This is part 2 of a 4-part series on quitting your day job and making a living doing what you love. If you haven’t yet, read part 1 here.
It is not hard to generate an income that will allow you to quit your day job and escape the 9-5 rat race.
You’ll start out small, with just a trickle of cash, but it’s up to you to grow it to the point where you can live on it for life.
When it comes to writing your own paycheck, you basically have two options: either provide a service or sell a product.
And then there’s a better, third option that I will also discuss in this article.
There are advantages and disadvantages to each income method. I’ll go over these below:
Income Option 1 – Make Money Providing a Service (ie: Freelance or Service Business)
The easiest way to generate a new (or additional) income is to cash in on a skill you already have and provide a service. I did this when I left my corporate day job back in January 2008.
Since my training was in film and video production, I invested in professional videography gear and moved to Chicago. I was then able to quickly make a living doing freelance videography work for a variety of production companies and corporate clients.
I did not get a job at a video production house. Instead, I hustled and found my own gigs.
The advantages of providing a service is that it is super-easy to set up. If you already have the skills, you simply need to market yourself.
Because I already had training in videography, as well as a good resume and demo reel, I was able to get work quickly.
I did have to move to a different state in order to position myself in a more lucrative market. I was willing to do whatever it took.
There wasn’t much of a learning curve to get up to speed on doing what I already knew professionally. You don’t need to be a marketing genius or a sales guru to get business.
If you can make friends with people and act professionally, you’ll do just fine in finding work as a freelancer – provided you put the effort into finding the work.
But you do have to show up, and 95% of the time spent freelancing your skills is in actually looking for work!
You can easily make money providing domestic services like housekeeping, babysitting, or dog walking.
Or you can cash in on your computer, photography, or writing skills. Everybody has at least one thing they can do well that people are willing to pay for.
A major disadvantage of a service-based income strategy, however, is that you are basically creating a job for yourself.
I say this is a disadvantage because your ability to earn money is directly tied to your ability (and availability) to work. If you are sick, injured, or want to take a vacation, you don’t get paid.
You are also reverting back to the employee mindset of trading time for money. This is a bad thing.
You’ll only make as much money as you have time to work. It’s a losing battle. Forget about taking spontaneous adventures on a Thursday, or working remotely, part time, from an exotic location abroad.
I recommend starting a service-based business only as a short-term strategy for leaving your day job.
Unless you are absolutely in love with what you are doing and see yourself doing that until the very day you die, I would look at ways of leveraging or diversifying your service business to where you no longer have to trade time for money.
Income Option 2 – Make Money Selling a Product
The second income option is to make money selling a product. Whether you create your own product or sell somebody else’s, this is the revenue generating option that either takes a ton of time (and perhaps money) to create the product and/or a knack for sales.
As with selling a service, you might find yourself trading time for money. If you have a store, a kiosk, or a food cart on a street corner, you’ll only get paid when you are physically present, keeping the shop. If you have others sell for you, commissions and wages will eat away at your profits.
The advantages of selling a product is that you can sell it online or sell to buyers who sell the product for you, but inevitably, you always end up trading time for money creating more product, finding buyers, managing inventory, managing customers, etc.
The business might become cost-prohibitive if the product costs a lot of money to develop or manufacture.
A large initial investment in a new product is extremely risky. If the product flops, you’re out a lot of money (and time).
So what about selling somebody else’s product?
The absolute worst way I can think of to try to earn a living is through a Multi-Level-Marketing (MLM) or Pyramid Scheme. These “businesses” require an upfront investment, regular subscription fees, a minimum monthly product purchase, and the requirement to sell both the pricey products and the business model to your friends, family, and anybody who will listen to you – and gullible enough to buy into the pipe dream these companies try to sell.
Of course, there are people who have the personality and connections (and friends/family with disposable income) to be successful at MLM programs.
However, these people are very few and far between. Most MLM’ers are barely making enough to make any change to their lifestyle, let along quit their day job.
Most people who give this option a shot give up within a year because they end up spending more money and investing more time each month than they get out of the business.
Believe me, I’ve been there! It’s no fun having a closet stocked with expensive products your friends and family can’t afford to keep buying from you, and knowing that in a few days, you will need to buy even more of that product to maintain your sales quota and stay “in business”.
Instead of making money with the business, you’re paying money to stay in business, and the “can’t-fail”, pyramid-shaped business plan you were pitched months ago has long lost its luster.
A Better Option – Sell Your Knowledge And Experience
The best option for generating a long-term revenue is found within your own head, and from your life experience.
