better sense of people’s current needs and desires. Company that just don’t “get it” will be replaced by companies that do.

Consider the notion of bailing out the failing U.S. auto companies by having the taxpayers fund them. Is this a good idea? It’s okay except for one small problem — it’s STUPID! It’s one of the dumbest things our political reps could possibly do with our tax dollars. An auto company bailout is definitely not in the best interests of our country, nor is it in the best interests of the auto workers themselves. It’s totally short-sighted. And FWIW I think the whole financial bailout was just as dumb.

I have family members who used to work for GM for years (not in the automobile division of the company though). If they were still working for GM today, I’d sooner see them lose their jobs and have to find new work elsewhere than encourage them to live under the illusion that their company should continue doing business as usual. As I mentioned previously, I bought a Japanese car in 2006 even though I could have gotten a great price break on a GM model. I just didn’t like any GM cars.

During a recession some companies are going to die off. That’s a good thing. To artificially prop up the proven market losers is just dumb. Sure, it will have some rippling consequences. But those ripples are necessary. We need that sort of self-correction to prevent bigger problems down the road. We need to send a message that if you fail to create and deliver value people genuinely want, your business will ultimately fail, and no amount of political lobbying will save you. Of course we get the opposite result when too many people think that the point of life is to chase dollars, especially our politicians. Can you blame them though? Have you ever been known to fall into the same trap?

It’s better — and much more compassionate — for millions of auto workers to lose their jobs and be re-integrated back into society, where they can start doing socially useful work again instead of wasting their time doing work that simply isn’t needed anymore. If it takes years, it takes years. There are other companies that are doing a better job of providing what people want and adapting to the planet’s changing transportation needs. Giving more money to the losers is a stupid strategy.

Similarly, if you work for a company that is falling out of sync with creating and delivering value that people want, you should indeed lose your job. It’s better to retrain yourself to do more meaningful work elsewhere than to waste your time doing work that isn’t needed. Becoming obsolete is a trap that can be avoided. Even if you’re an employee, you still need to make sure you’re contributing to the creation and delivery of real value. If you fall away from that, it’s only a matter of time before you get the axe, so don’t be too surprised when it happens.

A Value-Centered Career

How do you know if you’re creating and delivering real value?

Ask yourself these questions: If you stopped doing what you do, who would care? Who would object loudly? Who would revolt?

If you’re creating and delivering genuine value, and you suddenly stop, people will notice. People will definitely care. Your contribution will be seriously missed. There will practically be rioting in the streets.

Such people may not even credit the value to you directly, especially if your contribution remains somewhat anonymous, but they’ll soon detect that something important is missing from their lives. Even if they don’t know your name, the removal of your ongoing value creation and delivery will have a definite effect.

If, however, hardly anyone cares that you stopped, that should tell you something. It means that people just didn’t value your creative output… not really. What you were doing was either unnecessary or easily replaced. You weren’t yet living as a conscious, self-actualized human being. You held back from shining as brightly as you could have.

You have a choice of whether or not you want this to be your fate. You may have been conditioned from a young age to view your life path in terms of getting a job and making money. Go ahead and live that way for a few years if you think it’s intelligent. You’ll soon see what a pointless, soulless dead-end it really is.

When you finally begin to hear that subtle inner voice screaming at you, “This is just so wrong,” realize that it’s still possible to live a life of fun, freedom, and fulfillment — and still make plenty of money and not starve. But in order to get there, you have to focus on doing what really matters. You must clear your head of all that socially conditioned nonsense and stop doing what everyone else is doing.

Start living as a conscious human being, not a mindless minion. Focus on expressing your child-like creativity on a daily basis. Stop thinking so much about making money, and focus on connecting with people and sharing your creations with them instead.

Create and deliver. Create and deliver.

The correct focus for financial abundance is so simple it’s ridiculous. You learned it in kindergarten.

You: “Hey, look at this picture I made!” (Value created)

Adult: “Wow. That’s awesome! You made my day!”  (Value received)

It doesn’t matter whether or not my writing generates income for me. I don’t think about it like that. I just know that if I keep creating and delivering value, I’ll continue to enjoy financial abundance, and I’ll feel really good too. Money is basically a non-entity. It doesn’t motivate action, nor does it serve as a reward. It’s just something that recedes into the background while real life is unfolding.

I’d love for you to be able to enjoy similar benefits if this is something that appeals to you. It all starts with the choice of where you focus your attention. The more you pursue your own creative self-expression, the less you’ll have to fuss over money.

The irony is that this is probably what you tell yourself you’ll do when you finally have enough money, but that sort of thinking is a trap that will only keep you stuck. The way you would live if/when you’re enjoying financial abundance, start living that way now, for that’s the very strategy that will produce the abundance you seek. And when you begin to experience financial abundance, you’ll realize that you never needed it to begin with. You just needed the courage to start expressing the real you under the conditions you find yourself in this very moment.

How to Manifest Money

The most important aspect of manifesting money is to approach it from the right heartset. Think of your heartset as the overall vibe of your relationship to the activity of attracting money. How would you describe that relationship? Is it greedy, needy, excited, hopeful, etc?

If you approach this process from a place of neediness, clinginess, scarcity, or too much seriousness, you’ll most likely fail. That’s the right vibe for attracting nothing — or for making things worse by attracting unwanted expenses — but it’s not the right vibe for attracting money.

So if you come at this from a place of saying, “I really need $1000 to pay my rent next month, so I’m going to focus hard on manifesting it via the Law of Attraction,” well… good luck with that. But I’d bet against you.

A slightly better vibe is that of hope, but this is still a pretty weak vibe. Hope won’t get you very far.

A much better vibe is to come from a place of curiosity and experimentation. Go into a state of childlike wonder. With this vibe you may begin to generate some interesting results.

An even stronger vibe is to generate feelings of playfulness and excitement. This is a great vibe for manifesting money.

When you want to manifest money, it’s important to know that it’s already there. If it’s hidden at all, it’s hiding in plain sight, waiting for you to notice it and pick it up. This applies whether we’re talking about cash found on the ground or opportunities that will generate cash.

Know that the cash and the opportunities are right in front of your face. You just have to adjust your “eyes” to see them. You do this by shifting your vibe — your frequencies of thought and emotion — to one that’s capable of detecting the money.

It’s fun to think of this vibe-shifting process as shifting dimensions, as if you’re tuning in to a different perceptual frequency spectrum. That other reality was there all along. You just couldn’t see it before because you were tuned in to incompatible perceptual frequencies, frequencies that made the money invisible and undetectable by your senses. Maybe you were stuck on the red part of the spectrum, while the money was hanging out in the blue part.

Obviously your senses pick up a lot as you go about your day, but you only notice a puny fraction of all that input. In order to manifest money, you need to tune your senses to bring to your attention useful input that you’ve been subconsciously dismissing as irrelevant background noise. This tuning process takes some time, but you can definitely do it.

When it comes to creating a vibe of playfulness and excitement, children can easily be more masterful than adults. This is the same vibe we need to recreate as adults in order to manifest whatever we desire.

Detachment

People often get confused about the relationship between desire and detachment. Aren’t they diametrically opposed? How can you have both at the same time? Isn’t desire a form of attachment?

No, these aren’t in conflict. They coexist perfectly.

Let me ‘splain.

Desire is about what you wish to create. You could describe this vibe as passion, excitement, or even lust. It’s a delicious pool of emotions you summon by focusing on a new target. The stronger your desire, the better, so amp it up!

Detachment, on the other hand, is about how those desires ultimately manifest for you. When you become too attached to when and how your desires show up, you screw up the manifesting process. Instead of holding the vibe of playfulness and abundance, you start sending out signals like concern, worry, and stress. Don’t do that!

