To make a million dollars over the span of a decade, if the path were linear, you’d need to make $100K/year. Monthly, that’d come to around $8,333.33. On a per day basis (365 days a year), that’d be around $274/day. Of course if you were to take the active income route, realistically you wouldn’t be able to work every single day of the year. It’s not like you’re a machine. But, most of us do own machines that can generate income every single day. By setting up a system, you can find ways to generate income 24/7. It’s a simple idea, though not many do it. Most people get stuck on the how.
With the passive income model, assuming that the system generates money every hour, you’d need to generate $11.42/hour. It breaks down to a mere 19 cents per minute. Is it really possible to generate income like this passively? Well, people work jobs that make far more than that per minute.
If we’re being honest for a moment, passive income isn’t exactly entirely passive. To set up a passive income stream, you’ll need to do one of the following:
– Front-load work
– Occasional maintenance (e.g. marketing or promotion to boost the stream, or improvements to the product/service or investment)
– If the stream dies down, create an alternative stream to replace it
What’s the point of setting up a passive income stream if it can die down or if it may require some work anyway? Well, because if you manage to set up a good one, you can generate income for several months, several years, or even for the rest of your life. You can generate income when you’re sleeping, when you become ill, when you’re eating, or even when you go on a trip. You also have potential to make a lot more money for the work that you put in vs. how much you could make at a job.
The alternative to creating a passive income stream that generates 19 cents per minute (or $100K/year) is to trade your time for money. If you were to work 8 hours a day, 5 days a week, that means you’d be working 260 days of the year, or 2080 hours a year. That means you’d have to be making around $48.08/hour. This is assuming you have your weekends free, but take no other days off. Let’s say you wanted 30 additional days off from the year for vacation or sick days. That would mean you would work for 230 days of the year, or 1840 hours. You’d need to bump up your hourly rate to around $54.35. That’s a little over 91 cents per minute. Interesting. The passive income model generates 4-5 times less than you per minute, but is constantly generating income without you having to work. On the other hand, you’re having to work a full 8-hour day more than 60% of the year (assuming you work 230 days of the year) to produce the same $100K/year.
How exactly would we even create a passive income stream of $100K/year, or 19 cents per minute? We haven’t even accounted for taxes and such, but to make the model simple, let’s just assume we are making 100% profit margins. Can anyone do this? Yes, I honestly believe so. Though, it doesn’t magically happen. It takes planning. You can start by setting milestones.
The first milestone you can set is to create a passive income stream, any kind. I’m not going to suggest any one particular kind because honestly, there are so many different kinds and everyone is unique. What works for one person might not work for another. For myself, my main passive income stream is through my own music that I make available through streams/downloads. For you, it may be an eBook, a course, affiliate marketing, a business, investments, real estate, fine art, or something else entirely. I’d recommend you research into passive income, or ask an AI to give you several ideas based on your current skills/interests.
Before you jump to any other milestone though, this first milestone the MOST important one. You must create a stream, any stream of passive income, even if it generates nothing at first. This may sound somewhat counterintuitive, but action is important. Even if you’re not the one creating the product or service, you’ll have to at the very least communicate your ideas in the beginning. So if you keep reading about how to make money or how to create passive income, I’d say stop right now and just try creating one based off what you know and have researched. List your ideas. Come up with a plan. Create the stream. Then, continue onto the next steps.
After you have attempted to create a passive income stream, you can set small targets. Generate your first $1. Then, your first $10. Then, your first $100. Generate $1/day. $2/day. $5/day. Reach your first double digit month. Then, your triple digit month. If you do this right, it becomes a bit of a high. It’s not necessarily easy to jump from single digits to double digits to triple digits per month, but you do start to see that it’s possible.
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My Own Passive Income Breakdown
I’ve dabbled into various passive income streams. My most successful stream was through music downloads/streams. It takes data analysis and experimentation to know what works. This is what I know and have done so far:
DATA ANALYSIS
– One of my songs generates over 80% of the passive income.
– That song generated income after it became trending on TikTok.
