When I first heard about the concept of passive income in my 20s, I laughed at the idea. Growing up, I had never met anyone who made money this way. My mindset completely changed after a conversation I had with a woman I really looked up to. She earned passive income from her real estate business. Seeing someone who I knew and trusted achieve this seemingly impossible goal, made me feel like I could do it too — although it took some time to finally get there myself.
Four years ago, I was dealing with postpartum depression and struggling with a 9-to-5 job in higher education administration that didn't bring me joy. I decided to start selling digital products like business templates and party games on Etsy. To my surprise and delight, the side hustle started to take off.
As a 36-year-old mom of two, I now make $10,000 in passive income or more every month from four passive income streams.
Here is my best advice for starting a successful side hustle:
Start your passive income journey
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Do your research
Passive income doesn't mean no work. It means front-loaded work that pays off later. No matter what kind of side hustle or passive income venture you are starting, thorough research can help you avoid costly mistakes.
Many people get excited about their first idea or opportunity and jump at it, without running the numbers. For example, when I first started on Etsy I made budgeting templates. I found that these didn't sell very well because there was low demand and high competition.
I highly recommend doing financial projections and understanding the expenses you'll have before you ever spend a penny. One of the main reasons businesses fail, or never begin to thrive, is because they run out of money.
Set aside time to help your side hustle grow
Building passive income streams requires an investment of time, and many people underestimate how much time they need to allocate upfront.
It's easy to get distracted by day-to-day responsibilities (especially as a parent or full-time employee), but they'll never come to fruition if you don't make time to work on your passive income projects.
Schedule dedicated time each week to focus on and stick to your passive income goals. For example, when I first started, I would spend 8-10 hours each week developing the skills I needed for my business, and I did this for months.
Automate everything
The beauty of passive income is that it allows you to earn money without everyday active involvement. Automation is your best friend in this process.
Because I sell digital products on Etsy, the platform comes with the ability to deliver automatically once a payment is processed. I use Convertkit to automate my email marketing.
Automation can save you time and help your income streams remain steady. I've found that failing to automate means more manual and mental work, and less freedom.
Diversify your income sources
Relying on a single source of income can leave you vulnerable to market fluctuations and unexpected changes. I've talked to so many business owners who are still recovering from the effects of the pandemic because they put all their eggs in one basket: Their business.
My passive income portfolio includes stocks, bonds, real estate, and my small business, which sells digital products on Etsy and on my website.
Diversification is essential to spreading the risk and increasing the chances of consistent returns.
Remember that there is no perfect time to start
I've seen countless people get stuck in the planning phase, waiting for the "right moment" that never comes. I've made that mistake too.
The truth is, there's no perfect time to start, and failure is always a possibility. However, the sooner you take action in a smart way, the sooner you can learn, and the higher your chances of reaping the rewards.
Even small steps, like starting to research and educating yourself, can lead to significant progress over time. It's vital not to let fear of failure or analysis paralysis keep you from starting your journey to passive income.
Be like Rachel with Parking Mate. Start making passive income as a side hustle and turn your dreams into reality.