How I Make Thousands of Dollars A Month in Passive Income

This post has one objective, to show you the exact process I follow to make thousands of dollars a month in passive income.

Before I go into the details I think it’s important to set your expectation about this post.

I realize many of my readers have the dream of making a full time income online. The nice thing about the web is that dream can become reality.

You might be struggling to make money online. Or you might be making a little money online and want to scale it. This post is aimed at giving you some areas to focus on to help you push thru your struggles and grow your income online.

In order to get to the point of making thousands a month in passive income you’re going to have to push thru your struggles and pay your dues. Your struggles will likely become the foundation that drives your success online.

As I talked about in my make money online post, back in 2002 when I built my first website I had many struggles. I didn’t know a thing about html, seo, affilaite marketing or even how I was going to really make money online.

I spent a lot of time during these years learning html, how to build websites, seo, affiliate marketing and trying out what I learned. I was also working a full time job and had other things going on.

This was one of the most frustrating times of my life. But now as I look back at these years I realize pushing through struggles is what led me to be able to generate thousands of dollars a month in passive income.

When I refer to passive income, I define it as income that I earn each month from websites that I hardly touch. These websites are fully automated and bring me income on a monthly basis.

I am not going to claim my method is super groundbreaking, it is actually quite simple. But it continues to work for me today and I continue to fine tune it to make sure it works in the future.

So lets get cracken.

1. Finding a Hungry Market With a Problem and Solve it

The first step in generating passive income is finding a market (group of people) that is eager to solve a problem. If a problem exists chances are there is a profitable market.

Make no mistake; there are literally thousands of potential tightly focused “hungry niche markets” out there.

What I do to discover them is simply look at my own life and those around me. I want to find the areas of my life I have knowledge about. I expand that by also looking at things in my life that are difficult everyday, fearful or that disturb me. Sometimes I even use those close to me like my wife, friends or children to discover markets.

I list all my ideas out in a huge brainstorming session. As new things pop-up in my life I also keep a detailed log, especially when something in life is frustrating me or if I encounter a problem.

For example, I recently added the topic of colic babies to my log because I have a friend that is absolutely exhausted because he can’t get his baby to sleep. After talking to him I realize this market has an immediate need and is an excellent potential target market.

2. Validating A Market

Once finding a market idea, I next validate the market. In order to generate passive income I heavily focus on SEO and free search engine traffic. So I want a market with at least 20,000 searches per month and that is not super competitive.

Since I am creating a passive income, I don’t want to have to rely on Pay Per Click advertising for traffic. It is to time consuming managing PPC campaigns. So free search traffic is the key for me.

In validating the market I review a couple of factors.

First I use the Google keyword tool for the exact search phrase match for the base level keyword. In my example it would be [colic].

This gives me a good idea of the income potential in the market.

I normally don’t target markets with less than 15,000 exact searches per month and prefer markets with over 40,000 exact searches.

Generally the more searches in a market the higher the income potential, but more searches may also mean more competition in the market.

I know if I choose a higher searched keyword over a lower one it’s going to take me more work to get my site to the top of the search engines. Therefore, I try to find a balance between good searches per month and competition.

In my review of the market each keyword is treated uniquely with respect to the search / competition ratio.

3. Digging Into The Market

After I determine if there is a big enough market, I measure the trend of the market with Google Trends. With Google Trends I am looking to make sure the market is not declining sharply. If it is I stay away from it.

Measuring the competition is also important. I use the Firefox plugin SEO Quake to get a quick snapshot of the competition for my chosen keywords.

Since I am relying on free SEO traffic, SEO Quake helps me measure the seo competitiveness so I can determine how hard it will be to get my site to the top of the search engines.

SEO Quake gives me a bunch of important seo factors about each site in the top 10 of Google. I can see the age of the site, the page rank, alexa rank, number of backlinks and a variety of other important seo factors.

I am looking for keywords that have sites listed in the top 10 of Google with low page rank, and low incoming links. I expand this research with these keyword research techniques.

4. Is There Profit In The Market

I don’t skimp on research. If I spend time building a website, I want to be sure the market I’m considering is profitable.

I review competitor’s sites in the market to see exactly how each is marketing online.

