Even though there are no formal statistics, it is estimated that only 1% to 5% of people are successful at earning passive income. A majority of people are met with small success and most give up before they generate even the first few pennies.
Low Success Rate
There is the potential to earn passive income on the internet. However, there specific reasons why the success rate is extremely low.
- Fast, easy money – Earning residual income is usually portrayed as being fast, easy money. Most people give up on earning income because eventually this promise will be perceived as being a “scam” even though aspects of promotion, time and reputation are neglected.
- Promotion – Regardless of the method, exerting an initial effort is not enough to generate income. Promotion is required through building backlinks and social networking through forums, Twitter, Digg, StumbleUpon and other related sites.
- Time – On average, it will take 3 to 6 months to earn a few pennies or dollars of income using this methodology. The internet has a “maturation” process that every site or piece of produced content must endure. This time period allows for the site to age, gain page rank, visitors and build backlinks. Most people never reach the 3 month point before determining the attempt to earn passive income as a failure.
- Reputation – Building a solid online reputation is key to internet marketing and content production. Online visitors are less likely to click on links or buy affiliate products unless the site has been established for several months or years. Otherwise they may be perceived as a “fly by night” site or scam. Also, internet search bots and engines perceive reputation based on SEO, popularity and backlinks resulting in higher page rankings.
Methods of Earning Income
Internet marketing allows individuals who want to be self-employed and earn residual income the opportunity to do so.
- Content Creation – Creating niche blogs has increased in popularity for several reasons. First, it allows for targeting a specific section of the internet, increases the odds for success and decreases the competition. Also, it allows for complete control of the content produced. Most niche blogs contain some method of earning revenue through AdSense or affiliate marketing.
- Freelance writing and content production sites –eHow, Infobarrel and Hubpages allow writers to produce content and earn income by using pre-hosted sites. These methods require no financial investment, and are perceived as “no risk” by users.
- Affiliate Marketing – The most common forms of affiliate marketing require a niche blog or website. Amazon Affiliates, Commission Junction, and Clickbank are some of the methods used to generate passive income through advertisements and product sales.
How to Beat the Odds
Determining success at earning residual income is based on varying factors. However, several steps can be taken to increase the odds.
- Find a Mentor – Learn from those who successfully earn residual income. Many are willing to share knowledge, but will not reveal the exact methodology.
- Network – Working with others provides a support system during the “waiting period,” successes and failures.
Promote – Actively promote your residual income method by building backlinks and social networking. Also, give time for any published work to mature and reach its full potenti