Would you become stressed and worried if you couldn’t find enough coins on the ground? Would that vibe improve your performance? No, that would only lower your performance.

When you notice that you’re getting frustrated, pause, breathe, and go back to the desire side. Hold that vision of the creation you wish to experience, and wallow in the positive sensations of being there in your heart, mind, and spirit. Know that physical reality will soon catch up, as long as you keep holding the right vibe.

When you feel moved to take action from a place of passion and excitement, not stress, then go ahead and let those actions flow through you. It will seem to be more work to stop yourself — you’ll feel like you’re chickening out and holding back if you stay still. Follow your impulses. But don’t worry about the immediate results of those actions. There may be some twists and turns along the way.

Power

When manifesting money, it’s especially important that you don’t give your power away to money. This negates your creative ability, and the money probably won’t arrive if you do that. This is a VERY common mistake.

You can’t effectively wield the power of manifestation by believing that you can manifest something you desire (i.e. money) while simultaneously believing that something you desire has power over you (i.e. money).

If you want to manifest money, you CANNOT believe that money is a power source. Money cannot give you wealth or abundance or happiness. It really can’t give you anything. Money just sits there — all the power comes from you. If you believe that having more money will give you any additional power at all, then you’re actually holding the vibe that says, “I’m too weak to attract money.” You’ll have to get a job instead. 

Think of it like this. If you want to manifest money, but you believe that money is its own power source, then deep down you’re giving money the power to say no to you. If money has power, then it can refuse to show up.

Instead of this crazy wrong approach, in your mindset and heartset, you must KNOW that you’re completely 100% dominant over money and that money is completely 100% submissive to you. You’re in total command of it. If you order it to show up, it must obey you. It has no power of its own. It cannot refuse you.

When you manifest money, you are COMMANDING it to come into your reality. You’re the CREATOR. Money has no choice but to obey you, but only if you wield your true power. If you give your power away to money, then you empower money to deny your requests. Money will say, “Well, if you’re letting me decide, then no, I’m staying over here.”

If you approach money like a power source of its own, then by trying to manifest it, you’re really trying to overpower it, and in such a contest you’ll usually lose. That contest, however, is completely internal — and pretty much insane. It’s like trying to arm wrestle yourself. How can you win? It’s a false reality you’re projecting because you aren’t ready to fully wield your own power yet.

Remember that money is nothing but a number. Or it’s pieces of metal and paper. How could it possibly be more powerful than a conscious human being such as yourself?

If you think that once you have money, you will become stronger, you’re crazy. Absolutely deluded! More likely — if you actually did manifest money from that kind of vibe — you’d grow even weaker. This would be a bad outcome for you, even though it seems like what you want. You’d be a weak-minded, weak-hearted person with more money, and you’d still see the money as more powerful than you, even while it’s in your possession. You’d then become attached to it and afraid of losing it because you’d still mistakenly see it as a power source. It would become a source of security for you, a constantly vulnerable one. The more money you had, the more paranoid you’d become about losing it. This would really mess you up big time. So be very, very glad that you naturally attract less money when you think of money as a power source. If you invite money into your life from that crazy frame of giving away your power, then money will become your Master, and you will be forever its slave. Don’t even go there!

If money has no power, then why manifest it at all? In truth, you don’t need to. But if you wish to manifest money, then do it as a game. Money is a toy you can play with. Get excited about the experience of manifesting money, but don’t put any attention into what you’d do with the money once you have it. It’s merely a number.

If you desire something you think money will give you, then focus on that desire directly, not on the money you think you need to get it. Money may or may not be part of the manifestation process.

Only focus on manifesting money directly if you’re capable of seeing the money as a plaything, like a video game score. It’s only something to manifest for fun, not something to get all worked up and stressed about.

Once again, do NOT give your power away to money. You must know that money is completely powerless. All the power is within you, never out there.

Upgrading

When manifesting money, start small and work up to larger amounts. See it as a score you’re aiming to increase, but don’t put larger amounts on a pedestal by assuming they’re more difficult to manifest.

I started with manifesting pennies in the Summer of 2006. Then I graduated to nickels, dimes, and quarters. I focused on quarters for several weeks. Then I progressed to dollars to $100 to $1000 to $10K to $50K. Overall it took less than a year to go from manifesting pennies to manifesting $50K. After that point I become more interested in non-monetary manifesting and had some especially fun times with manifesting in my social life — friends, mentors, and other yumminess. In fact, I honestly feel that manifesting money is a bit boring compared to all the other cool stuff you can manifest. It’s like playing a video game and obsessing over the score. That can be fun for a while, but eventually you want to focus on more interesting aspects of the game world.

If you can get good at manifesting coins, you can manifest larger sums too. The process is the same. Only some limiting beliefs of yours may stand in the way. But as you gradually upgrade to larger sums, you can collapse those false beliefs.

Once Emily gets good at manifesting coins and feels comfortable and confident with it, I’ll start challenging her to manifest larger sums. She may not find money on the ground as often, but it will show up in other ways.

Money comes to you through the filters of your beliefs, but you don’t have to change your beliefs radically. You just have to open enough of a portal in your beliefs to allow different sums to come to you.

Coins may be found on the ground while you’re walking around. Bills will sometimes be found on the ground too. Larger sums may manifest in the form of exchanges, business deals, inheritances, inspired action, and other ways. Assume that those larger sums are right in front of your face, staring at you and screaming at you to notice them. You just have to tune your vibe to the right frequency to pick them up.

I’ve noticed that as I’ve shifted my vibe to manifest larger sums of money and to manifest new experiences in other parts of my life, I seem to fall out of resonance with manifesting smaller sums. I’m not as good at manifesting coins as I was in 2006. That’s because my vibe isn’t tuned in to the coin manifesting frequency as much. These days I’m spending more time using the LoA to manifest cool social connections and travel experiences. I’ve tuned my vibe to focus on that part of the perceptual frequency. I also feel more excited and playful about manifesting in these other areas as opposed to adding to my financial score.

Congruency

Every relationship in your life contributes to the overall vibe you’re putting out. This includes all the different ways you relate to money.

For example, if your job sucks and doesn’t pay you very well, and you try to manifest money on the side, that probably won’t work so well because each time you go to work at your job, you risk re-triggering the vibe of feeling financially under-appreciated.

This is where lots of people get stuck with the LoA. They put out conflicting vibes every day. They may visualize having more money and feeling abundant and grateful, but then they go to the grocery store, and they buy cheap, low quality food because in the back of their mind, they’re saying to themselves that they can’t afford the good stuff. And that naturally cancels out the vibe of abundance, so the result is no change.

If your current circumstances cause you to emit conflicting vibes, then even as you go through the motions of acting in accordance with a scarcer financial situation than you’d like, keep your vibe focused on that of abundance. The best way to do that is by holding the heartset of gratitude. So even if you buy cheap, low-quality food, hold the vibe that you’re grateful for it and that you appreciate it. Feel appreciative that such food exists and that it’s within your budget. And then look at the high quality stuff, and emotionally invite it into your life. If possible, find one way in which you can splurge for higher quality items, like buying a few organic apples, and feel grateful that you can do that. And when you eat those apples, really enjoy them, and intend to receive more of the same.

But do NOT beat yourself up for not being able to afford what you desire. That will only lower your vibe.

Do like I did with Emily when she kept finding bottle caps and smudges. Praise yourself for succeeding at what you’re already manifesting, and then command your senses to adjust to a more abundant part of the spectrum of reality. Be patient with yourself — you’ll get it.

