How to Make Passive Income: how long does it take & how much does it make?

Whenever we have a prospect meeting, there is one phrase that sends us into this-probably-isn’t-a-great-fit-mode: “I want passive income.”

Today, I’m going to get straight to the punchline: if you’re curious about how to make passive income, I think it’s important (and a disservice not to) set expectations. The road to passive is anything but quick and profitable. As with any solid business venture, it’s a marathon, not a sprint.

Last year, we launched Designing Your Annual Plan; and today, I’m going to tell you exactly how long it took and how much we made.

Before getting into it, please allow me to give a little more context. I am a huge fan of diversifying income and building true, sellable assets. Having assets that don’t require exchanging time for money is important for a risk-adverse person (and that risk-adverse person may be me, ha).

I’m a long-time investor (the OG passive income, if you think about it); I love being an Airbnb host; and I’m carefully, slowly building a business to sell one day. But today, let’s talk about the other passive income. The sexy a la mode one that all the entrepreneurs are flashing about…

Last year, we launched Designing Your Annual Plan: a digital offering, formatted in an intensive series of videos and worksheets. It guides solopreneurs and small business owners through the deep, thorough process of creating an annual strategy. It’s the DIY version of the super-intensive annual planning we do with clients in our Advisory Practice. It solves the problem that so many bosses-without-a-boss face: “Where should I begin, and how should I spend my time?”

Since then, clients and others have asked how long it took us to build and how it did. (I assume that they’re politely asking how much money we made, so I’ll go with that 😂).

For Designing Your Annual Plan (and mind you – the product was already built). We started the build process with a tested, proven sequence and methodology that helps our Advisory Practice clients, who are in years 2, 3, 4 with us – grow profit by 20% to 800% (yes, eight hundred; it’s not a typo) year-over-year. So our product build essentially meant translating our existing process into an easy, DIY digital format. And that alone took 75 hours, which we did over 1.5 months. So on top of a normal workload, it was a lot.

And as it comes to the money, you hear me say all the time, “Who cares about the gross income? What’s your profit?” After paying for tech, labor, and referral fees, we netted $800. That net doesn’t include paying me anything, so you could say that I “personally” made $10.60 per hour from our so-called passive income.

Although you may guess that my tone in that line is one of resentment, it’s anything but. It’s 1-part laughing exasperation and 2-parts accumulated wisdom.

Believe it or not, it’s hardly a failure story. There’s so much more to come from it, as you’ll see in the coming months, in our forthcoming Passive Income Series. But I wanted to kick off this series of blog posts with little known facts about sexy, elusive “passive” income streams. Because as we often say in the small business world, “No one’s business looks the same from the inside, as it does from the outside.”

And back to the opening: why is it a red flag if someone mentions passive income in the first 5 minutes of a prospect call? It usually signals that they’re looking for a quick fix to underlying business issues. And as you now know, building passive income is anything but quick.