How I Make Money Online, and Hopes for the Future

I spend a lot of time online – I mean, this website (and others!) exist! That said, my goal is for it to be my source of income, as well as something fun to do.

I do already have some income to brag about from online schemes, but nowhere near enough – yet! – to live on. In part, I hope this will be a delightful record to look back at, once I am living off internet income. In part, though, I love the idea of helping others generate an online-based income, as well!

Active vs. Passive Income

There is no such thing as truly passive income, except possibly inheritance. Instead of active and passive, I think of these two categories of income as trading-hours-for-cash and separated-hours-from-cash. Active income, like tutoring, involves working at a rate-per-hour for a set number of hours. Ultimately, you are limited by the number of hours in a day, week, or lifetime.

So-called passive income still involves work, but the ratio between time and payout isn’t so clear. Passive income, like advertising fees on this very website, involve a set amount of work – building a website – that could then involve payout (theoretically) forever, or as long as the systems remain in place.

Passive income, therefore, involves work that is separate from an obvious payment, but is key to building what we’ll call passive potential. Writing a post for a blog is building passive potential. Writing a book is building passive potential.

How much passive potential one must build up before it starts to pay out is a topic of much debate. General opinion, however, reflects that it must reach a certain threshold to earn anything, at all. One source I saw suggested a website is worthless until it has 1,000 posts, minimum.

Google AdSense, for example, won’t pay until you earn $100 through embedded ads, which could take months for a blog with relatively low readership.

My Active Earnings

Did you know I tutor?

Right now, I charge $40/hour through Wyzant, which means I get $30/hour after fees. I tutor both online and in-person, and it seems silly to me that I earn the same rate whether I drive to your house or not. I also figure I could increase my hourly rate and probably not lose much business.

I’ve only taught a few hours with Outschool, but I’ve averaged $25-35/hour of actual teaching. I recommend them, for sure, but they sort of blur the line between passive and active income. That said, I actually get paid for the hours I teach, not the hours of prep that I do – and I can teach multiple classes from one round of prep. I believe that the more success I have on Outschool, the more I can charge/earn for a single hour, the higher these numbers will get.

(Social proof matters on websites like Outschool and Wyzant. People want to see that others have had a good experience with you, gotten their money’s worth, before they sign up to learn from you. Which means that once you accumulate reviews and ratings, you can theoretically charge more.)

Passive Income

Currently, this is the most disappointing aspect of my portfolio, but the area with the greatest potential. I generally earn a few dimes every time someone clicks a Google Ad on this website, but my current average is 0 clicks per day. More total views would increase how many clicks I get, but this is unlikely to ever be over $1/hundred views. (Note: more views will lead to more clicks, but that’s true for all of these passive approaches. More views is always a good thing.)

Affiliate sales are kind of like ads in that I add a link to my stuff (website or Twitter or whatever), someone likes what they see, clicks that link, and goes to buy something from a whole ‘nother website entirely. Right now, I’m averaging $0.00/hundred views on all my affiliate sales, so again – the potential can only go up from here.

Product sales are, in my opinion, the most promising. Because unlike ads and affiliate sales, I get to keep the entire price of whatever gets sold. Tons of internet-income-gurus talk about writing an e-book and selling it forever and ever, and I’ll admit: I like the idea of getting paid multiple times for work I did once.

Currently, though, I have no products to sell – so this might be my highest priority, for the time being.

Building Passive Potential

I need to build an online audience of raving fans, people who look forward to reading what I write and seeing what I post. Sure, I can check how many views I’m getting on a piece of media, but I also need to build an email list and a community of students on Outschool – the more, the merrier.

Which means I need to produce content, on Outschool, on my blog, even on Twitter – consistently. Right now, I’m not giving myself credit for building passive potential, and that should change. (Is changing, in fact, with the writing of each and every post.) I need to focus more time on course design and on creating something worth selling.

Wish me luck!