If a competitor’s website is using pay per click (PPC) advertising, I use a keyword spy tool to reverse engineer the PPC campaign. You’ll be surprised what you can uncover by reverse engineering your competitors.

I also review Clickbank, and CJ to see if there are any affiliate products in the market.

If I find a product on Clickbank that has a high gravity and is selling well (generally the higher the gravity the higher the sales) I review the sales page. If I feel the sales page is terrible, it is almost a sure thing I can kill it by making a better product and better converting sales page.

Amazon is one of the tools I use to really dig deep in a market. I want to understand in detail the market’s buying behavior.

By searching for the top books or products on Amazon I can find out what other items the market typically purchases. This helps me expand my reach in the market and get ideas about additional products or affiliate offers I could sell to the market.

5. Building My Site

Once I have found a market I purchase a domain and plan out my site.

For domains I try to stick with .com and domains that have the main keyword in it. The shorter the better. colicbabyhelp.com

For colic babies my domain would have the words colic babies in it, normally I prefer the keyword in the beginning of the domain.   Something like colicbabyhelp.com, which as of today is still available.

I build my sites with wordpress. I typically build the site with 20 to 30 highly targeted keyword pages to start. I outsource my content writing for about $8 per page.

In wordpress, I use the page option to build these pages and set the homepage to a static page.

This strategy gives the illusion of a static website, but my sites are actually a combination of a static website and blog.

After building my main pages I setup topically relevant categories so I can begin blog posting keyword rich content on the site. I normally don’t start blog posting until I get the site generating profit. I reinvest some of that profit into having more content created.

The blog posting helps the site naturally grow and build internal anchored links on the site which are both important for SEO.

For SEO purposes all my static keyword pages are linked off the home page via the navigation of the site. All internal pages are also linked via the navigation with anchored text specific to the page topic each is pointing too.

Since I rely on free SEO traffic, it is important I have my sites fully optimized for the search engines. I use the All in One Seo for WordPress plugin for basic onpage SEO.

For onpage SEO each page on my sites have a simple structure with keyword relevant titles, seo friendly urls, keyword rich H1&H2 tags and lightly mixed in keyword rich content. In the content of the site I randomly interlink the site’s pages with anchored text links.

For off page SEO I build tons of anchored text links thru a variety of methods. I will post more detail about my methods in a future blog post.

In general, you can get started by article submission, press releases, do follow blog commenting, web 2.0 pages, reversing engineering your competitors links, and video submissions via Tube Mogul.

The last component of my site is to have a “free report” opt-in box in the top right corner of the page. Very similar to this blog. This opt-in box is obviously to build a list for the site so I can build a relationship with the list and sell my products for years to come.

6. Monetizing the Site

By this point I’ve fully researched the affiliate opportunities and competitor’s sites.

For monetizing my site my first choice is to have my own product, but many of my best sites generate thousands per month with only affiliate products. My strategy is normally to promote affiliate products until I can get my own product together.

If I create my own product, I normally use content I can create quickly via video or I find good quality PLR products that I can modify quickly and make better.

When selling I tend to focus on videos. My videos are made in Camtesia, are PowerPoint style, and offer super high quality information on solving the markets problem.

If I am selling an affiliate product, I have a link below the video directed to the affiliate offer, otherwise I have a link that directs to a sales letter for my product. This sales letter is just another page on my wordpress site.

You might remember in the research phase I used Amazon to see what other items the market is interested in. This research helps me when I choose to sell my own information products versus being an affiliate.

The information captured from Amazon is used to create two or more upsell products that can be bundled and sold right after the initial sale of my product.

All my upsell products complement my initial product offering (normally making it even better) and do not require the customer to reenter credit card information to purchase the upsell products.

Overall, the ability to upsell is the main reason I prefer to have my own product over selling affiliate products. It allows me to drive additional profit out of each sale by expanding the market beyond the small niche I am targeting.

7. Wrap Up

As I said before this method is not rocket science. It is actually quite simple. It is one of many ways to generate a passive income online. I focus on this method not only because it works for me, but also because it has low startup costs, and can be done during my free time.

I hope this post has helped you see the true potential of making a passive income online. If you have questions hit me up with a comment below.

Tags: passive income