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Start a Business For Passive Income

When most people hear the words, “start your own business”, they start to think about how expensive it would be to purchase the building, stock the shelves, and pay the employees. This is how businesses used to run 30 years ago, but today, there is a much cheaper route.

Some individuals have decided to buy garage sale items and resell them on eBay for a substantial profit. If they post and sell 1,000 items in a year and make a profit of $10 on each item, they’ve just made themselves $10,000 in that year. This type of business does not need a building or office; it can be run by any one person that owns a computer and has an internet connection. Plus, the start-up cost is practically zero dollars. This is excellent, but I think that we can do even better.

I am a big advocate of regenerative (or passive) income. The eBay seller was not earning a regenerative income because if they wanted to make money, they needed to find an item to sell and post it on eBay. Without that item, there would be no money made. This may seem fine to you, but who really wants to buy and sell eBay goods for 40 years so that they can retire? I’m voting that no one will raise their hand to that. Now, let’s say that same person was an experienced eBay seller and wanted to pass their knowledge on to others. They write a book titled, “Everything You Need to Know About eBay”, and they are suddenly making a certain dollar amount for every book that’s sold around the world. They wrote only one book, but they continue to make money for years without lifting another finger. This person is earning a regenerative income.

If you need money right now, a regenerative income will not satisfy you. It often takes hundreds of hours of work before any money is made at all. If we continue to use the eBay book as an example, the final product may have taken several years to achieve! That means that they took the time to write every word without any payment at all. But, if the book sells well, all of those hours could equate to thousands of dollars.

I have recently taken a stab at starting my own business, and you’re reading it! This website was officially born on August 28, 2010. So far, I have made $25.14 from my efforts. If I did the math, I might be making about 5 cents an hour. But, in order to succeed, I need to think ahead 2 or 3 years. At that point, I will most likely have many offers to guest post, and the amount of hours I will need to put in are minimal. At the same time, if my readers and subscribers continue to increase, the pay will continue to rise. In other words, the income potential will increase, and the amount of necessary labor will decrease – these are the benefits of the regenerative business.

I encourage you to think about what it is you like to do (for me, it’s obviously writing about personal finance). Once you discover that, think about how you can gain customers that will pay for your passion. And, to take it one step further, consider how you can continue to grow the business, but at the same time, reduce your necessary labor. That may not have been completely clear, so let me utilize another example.

My wife (Dar) loves photography and might consider starting a business as a wedding photographer. She will begin the business by herself, and will have no employees. If she is hired to photograph a wedding, she will get paid X amount of dollars for her work. Let’s say she is fabulous (and she will be fabulous by the way) and is hired by 10 other soon-to-be-married couples. She is getting paid well, but all of the sudden she is stretched very thin and has hardly any time to manage the other aspects of the business.

At this point, most of the people I know would suggest that she hires employees to photograph some weddings in her place, but I would not. Employees will only overcomplicate the business and bring on more probability of mistakes. Instead of saving her time, this will most likely take up more of her time and create further complications.

Once Dar becomes well-known for her talents, she will gain a great trust from her clients. Also, Dar will most likely know the other photographers that are competing for the same business. Instead of trying to photograph every single wedding opportunity she gets, I would suggest that she start a web business referring other photographers!

Ok, before you think I’m crazy, let me explain. If a photographer is really having a tough time getting work, I think that they would be willing to give a cut of their profits to the individual that gave them the referral. That’s exactly what the site would do! It would allow Dar to freely choose the weddings that interested her, and also provide her the residual income from her website referrals.

Passive income is certainly a lot of work up front, but if you choose something that you already have a passion for and you stick with it, the financial benefits could be astronomical!

Money Passive Income


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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