How To Create a Passive Income Machine

Even if you’re broke, clueless, and don’t know where to start

Photo by Eric Prouzet on Unsplash

Generating passive income is the most exciting idea that’s been on your mind recently — isn’t it?

The idea of starting an online business, offering up a valuable product to the market, and having the mechanisms in place that could generate tens, if not hundreds, of thousands of dollars on auto-pilot — even when you’re sleeping.

It’s crazy, right?

It’s one of the hottest topics you hear talked about today.

  • But what’s it all about?
  • How does it work?
  • Is it even real and if so, how can I cash in on this goldmine?

In this article, we’ll examine all there is to know about generating a passive income, from how it works to what you can do right now to get a passive income mechanism started in your life (even if you currently work at a day-job).

What Is Passive Income?

According to BusinessDictionary, passive income is:

“Earnings from rent, limited partnership, or other sources of income (in which the earner does not take an active part), not including salary, wage, interest, or capital gain. Also called unearned income, passive income can be written off against passive losses.”

The key phrase here is:

“…the earner does not take an active part.”

So, like alluded to earlier, this is a way of making money when you’re sleeping!

Why Should I Work to Build Passive Income?

Wealth can mean a lot of things. It has a very personal definition.

For a lot of people, wealth means the ability to purchase material items when and how you want to.

For others, wealth is a state of being — you can have no money and be wealthy in spirit.

For our purposes here, wealth is defined by the ability to be uninhibited by financial restraints and ultimately finding the freedom to do what you want, when you want to.

Freedom is paramount.

The idea that we’re workers and that we need to trade our time for a salary is an outdated model.

Are you familiar with the etymology of salary and what that word even means? Salary doesn’t even have roots pertaining to money. In fact, salary is:

“…from Anglo-Norman French salarie, from Latin salarium, originally denoting a Roman soldier’s allowance to buy salt, from sal ‘salt’.”

I don’t know about you, but I don’t want to have an allowance to buy salt — I want freedom.

Passive income allows you to transcend the archaic model of trading your time and effort for money. It allows you to generate that same money (if not more) with zero effort and outside the bounds of a traditional time constraint.

How to Generate Passive Income (Even if You’re Broke n’ Clueless)

There are many ways of generating passive income. Below, we’ll outline some popular ones. These popular means of passive income do generally require extra capital in order to participate.

Afterward, we’ll go into more detail about the one way of generating passive income that can offer the most sustainable financial reward over the long haul.


Investing is probably the oldest and most common way to generate passive income. You purchase ownership in a company and reap the rewards of their enterprise.

However, investing comes with risks. First off, you can’t guarantee that a company will be successful. Second, the headline of this section included “broke.” You need extra capital in order to get into the investment game.

Real estate

Real estate can generate passive income and build wealth. Real estate has been known for years as the “safest and surest investment.” Specifically for passive income, we’re looking at purchasing real estate that’s rented out to tenants in order to turn a profit.

Similar to investing, this requires capital (a massive amount for that matter).

Owning an online business

Owning an online business is the best way to generate passive income.

Why? Because with an online business, you can create digital products, offer them to a marketplace, and sell them ad infinitum.

Are you familiar with the eLearning industry? According to ElearningNC:

“eLearning is learning utilizing electronic technologies to access educational curriculum outside of a traditional classroom. In most cases, it refers to a course, program or degree delivered completely online.”

In other words, it’s the act of using your knowledge in a specific industry or niche, creating a learning curriculum, and selling that to a market that’s looking for it and is willing to pay for it.

Furthermore, a study conducted by Reuters notes:

“Global E-Learning market is expected to grow from $176.12 billion in 2017 to reach $398.15 billion by 2026 with a CAGR of 9.5%. The key factors that are favoring the market growth are flexibility in learning, low cost, easy accessibility, increased effectiveness by animated learning, escalation in number of internet users and growing access of broadband pooled with mobile phones with online capabilities.”

That’s an industry that’s going to double its growth over a ten-year span!

A lot of you might be thinking, “But what if I’m too late for the party?”

The short answer here is, “No.”

I won’t go too in-depth into this idea in this article (for I already have in another), but all you really need is 1,000 True Fans (as noted in Kevin Kelly’s groundbreaking article, “1,000 True Fans”).

The idea is simple — in order to sustain a viable business, all you need are 1,000 True Fans (or people that will come for your products and services over and over) that can help you generate $100 individually, thus providing you with $100,000.

Now, for many of you reading this, it might seem overwhelming. You might be thinking this is an insurmountable grab of the market share, or perhaps that you’re too late to capture that many people.

Let’s take a look at the size of the market as a whole (the number of digital shoppers in the United States alone). According to Statista:

“In 2016, 209.6 million U.S. people were online shoppers and had browsed products, compared prices or bought merchandise online at least once. These figures are projected to reach 230.5 million in 2021.”

In other words, you’re only going to need to capture 1,000 people out of the 209.6 million that are online shopping.

Put another way — you only need .0004771% of the entire market in order to generate $100,000 annual revenue through this model!

When we take into account how realistic our efforts can be in capturing a customer base that can catapult is into the world of entrepreneurialism, let’s take a look at how to put that on auto-pilot (passive income).

Generating Passive Income (Step-by-Step)

Still using the 1,000 True Fans model to build our online business, we’ll go through a step-by-step process of how we can sell our products and services on auto-pilot.

Step 1: Come up with an idea that helps solve a problem

“I have not failed. I’ve just found 10,000 ways that won’t work.”

— Thomas Edison

Or steal an already existing idea from someone and make it better!