Whenever you start feeling bad about your financial situation, see that as a form of feedback. Let it become an immediate trigger to refocus on your desires. Say to yourself, “Okay, obviously I don’t want this. So what do I want instead?” Then think about happier alternatives; allow your mind to go there, and let the resulting new vibe flow through you.

Manifesting money is a fun challenge. It’s definitely doable if you approach it from a place of playfulness, knowing, and power. It does involve some discipline, but the discipline is mental and emotional, not physical.

The Parable of the Talents

The Parable of the Talents is one of the stories Jesus told to teach a moral lesson.  Although the word “talents” in the story refers literally to money, you can obviously extend the meaning to other areas.  It’s interesting to read it using the common definition of “talents.”

Here’s the story:

Again, it will be like a man going on a journey, who called his servants and entrusted his property to them.  To one he gave five talents of money, to another two talents, and to another one talent, each according to his ability.  Then he went on his journey.  The man who had received the five talents went at once and put his money to work and gained five more.  So also, the one with the two talents gained two more.  But the man who had received the one talent went off, dug a hole in the ground and hid his master’s money.

After a long time, the master of those servants returned and settled accounts with them.  The man who had received the five talents brought the other five.  “Master,” he said, “you entrusted me with five talents.  See, I have gained five more.”

His master replied, “Well done, good and faithful servant!  You have been faithful with a few things; I will put you in charge of many things.  Come and share your master’s happiness!”

The man with the two talents also came.  “Master,” he said, “you entrusted me with two talents; see, I have gained two more.”

His master replied, “Well done, good and faithful servant!  You have been faithful with a few things; I will put you in charge of many things.  Come and share your master’s happiness!”

Then the man who had received the one talent came.  “Master,” he said, “I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed.  So I was afraid and went out and hid your talent in the ground.  See, here is what belongs to you.”

His master replied, “You wicked, lazy servant!  So you knew that I harvest where I have not sown and gather where I have not scattered seed?  Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.

“Take the talent from him and give it to the one who has the ten talents.  For everyone who has will be given more, and he will have an abundance.  Whoever does not have, even what he has will be taken from him.  And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.”

– Matthew 25:14-30 (NIV)

This simple story makes some interesting points that are applicable to the pursuit of personal development.

First, we’re all given a different starting position.  Some of us are born into abundance (five talents).  Others are born into scarcity (one talent).  But what matters isn’t what we’re given — it’s what we do with it that matters.  So Jesus acknowledges the unfairness of life, but he also suggests that our starting conditions are irrelevant.  One person earns five talents, another earns only two, but both are congratulated equally because both achieved a 100% gain.  (I’d sure like to know where those servants invested their money!)

This is also a good lesson in how to deal with other human beings.  Deal with other people based on their starting positions, and evaluate yourself by your own starting position.  If you happen to be one of those who receives five talents, don’t pat yourself on the back that you’re already above average.  If you have abundant talents, you should expect even more from yourself.  Similarly, there may be times in your life where you only have one talent and do the best you can with it, and even though your gains appear small from an external standard, by Jesus’ standard you’ve still made a notable accomplishment. 

Another interesting aspect of the parable is that our talents are entrusted to us, like a master putting money into the care of his servants.  We are stewards of our wealth, and I define wealth very loosely here, well beyond material possessions.  For example, if I can write and speak fairly well, those are talents entrusted to me.  I can bury them in the ground out of fear, or I can push out of my shell and strive to create increase for all.

One thing I wonder about the parable is this:  What would have happened if one of the servants who invested the money realized a loss instead of a gain?  There’s a clue to how Jesus would have answered this because of how the master addressed the third servant:  “You wicked, lazy servant!”  Later the master refers to that servant as “worthless” and has him physically thrown out.  That’s pretty harsh language considering the servant still gave the master all his money back.  Is Jesus saying that inaction is wicked?  Yes, I believe so.  In other words, if you do nothing with your talents… if you hide them in the ground and hoard them, you are choosing to be wicked, lazy, and worthless.  You are supposed to invest what you’ve been given.  Don’t be lazy.

Another clue is how the first two servants are praised.  The master praises them for being “faithful.”  Very interesting.  It would have been different if the master praised them for being shrewd or effective or profitable.  But the praise is given for their faith, not for their results.

Given the language (and hopefully my points still work with non-English versions of this scripture), I conclude that if one of the servants had invested money and lost some or all of it, they would still have been praised for their faithfulness.  However, given that Jesus doesn’t directly address this condition in the parable, he may also be suggesting that faith itself is the path to success — a common theme in his other teachings.  So perhaps if you use your talents faithfully, you aren’t really going to lose.

Another notable quality of the parable is the lack of competition.  The servants aren’t competing with each other for their master’s favor.  It’s not a zero-sum game.  The first two servants both contribute something of value to their master’s estate.

What’s the ultimate reward for the faithful servants?  Although Jesus doesn’t explicitly say it, it seems obvious they don’t get to keep the money.  The two successful servants aren’t even working for their own increase.  It’s not their money.  They’re working for the increase of their master, and they share in the increase to his estate.  Their true reward is to share in their master’s happiness.  So happiness is the reward, and happiness comes from serving others.

I know from experience that if I undertake some action to create increase only for myself, there’s very little energy to it, and it doesn’t usually increase my happiness.  But if I focus on creating increase for others (such as by helping people grow), then I feel great joy in doing that, and it ultimately creates increase for me too.

But there’s more to it than that.  Happiness is a quality that I inject into my work, not something I derive from it.  When I work only for myself, I’m looking for happiness outside myself.  Trying to achieve happiness that way doesn’t work.  But when I work for others’ benefit and turn off WIIFM for a while (What’s In It For Me?), I tap into the deep wells of happiness that are already inside me.  Instead of trying to achieve happiness, I happily achieve.  Happiness flows outward from me and into the work I do, so I experience it as an outflow, not an inflow.

Happiness is something you exhale, not something you inhale.  Are you one of those people who must say, “Yes, Senator, I had a supply of happiness in my gut, but I did not exhale?”

As Jesus implies in The Parable of the Talents, creating abundance requires you to move beyond fear.  If you’re too fearful or suspicious or distrustful, you’re going to bury your talents.  And this leads to “weeping and gnashing of teeth,” i.e. sorrow and depression.

You might think that fear and suspicion will keep you out of trouble, but really they’ll just cause you suffering and pain.  You don’t need fear to avoid being a gullible idiot; for that you just need common sense.  To live a life of abundance, you must ultimately move beyond fear and work to create abundance for others.  Otherwise you’ll ultimately be cast out as worthless.  Jesus doesn’t pull any punches here, youse bums.

Serve to create increase for others, and happiness is your reward.  Bury your talents, and you get “weeping and gnashing of teeth.”  The choice is yours.

Defining Passive Income

Passive income is money that comes to you even when you’re not actively working, such as royalties, investment income, and revenue from automated business systems.

Earning passive income is not difficult. The how-to part — the actual doing of it — is fairly straightforward.

The difficult part is wrapping your head around it, unloading a lot of false conditioning, maintaining a constructive mindset, and shedding illogical fears. The challenge here is your own self development… to grow into the man or woman who won’t block themselves from doing this.

I prefer to define passive income fairly broadly as revenue you earn even when you aren’t actively working. Another name for passive income is residual income.

By contrast active income is money that stops coming to you when you stop working. If you get paid a salary and you quit your job or get laid off, most likely you’ll stop getting paid. You may get a severance package to help you transition, but your boss won’t keep paying your salary unless you keep showing up for work.

Similarly, if you do contract work for clients who pay you, and if you’ll stop getting paid if you stop doing this work, that’s also active income. You may have more flexibility with contract work, but you still have to do the work to receive your payments.