– In total, I may have put maybe 40 hours of up-front work to produce that song.
– When I finally figured out how to post that song to Spotify, it took another few hours to set up as a new income stream.
– It has consistently generated income for almost 4 years now, fluctuating between 2 to 3 figures per month.
– The majority of my listeners and plays for songs are based in South Korea and Japan.
– I’ve generated a bit of passive income in other ways, though not as consistently or as much
EXPERIMENTS I’VE DONE
– Using my songs in a few TikTok videos
– Adding new song covers and originals to streaming services
– Finding complimentary streams of income, such as affiliate marketing to add to my YouTube videos alongside my music, or my eBook for music creatives
– Merch such as stickers related to my music (I generated one sale, but the commission and payment threshold were so high that I quit this stream)
– Digital prints alongside my eBook
– Streaming (singing)
– Singing in another language (Hindi)
FUTURE EXPERIMENTS
– Regularly promote other songs on TikTok or other social media platforms
– Ask others to use my songs in their content
– Look into sync licensing for my original songs
– Post more content in general on YouTube, with my content in the description (music, eBooks, affiliate links, etc.)
– Update my eBook and actually promote/market it more this time
– Collaborate with other artists and producers on songs or videos
– Streaming (more live singing, music production, AMA, gaming with my music in the background, etc.)
– Submitting originals to radio stations
– Create content specifically in Korean to further promote my music
As you can see, increasing the passive income stream will take a bit of effort on my part, especially as I try to reach the next milestone of 4 figures per month before the eventual $100K/year. I don’t mind experimenting though until I reach this milestone. The one song that generated me the most income is mostly passive now, and I basically had to just put work upfront. Who knows, maybe another one of my songs will also go viral and generate just as much, if not more income. The cool thing about music is that it can become a hit at any moment now, with the power of the internet and social media.
I could break down the stats further to how many streams/downloads I generate in a month and on what platforms. That would help me to translate number of streams/downloads into dollars. Then, I could have a target for number of streams/downloads. It’s a bit tricky because the monetary values change based on the service (Spotify, Apple Music, etc.). Plus, my music is on a bunch of services now. Maybe at some point, I’ll simplify the math by getting some kind of average of cents per stream, and then I’ll have an ultimate goal for number of streams to hit for my music that translates to $1 million/decade. I think this is very much achievable. I generated passive income from one semi-hit song without much additional effort. So, imagine what could happen if I were deliberate with my efforts.
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As I mentioned earlier, passive income is not entirely always passive. It does require some work at some point. And, results vary. However if you’re going to have to put the work in anyway, you might as well set up a passive income stream vs. purely trading time for money. In the former case, you are generating income as you work and hopefully when you don’t work as well. In the latter, you only receive money that one time and that’s it.
Ideally if you want to accumulate $1 million over a decade through passive means, you’d generate an average of $274/day with little to no effort beyond the initial work. It is very much doable, and there are examples of people who have achieved this much or more easily. Mind you, there are plenty of people generating passive income like this who are no more knowledgeable nor skillful than you or me. They’re just people who have decided to make that much money without turning to a job.
You don’t even need to always plan out the details to start making passive income. With my one song, I simply was trying to fulfill the want of my listeners, which was for them to hear my music through streaming services. And, I was handsomely rewarded for that. Instead of focusing on the money side, you could focus on satisfying a need or want in the market. Start with those who know you. If no one knows you, put yourself out there. If you don’t want to be known, use a pen name. Create a faceless YouTube channel. Invest in private. There are so many ways to generate passive income that you don’t need to limit yourself. It’s all in your hands. Many people have been able to achieve a million dollars passively within a decade or less simply from their own interests. I mean, look at me? Now I might not have accumulated a million dollars passively (yet), but I was having a fun time getting recognized by some of my favorite artists and producers, singing and rapping in Korean when my first major passive income stream kicked in. Or look at YouTube gaming streamers? Your favorite book authors? The owners of your favorite businesses? The creators of your favorite products? If them, why not you?