Now, I’m not advocating for plagiarism. A prime example of taking an already existing idea and making it better is Facebook.

Was Facebook the first social media site that promoted the individual and connected them to the world? Absolutely not! Remember MySpace?

Facebook took that idea and made it better. Now it’s one of the most valuable companies on the planet. However, let’s temper our expectations here. We’re not looking for the next Facebook. We’re looking to build a company that can first help provide for ourselves and our family — anything after that we can build it into is just gravy.

So what kinds of problems can you help solve (that are already in existence)?

  • Are you an expert in human health/fitness? You could help build a training routine/diet plan.
  • Are you an expert in self-improvement? You could build a self-improvement module of various tasks one could take and books to read that would help improve someone’s life.
  • Are you an expert in interior design? You could build a catalog of tools, furniture, and design ideas that one can implement into designing their own house.

There really are so many different ideas that can be generated here. The most important part to consider is coming up with an idea that helps a group of people (audience) solve a specific problem.

Step 2: Build a site that acts as a digital “brick & mortar” to sell your products/services

I’ll be brief with this one.

Blogging is the way of the future. If you don’t believe me, just take a look at the evidence that proves how much blogging has grown (both in size and revenue) in the past few years.

By setting up a blog, you’re essentially putting your “brick & mortar” store on the world wide web. If you don’t do this, you aren’t going to have a place to launch your products.

Step 3: Use an Email Service Provider (ESM) to build an email list and passively sell your products

Even after almost 30 years, the introduction of new technology, and the advent of social media, email is still king.


Because with email, you have a direct connection with the people you’re looking to sell to.

With various social media tools like Quora, Medium, Instagram, Facebook, and Twitter, you’re able to communicate with your audience, but you’re subject to the surprise eradication of your content. You also don’t guarantee that the information you wish to convey is sent to the individual directly.

With email, you have direct access to your entire audience (an audience that lives on your email list). You’re able to send messages and pitch products or services to who you want when you want to.

Don’t you ever get annoyed by all the promotional emails you get daily? I know I do at times.

If they’re so annoying, why do companies still use them?

Because they work!

In order to achieve passive income, once you start to create your online business and promote it with content, it’s important that you get those readers to become email subscribers. You do this by getting your readers to opt-in to your list.

There are many ways you can do this and I won’t go over the strategies in depth here for I’ve already done it with this resource.

Why an Email Service Provider is so important

An ESM is so important because, without it, you don’t have the means for passive income.

With an ESM, you’re able to pre-schedule out emails after someone joins your list and sent them “pitch” emails, promotional material, and urgency marketing campaigns on auto-pilot.

For example, take this scenario:

  • A reader sees, clicks on, and reads your article describing how to gain six-pack abs.
  • At the end of the article, they’re prompted with a pop-up or footer that notes if they give you their email, they can get a FREE “6-pack abs in 6 weeks” guidebook.
  • From there, they’re sent into a welcome email sequence that introduces them to your business.
  • After, let’s say, six days of automated emails, they’re prompted with a “Total Body Transformation Workout Schedule” video module. Now, since they’re a loyal subscriber, they’re pitched the video module at $100 (when it’s normally $400 — a 75% off deal, but only for the next 48 hours).
  • The newly acquired email subscriber can’t resist such a deal and buys the module.

You can see with this scenario, that after writing one valuable article, you have the potential for automatic, passive sales.

It’s all within reach, but only if you have the right strategies and automated tools in place!

Summing Up

Generating passive income is one of the hottest topics you can find on the web today.

And rightfully so — it’s essentially the 21st Century version of The American Dream (at least for me).

The ability to build a business that offers value to a community and sells the products or services you’ve built on auto-pilot, thus giving you the Freedom (with a capital “F”) to explore the world around you.

Who wouldn’t want that?

Now, there are various ways to generate passive income:

  • Investing
  • Real estate (through renting to tenants)
  • An automated online business

The method we cover here is through an automated online business. Generating passive income through an automated online business is real and possible as long as you have the right automated tools in place.

It also isn’t an undertaking that needs a substantial audience in order to keep it afloat. Using the 1,000 True Fans model, you only need around .0004% of the market in order to sustain a viable passive income.

Once you capture your market share, building your passive income machine is as easy as 1, 2, 3:

Step 1: Develop an idea that helps a community solve a problem

This doesn’t even need to be an original idea — you can take an already successful existing idea in the marketplace, add your spin on it, and make it better.

Facebook is the best example we have of someone taking an already existing idea and making it better.

Step 2: Build a digital “brick & mortar” so you have a place to launch your products/services

If you’re going to sell a product or service to an audience, you’re going to need a place from which to sell them.

Enter your blog/site.

Blogging is an industry that we used to think of as a joke some 10 years ago. Now, it’s a goldmine that has people entering the space daily.

When you own a domain and site, you have a place from which to store and sell your products. You need this in order to build a successful passive income machine.

Step 3: Use an ESP to sell your products on auto-pilot

An Email Service Provider is the most crucial tool you’ll use in order to make your product building and selling efforts go on autopilot.

With email, you have the means for direct contact with your audience and direct means to pitch and sell them new products as you develop them.

You can have someone join your email list and set into motion the automated sequences that will provide them value and sell them your products/services.

Creating passive income shouldn’t be just an idea you see as you scan the web — it should be a reality that you fit into your life.

Sure, it’s going to take hard work and time, but once you have all the pieces in place, you’ll open up that time so you can get back to what you’ve been searching for this whole time…

Your freedom.

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📚 3 Mil+ Views | 🤠 Internet Cowboy | 🍷 Wine Aficionado | I'll Teach You How To Build a 💰-Making Blog:

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