With passive income, you would keep getting paid whether or not you do any meaningful work. You may do a lot of work up front to get the ball rolling, but eventually you reach a point where the passive income stream gets activated. At this point you can essentially stop working on this income stream if you so desire, and more money will keep flowing to you through this stream regardless what you do or don’t do.

Passive income doesn’t mean one-time lump sum payments such as an inheritance or the sale of an asset like your home or some stock you own. Passive income is a source of income with some sense of continuation over time.

Passive income doesn’t mean permanent income. Some forms of passive income may last a few years. Other forms may keep going for decades or even for centuries across multiple generations. But all forms of income eventually dry up for one reason or another.

Passive income doesn’t mean 100% secure income. As Helen Keller wrote, “Security is mostly a superstition.” Some forms of income are more secure than others, but there’s always a risk element. For any income source, there’s a non-zero probability that something could destroy it. This is one reason it’s often wise to create multiple streams of income, so you can reduce the risk that all of them will fail simultaneously.

Passive income doesn’t mean perfectly 100% passive with no maintenance required. With any income source, you may need to do a little maintenance to keep it going. Sometimes this is really easy and only involves checking your mail and depositing checks. Sometimes it’s even more passive when the money is deposited directly into your bank account every month. But then you may still need to report this income and pay taxes on it.

Passive income is really a spectrum of possibilities. Some income streams are very passive. If you do essentially no maintenance on them for years, the income will keep coming. My book royalties are one example of this. Regardless of what I do or don’t do, most likely my publisher will keep selling my book, and people will keep buying it. Even if I shut down my website and go incognito for some reason, my book can keep selling online and in bookstores. All I need to do is deposit the royalty checks. I don’t have to process orders, interact with customers, or do any ongoing marketing.

Other income streams are semi-passive. You may need to do some work to maintain them even if you’re not working for a salary. For example, if you own a house and rent it out, you may earn passive income as rent payments from your tenants. But you may also need to invest some time, energy, and money to maintain the property, to find new tenants when the place goes vacant, and to handle the mortgage, insurance payments, and property taxes. If your tenants get ornery or become delinquent, you may need to do even more work. You may delegate much of this work to someone else, but then you have a business partner or employee to manage instead.

Passive income doesn’t mean it’s passive for everyone. There may be other people with regular jobs who do some of the work that enables you to receive passive income. You may also leverage technology to do a lot of work for you. The level of passivity is perspective dependent. One person’s passive income is another person’s active income.

I also want to distinguish passive income from what I’ll call moocher income. Moocher income is what people try to earn when they succumb to a get rich quick mindset. This is an undisciplined attitude that seeks to get something for nothing. The idea is to find a way to mooch money from people or the economy without providing any meaningful value. It is possible to generate income this way since markets contain plenty of inefficiencies, but it’s not an approach I recommend. I don’t personally define passive income to include moocher income, but there is a spectrum here where some forms of passive income deliver more value than others.

The goal here is to create passive income in a way that generates good value for others. This is more sustainable in the long run, and it’s better for everyone. Fortunately there are lots of ways to create value.

Your Passive Income Goal

As we transition into the how-to aspect of passive income creation, let’s begin by having you set a goal for what you want to accomplish here.

Let me suggest a simple meta-goal for starters: By the time you’re done reading this post, set a clear goal for what you want to gain from this series.

Do not close your browser window or move on to something else until you’ve set a clear and specific passive income goal.

No feeble excuses. No vacillating. No “I think about it later” B.S. And please no lame ass “I want more money” vague answers.

Whatever excuse you come up with as to why you can’t set a clear goal right now, we both know it’s stupid, so let’s not even go there. Not setting a goal is a waste of time.

If your actual desire is to create a new stream of passive income, then let’s make sure your goal includes 3 aspects:

  1. How much money you want to earn per month from your next stream of passive income (specific dollar amount)
  2. How long you expect that stream to last (number of years)
  3. Your deadline for receiving your first month’s income from that stream

This isn’t your ultimate goal we’re talking about here. It’s the goal for your first (or your next, if you’ve done this before) stream of passive income.

If you have something different in mind that doesn’t really fit the parameters above, then by all means set the goal you feel is best for you. At the end of the year, when other people are enjoying their new streams of passive income, you can see how your own goal worked out.

The idea is to set a goal that’s motivating but that’s also believable for you.

If you’re telling yourself that you can’t earn any passive income because it’s too much for you, then your imagination needs work. You could put $100 in a free savings account and earn a trickle of passive income each year for decades. So don’t be lazy here. Don’t let yourself off the hook. Set a goal.

Goal setting is a skill that takes practice. If you fumble this initially and set a goal that’s too big and unbelievable for you, you won’t achieve it. If you set an unrealistic deadline, you’ll blow the deadline. How do you know what’s realistic? You calibrate with practice, just like you learned to walk and talk.

I don’t expect your goal to be perfect. That isn’t the point. The goal is just the first step to get you moving forward and taking this seriously. And the ultimate goal is to get good at setting achieving your goals. This means you have to risk making mistakes in the beginning.

As the saying goes, There never was a winner who wasn’t at some point a beginner. So begin by setting a goal.

Is $10K spread out over 10 years a good paycheck for 6 months of work? No, I could easily have earned more money working at a job. I was already earning more than that from contract programming work before I wrote my first independent game.

The point of creating your first passive income stream isn’t to achieve that big payout right away. The point is to learn how to create passive income streams, so you can get better at it. Then you can create bigger streams as your skills increase. Don’t expect your first effort to be your masterpiece.

Today I can create new streams of passive income with a lot less effort than I had to exert in the 1990s. The reason I can do this is because I put in the time to learn how to do this, and I’ve continued to refine my skills over time.

Don’t worry about how big your streams are in the beginning. If you can create a $50 per month passive income stream this year, I think that’s great. And it’s so much easier to do this today than it was back in 1995 when I first started, so you have it much easier than I did. Your cell phone is probably 100 times more powerful than the computer I used back then.

Do set goals, but be patient with your progress. This is a skill that will benefit you your whole life. Even if you work on this for 10 years, there will still be plenty more to learn.

My Passive Income Goal

Since I want to keep this simple and not overcomplicate things, I’m going to set what is for me a relatively conservative goal:

I create a new stream of passive income by December 30, 2023, that generates at least $2000 per month on average and endures for a minimum of 10 years.

So this means creating a new stream that earns at least $240,000 over the next decade.

This seems like an achievable goal for me. I’ve already created multiple streams of this size and larger, so it’s not a stretch to believe that I can do it again. In this case the challenge will be to explain all the steps as I go along, which I’ve never done before. I want to keep this goal fairly basic, so I can focus on the teaching aspect.

Having a clear and specific goal helps me transition to thinking about the how. Now I can start pondering ways to do this.

This also helps me rule out what I can’t do to create this income stream. I can’t just do more public workshops or paid speaking since that’s active income. I want to set something up once and have it generate monthly income for at least a decade.

What happens if I don’t make the deadline? Nothing. I’ll set a new deadline. The deadline is a focusing mechanism. I could create a new passive income stream within a couple weeks if I want to. And I’ll probably create other streams along the way that I don’t blog about. But for this stream, I want to take it slow and explain the process in detail, so you can follow along. But I also want to keep moving towards some kind of release. I don’t want to get stuck in perpetual idea mode.

Your Passive Income Goal

The key to goal setting is to get into the habit of setting and achieving goals. It’s not to set aggressive targets that you never reach. You can always set a bigger goal later once you achieve the original goal.

Sometimes I’ve set a big goal with a two-month deadline, and I achieved it during the first week or two. So I celebrated that. Then I set a new goal with a new deadline.

As long as the goal seems motivating to you and it helps you get into action, then I’d say it a good goal for you.

