What is Passive Income

Passive income has become a hot, Internet buzzword.  Everybody is trying to generate it.  But, what does it mean?  The concept of passive income, basically, is the process when income is generated continuously over time, by work done once.  It also needs very little maintenance once initially created. The only real way you can generate this type of income is to understand the elements that make up passive income.  As an example, let’s say you create an awesome WordPress theme that we’ll call the “DoItAll” theme.  This is what we’ll use as our product that will help us make money.  Here are the elements you’re going to need to generate the elusive fox known as passive income.

The Website

You can generate passive income without having a website, but this is a Web 2.0 article, so we’re coming from the angle of the setting up vehicles on the web.  Having a website is the foundation for setting up a steady income stream.   Your website is the “face” that everyone will see.  It’s your storefront that will encourage people to window shop, “oh” and “ahh” and your wares.  Since, in this case, you created a WordPress theme, you should use WordPress as your content management system (CMS) to create your website.  The DoItAll WordPress theme would be front and center. 

The Sales Page

A well-written sales page is what will draw traffic to what you have to sell.  The sales page is what is going to generate interest in your products.  A poorly written sales page will go virtually unnoticed, except to spammers and bots.  The long form sales page has been proven to work, but don’t feel obliged to always create a long sales page.  Explain the features of the DoItAll theme, add a testimonial or two and you’re good.

The Payment Processor

Now that you’ve gotten the attention of a potential customer to buy a copy of your DoItAll theme, you need a way to have them pay for it.  There are several payment processors that offer great value.  To get started quickly and on the cheap, Paypal, Google Checkout and Amazon Payments are the way to go.  If you want more bells and whistles, you may want to look at Authorize.net, WorldPay, and 2Checkout are a few you may want to investigate.  When you’re evaluating payment processors, the 3 things you want to pay attention to are security, whether they provide merchant account services (usually cheaper in price and more efficient), and the rates and fees. 

The Product

If the website is the foundation, then the product is the actual house.  Whatever your product consists of, be it an eBook or the latest Italian leather bag, it is the reason you’re in business.  The product doesn’t have to be the only product you sell, but sometimes the first is the most important.  All it takes is one good product that people find great value in to lift your income potential to new heights.

In order for all these elements to work to the maximum to help you generate income, something is missing.  There is an element that will help increase your earning potential several times over.


Automation is an essential characteristic that binds everything together and allows you to put a system in place that will generate income without any extra work on your part. If every element is working like a well-oiled machine, and there are no physical products to ship to customers, you can remove yourself from the process and collect cash for as long as you like.

Once you have a firm grasp and understanding to the elements of passive income, you’ll be ready.

Now get out there and start selling to the world!