My suggestion would be to set a goal something like this:

I create a new stream of passive income by May 31, 2013, that generates at least $100 per month on average and endures for a minimum of 5 years.

I think this is a very achievable goal for most people. You don’t need your own website to earn this much.

Now some people will blow this goal out of the water; it will be way too easy for them. Other people will find it a serious challenge. Feel free to adjust the goal to something that feels good to you.

If you were to achieve the goal above, you’d put at least $6K in your pocket, but it’s not the amount that matters. The real aim is for you to learn how to create a $100 per month stream of passive income. Once you learn how to do that, you can surely do it again. Do it 10 times, and you’ll earn $60K passively.

Once you learn how to earn $100 per month in passive income — by actually doing it, not by reading about it — then it’s not that difficult to learn to create bigger streams. So instead of creating 10 streams that collectively generate $60K, you might learn how to earn that much with just one or two streams. As you continue to develop your skills in this area, you’ll discover how to earn larger sums with fewer streams and less effort. If one stream dies, you’ll also know how to replace it with a new one.

I’m pretty comfortable creating streams that earn around $50K per year. When I had third-party ads on this website several years ago, one of those streams was earning more than $100K per year. Once you get the hang of this, I think you’ll find it a fun challenge to create new streams of income and to experiment with different approaches.

If you want more long-term financial security, you won’t find it in the money or even in the streams of passive income. You’ll find it in building your own knowledge and skills. You can take away all my streams of income, my website, my assets, etc, and I’ll be able to recreate the same level of financial abundance in a relatively short period of time because I already know how to do it.

This is what I want for you as well. I want you to learn how to do this, so then you’ll always have that option available. This know-how will relieve you of much financial pressure. You won’t have to scramble to get a job to pay your bills. You can just create more passive income streams if you want more money.

Do It Now

You are NOT done reading this post until you’ve set your goal and have written it down. If you haven’t done this yet, do it right now.

Once you’ve done that, I encourage you to also post your goal in public — IF you can do this in a place where you feel that people will support and encourage you.

If you expect mostly positive support, then share your goal on your blog, your Facebook page, etc. Add some accountability and commitment like I’m doing. This can help motivate you to succeed, and you’ll inspire others to develop this skill too.

If, on the other hand, you anticipate a largely negative response if you share your goal publicly, then you have a different challenge to address. This means your life is filled with too many incompatible people. You have too much social drag. These people are only going to get in your way, so if you don’t think you can win them over, then drop them. Block them, unfriend them, etc.

If other people have a problem with your setting a goal in this area, what are they going to be like when you actually succeed? They’ll probably get worse, and then you’ll have to deal with problems like pettiness, jealousy, sarcasm, neediness, and more. Better to cut them out now and fill your life with positive support. Let them learn from your example… from a distance.

Prepare to succeed. Expect to succeed. Know that once you’ve set this goal, you’re going to achieve it. And if you’re going to achieve it, then you need to start shedding from your life whatever would otherwise get in the way of your goal. Whoever can’t handle it, drop them. This will create space to invite much better relationships with people who will support you on this path. The dead weight must be shed, so that positive support can come through.

Passive Income Systems

To generate passive income, you need a way to maintain your income without having to do so much grunt work to keep it going. If you have to keep working each day to avoid seeing your income drop, then you’re earning active income, not passive income. Passive income continues to flow even when you aren’t actively working.

Many forms of passive income still require daily or weekly maintenance activities, such as fulfilling orders or handling customer service, but this doesn’t mean that you have to perform those maintenance tasks yourself. You may delegate such tasks to other people, to businesses, or to technology. For your income to be passive (meaning that you don’t have to do much to maintain your cashflow), you need to remove items from your plate, but those items still need to get done.

A passive income system is a form of delegation. What is being delegated, and to whom? How will the necessary active tasks being handled if you won’t be doing them yourself? Your passive income system must provide these answers.

I love delegating to technology because it’s fast, efficient, consistent, and inexpensive. Technology also tends to scale well, meaning that you can add more computing resources, which generally requires little more than paying for those resources. This works well for an Internet business.

Notice then that when you rely on technology to communicate, you’re already taking advantage of passive systems. Your messages pass through equipment that’s designed, built, and maintained by others. You may not be paying those people directly, but they’re working for you every day. You’re already taking advantage of these systems now. So if you currently rely on such systems for your communication needs, then why not leverage them to handle your income as well?

You can also delegate tasks to other people and to businesses to get them off your plate. In a typical affiliate deal, you may delegate the order processing, fulfillment, and customer service to another company. For example, if you use Amazon’s affiliate program to sell items, you’re effectively delegating a significant portion of the work to Amazon. From your perspective an affiliate sale may seem very passive, but that’s because Amazon provides the active labor to make your affiliate commissions possible.

Build or Borrow

To employ your own passive income system, you have several options:

  1. You can design and build your own passive income system from scratch.
  2. You can learn how other people earn passive income and try to copy their approach.
  3. You can use someone else’s system as-is (usually by paying for the privilege).
  4. You can do a combination of any of the above.

I’ve used all of these approaches at different times. I can’t offer a general recommendation for one of these above the others though. The most intelligent choice depends on a variety of factors including time constraints, budget constraints, personal strengths, and personal goals.

If you’re up for a real challenge, it can be very rewarding to design and implement your own passive income system from scratch. The upside to this approach is that you invented it, so you know its inner workings, and you can customize it all you want. The downside is that this method can take a lot of work, and it may be quite a while before the first income streams start flowing. Innovation is risky. Sometimes the risk pays off. Sometimes it doesn’t.

More commonly, people borrow ideas from each other. Why reinvent the wheel? Learn what works for other people, and use similar methods for yourself. There are plenty of books and systems authored by entrepreneurs who are happy to teach you how to do what they did. Some people are willing to share details of their systems for free, while others only share this info for a fee. Even when there is a fee, buying someone else’s system can save you a tremendous amount of time and energy.

A seemingly inexpensive approach is to use someone else’s system as-is. An example of this is licensing your book to a book publisher or selling your book via Amazon. This may seem like a good deal since you don’t have to pay anything up front, but it can be a lot more expensive if you do well because you may have to give away a significant percentage of your sales to the system provider. This approach tends to be the easiest for getting started. System providers in this category may be very good at processing orders and handling customer service, but they usually don’t provide much marketing assistance, so it may be hard for you to get noticed with them. That said, they can do an awful lot of work for you, making your income streams very passive.

The good news is that you don’t have to understand how to build a passive income system from scratch in order to use one, just as you don’t need to know how to build a computer from scratch in order to use it.

My personal favorite is the hybrid approach. I pick up many good ideas from others, but I like to put my own spin on things and keep tweaking my passive income streams as I go. I rarely use other people’s systems as-is, often because I find their marketing methods a mismatch for my audience, so at the very least, I still need to tweak the marketing elements even if the underlying product or service is a good fit.

To Buy or Not to Buy

One question that will surely come up for you is whether or not you should buy into someone else’s system, such as by paying for their knowledge or resources.

Generally I do think this is a good idea, especially when you’re first starting out, but only if you’re cautious about it. You can waste a lot of money buying low quality money-making systems from random Internet marketers. On the other hand, paying for a good system can also deliver tremendous value. You can learn in a short period of time what took someone else years or even decades of painstaking work to piece together.

I used to be a bit over-eager in paying for what seemed like premium knowledge in this area, and I wasted money on what turned out to be fluffy or outdated info. Then I cut back massively and became very stingy, which caused me to miss some easy opportunities. And finally I settled into what I feel is a more practical and realistic attitude. I’m willing to pay for systems know-how if I think I’ll be able to apply it effectively and if the info comes from a quality source. For me a quality source is someone who seems to genuinely want to help people understand and apply the methods they teach, rather than just selling low-quality info to make more money. Also, a quality system is one that’s already been proven to work under real-world conditions.

Usually when I pay for systems knowledge these days, I’m not looking to implement someone else’s system as-is. I’m simply looking for a few fresh ideas I can use to upgrade my existing systems. What are the latest and greatest ideas I might otherwise miss?

I know that when it comes to marketing, the people who sell these systems may try to push my emotional buttons and offer extra incentives to get me to buy. I do my best to ignore those sales tactics and look at the potential value more objectively.

Since I know people are going to ask me this, I’ll share a couple of specific recommendations for systems you can use to generate passive income streams online today. (Stay tuned to my “Life Lessons” email series for specifics).

I used a combination strategy when I ran my computer games business. I sold the games through my own website, but I also posted my game demos to hundreds of software and game download sites. The download sites helped drive traffic to my website, where people could buy the full versions of my games.

Your Passive Income System Preferences

My goal is to get you thinking about what kind of system you’d like to use to generate your own passive income streams. Do you want an income-generating website? Are you leaning towards having a product to sell on other people’s websites? Would you like a system that incorporates both? Or do you want to do something wildly different?

Think about your strengths. A good system will allow you to leverage your strengths while delegating the areas where you’re weakest. Are you a content machine like me where you need a system to provide an effective publishing platform and a way to monetize your work? Would you feel more comfortable selling someone else’s product or service? Does selling turn you off, and would you prefer to delegate the selling aspect as well?

When it comes to passive income systems, the key test is whether your system works in the real world. You can dream up whatever you like, but dreams aren’t streams.

A good passive income system generate results. If you’ve never created your own system from scratch, I recommend borrowing someone else’s system if you want to reach your goal quickly. Otherwise if you prefer a bigger challenge and don’t mind investing a lot more of your time and energy up front, you’re always free to roll your own.

Once you’ve had the experience of working with someone else’s system, you may decide to keep using it, you may experiment with different systems, or you may tackle the challenge of rolling your own system. There’s no right or wrong way to do it. But I’d suggest that for your first stream of passive income, it’s much easier to simply borrow and apply someone else’s system, even if you have to pay for it. A good system looks simple, but that’s because it hides so many implementation details. For passive income, this is a good thing. Handling too many details yourself throws you back into the realm of active income.

A good passive income system will normally employ many different income-generating strategies simultaneously, weaving them into a congruent tapestry. This is similar to how a computer integrates many different hardware and software components that function well as a unit.

We can also learn a lot by breaking out and studying the individual components of a passive income system, and that’s what I’ll be sharing in the weeks ahead. While I still recommend borrowing someone else’s system to get started, learning the details of how the different elements work together is still very helpful since you’ll probably want to tweak and extend what you learn from others.

Loving Your System

At this point you don’t have to commit to a particular passive income system approach just yet. You’ll eventually need to make such a commitment, but for now I want you to familiarize yourself with some options and start giving this some thought.

It’s important to cultivate a healthy relationship with the passive income system you’ll use. If you love your system, you’ll use it. If you don’t like it so much, you’ll procrastinate.

I don’t do real estate investing to generate passive income because it would bore me to tears, and I wouldn’t feel like I’m contributing much. Some people may be very passionate about real estate investing, but it’s a bad fit for my personality and values.

On the other hand, I love blogging. I love that when I have an idea, I can get it out of my head and share it with thousands of people that same day. I love that my work is permanently archived and accessible 24/7 to anyone with an Internet connection. I’m not very patient, so when I have an inspired idea, I like to share it immediately. I love the passive income system that supports my blogging because it allows me to provide a tremendous amount of value for free without feeling I have to hold back or to charge money for every little thing. I like sharing, and the system I use allows me to do that abundantly.

I don’t want you to make the mistake of adopting a passive income system that you merely tolerate. I want you to have a system that you truly appreciate. Offload the work that you don’t enjoy, so you can do more of what you love. When you do what you love, you’ll contribute more, and that’s better for everyone.

Passive Income from IP

Intellectual property refers to mental creations that are associated with legally recognized rights, such as material that can be copyrighted, trademarked, or patented. This includes articles, books, music, movies, artwork, photographs, comics, software, logos, and more.

Mere ideas do not generally qualify as intellectual property. It’s the expression of the idea that’s legally protected. You cannot claim the idea of poetry as your intellectual property, but you can copyright an original poem you’ve written, which gives you certain exclusive rights to that poem.

Since intellectual property is generally easy and inexpensive to duplicate, especially when it’s in digital form, it’s a great candidate for creating streams of passive income. You can deliver value to people simply by copying and sharing some data, and this process can be automated or outsourced.

To create a piece of intellectual property may involve a good deal of work, but that work need only be done once. After that, the property can be duplicated and shared with many people. You could potentially still be generating earnings 50 years from now for a piece of intellectual property you create today.

For instance, you can write a book once and then generate income from direct sales of the book or royalties from a book publisher. You can also earn income by selling the associated movie and merchandising rights.

Self-Publishing

Once you create a piece of intellectual property, one option is to sell it yourself and see if people will buy it from you.

This works well if you have a following or can build one. For people who are just starting out, it’s going to take a while to build that following, usually years. If you’re patient and persistent, this approach can really pay off though.

I used this approach with my games business. It took time to build a following, but I eventually got there. The only real way to fail is to give up, which is of course what most people do.

One of the leverage points for self-publishing is lead generation. This means finding a way to attract people who might be interested in your product. One way to do this is with advertising, but that can be risky and costly, so I don’t recommend it for most people.

My favorite method of lead generation is to give away a lot of quality free content. With my games business, I offered free game demos and submitted them to hundreds of game and software downloads.

Note that putting up free content on a website with no traffic is not lead generation. Nobody will see it. You have to get your free stuff into people’s hands, meaning that you have to put it where there’s traffic. If you don’t have the traffic, then put your free content somewhere other than your own website. The free content can then refer people back to your website, where they can buy something from you directly.

When you generate leads, don’t let them fizzle out. Try to collect them. People often need to be exposed to an offer multiple times before they’re willing to buy anything, so if someone visits your website but doesn’t buy right away, give them other options to stay in your communication loop, such as by subscribing to your blog or newsletter or by following you on Twitter, Facebook, or Google+.

As you generate leads over time, some of them will subscribe to one of your lists, so you can still communicate with them.

Some people really push hard on the newsletters, sending them almost daily. I typically send mine about once a month, but I’m not perfectly regular about it. I’ve sent out 4 issues so far this year. If you wish to subscribe to see what it looks like — or to see what you’re missing — you can sign up here. Of course I don’t spam people or sell their email addresses, so all you get is the newsletter, and you can easily unsubscribe by clicking a link at the bottom of any issue.

To process sales you may need a merchant account and a shopping cart. It’s been years since I shopped for a merchant account, so I don’t know what kind of deals are available today. Try Googling “merchant account” to see if you can find a decent recommendation or review site for merchant accounts. You can also process orders via PayPal if you wish; they can handle credit card orders from non-PayPal customers, and their rates are competitive.

Self-publishing is a long road. It’s definitely not a good choice for ADHD types. This is for the builders who enjoy creating something to endure.

The main advantage to self-publishing is that once you have it figured out, you’re pretty much golden. As you learn what works for you and what doesn’t, you can line up a string of repeat successes.

Licensing

Even though we speak of selling intellectual property products like ebooks and videos, what we’re really doing is licensing them. The information within isn’t actually being sold since no transfer of rights occurs. What’s being sold is a license to use that information, and often the license is limited to a specific purpose. You might also sell the physical media that stores the information, like a CD or DVD.

Licensing is more obvious with software which often includes a license agreement. You may have to agree to its terms in order to use the software.

In a broader sense, you can license your intellectual property to other entities, who can then exploit it to generate revenue, and depending on how you structure the deal, you can earn a cut of that revenue stream. This is what happens when you sign a publishing deal with a book publisher. They sell the book, and you receive royalties from the sales.

Some companies make millions from licensing their intellectual property for various uses. Look at the thousands of products with Disney characters on them, for instance. Disney earns a bundle in licensing fees for those products. Could you create the next Mickey Mouse?

Here are some more examples of what you can do with intellectual property:

  • Design a t-shirt, and license your design to a t-shirt company in exchange for a small cut of the sales
  • Take some scenic photographs, and license them to a postcard publisher
  • Record some relaxing music, and license it to people who sell meditation audio programs
  • Write a new iPad or iPhone app, and sell it through iTunes
  • Write an ebook, and sell it through Amazon.com
  • Invent a cartoon character, and license it to a toy company to create stuffed animals

I have a friend who is an artist, and many years ago she licensed the artwork from some of her paintings to a greeting card company. She earned royalties from the sales of those greeting cards.

Don’t let the word licensing scare you. Licensing simply means “giving permission.” Normally when you license work you created, you and the other party will sign a contract to spell out the terms. You can have a lawyer draft one for you, find boilerplate agreements online, or create your own.

Licensing Agreements

I paid lawyers to draft my first few licensing agreements, and once I became familiar with the key terms, I could easily write my own agreements, using what the lawyers created as a reference. Depending on the complexity of the agreement, it would cost me anywhere from several hundred dollars to a few thousand dollars to have a lawyer draft it for me. I would only do this if the deal was likely to generate more than enough income to cover the legal fees.

Legal bills can add up quickly, but for deals where a lot of money is involved, the professional help can be well worth the expense.

Often you don’t have to draft a licensing agreement yourself since they other party may provide one. Publishers do this as a matter of course. Then you only have to review it and suggest changes. I’ve rarely signed a licensing agreement without asking for something to be changed.

If you’re broke or want to learn how to draft licensing agreements on your own, a good source for info is Nolo Press. They sell many quality books, software, and do-it-yourself legal kits.

Re-Licensing

If you create some intellectual property that can be licensed, you can even grant someone else the right to license your creation for you, usually by giving them a share of the revenue streams.

What do you do if you’re a creative type who can create interesting intellectual property, but you aren’t any good at selling or licensing it? Team up with someone who can handle the selling and licensing for you.

My best advice for evaluating a potential licensing partner is to do your homework. Get in touch with people who’ve worked with that potential partner, and ask if they’re willing to share their experiences. Listen to what they say, and take it to heart.

Deal-making

Once you get good at licensing, you can generate new revenue streams by acting as a dealmaker. This may seem daunting if you’ve never done it before, but with practice it can be a lot of fun. You can get paid to act as a matchmaker.

Many years ago I licensed a computer game from a small game developer, including the right to re-license it. I published and sold the game through my own company, but I also turned around and re-licensed it to another publisher. This generated an extra stream of royalties, which I split with the developer as we had previously agreed. Could the developer have done this deal on his own? Maybe… but it would have taken him a lot longer. It was easy for me to close this deal quickly because I already had the connection with the right publisher.

Notice in this case that I didn’t create or own the game, and I didn’t own the other publisher’s business or sales outlets. I just put the deal together, which generated income for the publisher and the developer — and for me as well. So please note that you can create streams of passive income from intellectual property even if you don’t own the property or the sales platform. You can get a cut of the action for being the dealmaker, and deservedly so.

For several years I’ve worked with a guy who helps me find good joint venture deals. He’s well connected in the personal development field and seems to spend most of his working time on the phone. He knows people who have great products and services. And he knows people who have sizable audiences like me. He connects one with the other, helps massage the deals into place, and enjoys a share of the revenue created by these deals. These income streams have paid off his mortgage. He didn’t receive any special training for this, but through life experience he discovered that he was good at introducing people to each other, and he found a great way to turn that into multiple streams of income. On top of that, he recorded and produced his own music album, and he’ll begin selling that soon as well.

If someone brought you an easy-to-close deal that earned you an extra $1000 per month, would you be willing to pay them $100 per month from that revenue stream for doing the legwork?

Some people are so good at dealmaking that they can generate millions in passive income with just a few phone calls. There’s real value in connecting two or more people or businesses that can synergize their resources, if only they knew of each others’ existence.

Creativity

Intellectual property is a nice choice for creative people because it’s so flexible. You can create a piece of property once and then license/sell it in many different forms.

I also love that you don’t need a lot of money to create intellectual property.

However, because the barrier to entry is so low, it means that lots of people are going to attempt this. The vast majority won’t be any good, but this does create a crowding effect. Even if you’re good at what you do, it may take some time to separate yourself from the mosh pit of wannabes, especially in the eyes of people you’d like to work with.

When you create something, try not to wrap your self-esteem around it. In the beginning you’re probably going to suck. That’s okay. Everyone but Mozart sucks initially. Keep practicing and honing your skills, and you’ll get better.

Being creative isn’t enough if you want to turn your creations into income streams. Selling, licensing, and deal-making are important skills as well, and I suggest that you try to respect these roles as much as you respect the content creation side. If you’re unwilling to develop those related skill sets, then give some serious thought to partnering up with someone who can perform those roles. If you can convince them of your creative genius, it’s a great opportunity for them as well. It certainly worked out well for Steve Jobs acting as dealmaker for Steve Wozniak in the early days of Apple Computer.

Let’s talk about the reality of what it’s like to create streams of passive income and how it compares to working at a regular job. What I’ll share here may surprise you.

With a typical job, you’re more or less directly trading your working hours for dollars. You may receive an hourly wage, a salary, and/or bonuses for the time you put in at work. Your ongoing pay depends on your continued presence at work. If you stop working, your paycheck stops as well.

With passive income you’ll often get paid nothing at first. Initially you work to create and/or leverage a system that generates a flow of income long-term. Once your new income stream is launched and the passive phase begins, you may not have to work very much at all beyond that to maintain the stream.

Passive income is one strategy among many for earning money. It doesn’t necessarily dictate any particular choice of careers. You can do many different types of work and use passive income strategies to monetize your work.

Passive vs. Active Income

Suppose you’re a writer. One way to earn active income would be to get a job writing for a magazine or newspaper. You could get paid to write articles which your employer publishes and owns. You would receive a wage from your employer for the service you provide. If you stop writing in this scenario, you’ll stop getting paid.

Now suppose you offer your writing skills as an independent contractor. You market and sell your services to people and businesses. You do this on a “work for hire” basis, getting paid for each job you complete. This is also active income. If you stop working, your income ceases.

Now suppose you write a book and sign a publishing deal with a book publisher. The publisher gets your book into bookstores and also sells it online. They send you royalty checks twice a year based on sales of the book. You receive a percentage of what they receive for every copy sold. Five years later you’re still receiving checks from them. Your royalties are passive income. Even if you stop working after your book is published, you’ll continue to receive royalty payments for the book that did get published. You could potentially continue to receive these payments for the rest of your life. Your book may eventually be purchased by people who aren’t even born yet.

Notice that in each scenario, your underlying career is essentially the same. You’re still the same writer. You’re just using different strategies for earning income. You could even apply all three strategies simultaneously, working at a regular job, doing contract work on the side, and also writing a book and getting it published.

At any time you’re free to use active income, passive income, or hybrid strategies — or any combo of these you wish. You don’t have to quit your active income job to set up streams of passive income. For some people this is easier, however, since a regular job can chew up a lot of time, making it harder to find the time to create passive income.

Sometimes you can even get paid to create your streams of passive income. For instance, our writer may receive an advance for his/her book from the publisher. So not only does this writer earn long-term passive income, but s/he also gets paid to set it up.

Where Does Passive Income Lead?

I want you to start thinking about how your life would be impacted if you took the time to create some streams of passive income. Suppose you succeed. What then?

What would your life be like if you were receiving an extra $100 per month in passive income? What about an extra $500? $2500? $10K? 50K?

At what point do you shift from that wouldn’t make much difference to that would be nice? Then when do you think, That would really take off some pressure?

What amount nudges you into I could live off of that amount? Then when do you think, Wow… I could really upgrade my lifestyle with that?

And if you want to think beyond that, where do you start thinking, Hmmm… I wonder what I’d do if I earned that much without having to do anything? What would I actually do with my time then?

It may surprise you that one of the reasons people avoid earning passive income is the fear that arises from being confronted with that last question. People often spend so much of their lives distracted by the daily grind of work, bills, and social obligations that they rarely give much thought to the bigger questions. Suppose you actually do succeed here in a big way? Then what?

If your end game looks bleak, empty, and meaningless, that’s going to hold you back. You’ll sabotage yourself before you get very far.

Will Passive Income Make You a Bigger Success or a Bigger Failure?

If you didn’t have to work and money kept flowing to you month after month, what would you do with your time? Would you play video games all day or do drugs or sit around watching TV and eating?

I actually found it pretty difficult to succeed in creating passive income until I was able to answer these questions seriously. My answer changes from time to time, but the core is that I want to spend my life growing, creating, and sharing. I want to keep adding something of value to the substance of the universe. Whenever I keep doing that, regardless of how much money I’m making, I feel happy and fulfilled.

The irony is that if you answer this question honestly, you’ll probably come up with something that you could just as easily do when you’re broke, although perhaps not at the same level.

Because of my passive income streams, I can afford to be really lazy if I wanted to. I could sit around doing nothing for weeks on end, and my bills would still be covered. For some people this may sound like paradise, but it presents its own challenges. If you’re not careful, you could easily slide into a serious depression in this kind of situation. People receive a lot of fulfillment from work, but if you no longer have to work, will you still be able to motivate yourself to tackle new challenges, or will you do little or nothing because you can?

Many people have created passive income streams that cover all their expenses, and they ended up depressed and listless. Some try to keep the treadmill going by creating even more passive income streams, but their hearts just aren’t in it, and they eventually burn out.

What’s Your Motivation?

It may seem premature to think about this now, but I think it’s pretty important. If deep down you know that the end game of creating passive income is going to be a bust for you — that you’ll just end up living like a big loser day after day — then will you really be motivated to get there? That would probably require a lot of pushing and force to get yourself to take action.

If, on the other hand, you can envision a pleasant and fulfilling end game scenario, I think it will be much easier to create passive income streams in a more peaceful and flowing way. There will still be work to do, but at least you won’t be internally fighting yourself along the way.

If anything stops you from earning passive income, what will it be? It’s undoubtedly going to be something inside you. The external action steps are certainly doable. You may screw things up in the beginning — I sure did! — but if you persist and learn from your mistakes, it’s largely a done deal that you’ll succeed. As I mentioned in a previous post, people were earning passive income thousands of years ago. Surely you can learn this as well. So the only thing that’s really capable of stopping you here is you.

Beyond the Hype

I know there’s a lot of hype around passive income. Yes, it’s cool. Yes, it can relieve a lot of financial pressure. Yes, it can make a big difference in your lifestyle. I must say that a lot of the hype is true. As Earl Nightingale said, “Nothing can take the place of money in the area in which money works.”

But suppose you really get there. Suppose you cover all your expenses and then some with passive income. Then what? What will you do with your time? And will you be truly happy doing that, year after year and decade after decade? Or will you feel even more lost than you do now?

Here’s what I suggest. Write down a little vision statement for yourself, perhaps a few sentences or a paragraph about how you’d choose to live if all of your expenses were covered by passive income, and you didn’t actually have to work to pay the bills.

Then set that statement aside, and look at it tomorrow fresh. Now ask yourself if you’d really be happy in this scenario. If you don’t think you’d be very happy there, rewrite your statement. Try to get clear about what your personal end game of passive income looks like. See if you can create a scenario in which you’re very happy.

Finally, if you aren’t already doing what you wrote in your vision statement now, then why not? Could you still do it in some capacity under your current conditions if you really wanted to?

Money is Fuel, Not a Cure

You see… if you’re holding yourself back now, then why wouldn’t you continue to hold yourself back even after you’ve created your abundant passive income streams? If you allow yourself to use lack of money as an excuse today, you’re just going to use a different excuse when you have more financial abundance. Money is no cure for the willingness to succumb to feeble excuses. So if you see this pattern in yourself, then I suggest you start working to overcome it today.

Money is more multiplicative than transformative in its effects. It makes you more of who you already are. So if you’re the kind of person who will excuse yourself from a bigger vision today, adding more money to this situation will only make things worse. Many people who have lots of money also have many more obligations to use as excuses. The excuse making doesn’t end with more money; it only magnifies.

It may seem like having lots of free time to play is a great thing, but a playboy/playgirl lifestyle probably won’t create much fulfillment. More people seem to find fulfillment in meaningful work. Yes, you can still play and travel and all that good stuff. But give some thought to what work you might wish to pursue if you didn’t have to work for money at all. This is an important question to answer. Equally important is to ask: Why aren’t you doing this work right now in some fashion?

I personally feel that the #1 benefit of having my expenses covered by passive income is that I get to keep doing a lot more of the kind of work I enjoy. I also get to work the way I want to work — where I want, when I want, how I want, and with whom I want. But in order to maintain those feelings of fulfillment and meaning in my life, the work must continue. I can’t just go into perpetual play mode and check out.

I think you’ll find that if you’re already living your bigger vision in some capacity, then creating streams of passive income will be a lot easier. These streams will help you expand your vision and overcome distractions.

But if you’re currently using feeble excuses like the lack of money, lack of time, or the obligations of your day job to distract you from a bigger vision — even as you somehow still have time for Facebook, texting, email, reading blogs, watching TV, etc. — then I’d bet that you’re not going to succeed in creating much passive income; you’re the type who will come up with an excuse to quit, and even reading this book is just another distraction for you.

So whatever it is that you think you might start doing once you’re already living the dream of total financial abundance, start doing that now in some fashion. Insert it into your life, even if it’s just for a couple hours a week to start. If you don’t have time for it, quit Facebook, give up TV, and cancel your texting plan.

Start Your Passive Income Journey Now

In every industry there’s usually a backdoor way to get paid OVER and OVER again for a single idea, property, or patent.

In the drug business, for example, the big money is in patents. After all the work is done developing a new drug, for example, a scientist can partner up with a larger company to handle the expenses and risks of testing, marketing, distribution.

Then the patent holder gets paid for every prescription that gets filled. The guy who developed the popular pain medication Lyrica, for instance, shares in more than $2 million per month because he owns the patents. The ladies who owned the patents on the anti-fungal medicine Nystatin shared in more than $50,000 per month.

In the publishing business the big money is in royalties. Once you do the work writing a book, you sit back and collect your share of the profits. What I’ve found is that there are some incredible (and low risk) ways to use this secret as an investor. In short, collect incredible royalty streams for owning a very valuable asset.

Here is a highly lucrative passive income system that has already been pre-built for you―no re-inventing the wheel. It has also been tested, proven and demonstrated to be highly successful.

GET STARTED HERE.