In fact, this is the ONLY method I recommend unless you are desperate to leave your day job immediately, in which case you can do what I did – freelance your skills as a service business while you build a source of income online.
So what does “selling your knowledge and experience” really mean? Let me give you an example:
Tracy and I discovered green smoothies in 2007. We started drinking these smoothies in 2008. We both lost weight and felt great.
Because of our passion and the knowledge and experience we gained, we became experts on everything green smoothie related.
We launched a blog in 2009. Two years later, we were earning a comfortable, full-time income from that blog, and we have done so every year since 2012.
Our business is neither a service business, nor is it strictly a product business. We have no inventory.
Instead, we packaged our knowledge and experience into a downloadable program (e-books) that has helped thousands of people lose weight and improve their health with green smoothies and plant-based, whole foods.
In short, we turned our passion, knowledge, and experience into a passive income source that doesn’t require a butt in a chair to make a paycheck. Our website sells for us 24/7.
We have the freedom to live absolutely anywhere in the world we want as long as we have a reliable internet connection.
We make money on holidays, weekends, whether or not we are sitting at our desk.
This is the business model that I recommend.
Find something that you are deeply passionate about, and turn your knowledge and life experience into an income-generating blog or website.
The advantages of creating a website that generates income online are many. For one thing, your website earns income whether you are actively working on it or not. It’s true – you can make money while you sleep!
The order and delivery process is 100% automated, and your website can attract potential customers and clients 24/7.
There’s nothing to ship and no inventory to track. The customers get what they paid for immediately, and I get paid before I even roll out of bed in the morning.
I get paid whether I work that day or not. This is impossible with a job or a service-based business.
The other great advantage of an income-generating website is that you have a global reach – not just your friends, family and local community that you are limited to with a work-at-home, MLM “business”.
With a website, you can create information products for little or no money up front and sell them for almost pure profit. (No more closet stocked with inventory that won’t sell.)
You can even launch a website and make an income without having an information product (like an e-book) to sell. Until you develop your own information products, you can sell other peoples products as an affiliate and earn commissions on those sales – provided these products are a good fit for your readers.
But please – don’t get suckered into “easy money schemes” on the Internet. There is no such thing. Build a real (blogging) business that provides value to a group of people who will gladly pay for your knowledge, experience, and solutions.
My personal experience is that the absolute best way to earn a living AND live the life you want is to earn a living online with your own website.
Would You Like To Learn More Book a FREE, 1-on-1 Strategy Session with me and we’ll discuss your online business idea, and how you can overcome the obstacles that keep you stuck.
I’ll get you clear on your goal, and work with you to develop a step-by-step plan to get you to your dream. And it costs you nothing!
Create Multiple Streams Of Revenue
A critically important action for getting ready to leave your day job and escaping the 9-5 rat race is to create multiple streams of income. Preferably, these multiple streams of income will be through online sources.
Now I realize that “multiple streams of income” is a buzzword that is usually followed by a glitzy pitch to pay $99 or more to buy into a can’t fail online “cash machine”. I assure you, this article contains no such pitch.
An important break from “employee mentality” that keeps you trapped in a cubicle is to understand the necessity of multiple income streams.
Employees accept and tolerate just one income stream – their paycheck.
Unfortunately, that one income stream can be cut off in an instant when the boss or company no longer needs (or wants) you around. And many employees think quitting their day job to work for themselves is risky!
So what happens when your only source of income is taken away from you? With the current economic climate, too many people have recently found out! Don’t be one of them.
Whether you are employed, currently self employed, or want to be, find ways to diversify your income sources.
As I mentioned above, earning an income online with your own website is THE best way to escape your cubicle, and build a lasting business.
How do you create multiple streams of income with a website or blog?
Well, you can create multiple websites over time. Of course, this may become difficult to manage as a popular, high-traffic blog can take a lot of effort to create.
A better idea is to create one website and place carefully selected affiliate ads for products that are specifically targeted to your readers – that’s income stream #1.
Then you can place some paid advertising on your website (income stream #2).
Eventually, create your own information product to sell such as an e-book, audio, or video product (income stream #3).
And don’t just rely on one or two products to promote or sell on your website. Cycle through different products to solve different problems that your readers have.
Also, if one product falls in popularity, or flops completely, you have others that can take its place.
As you build more and more content and your readership grows, consider creating a premium, subscription-based service where readers can get “inside tips” or special content (revenue stream #4).
Create a mailing list and send a newsletter with targeted affiliate product promos or pitch your own products for income stream #5.
Do sponsored blog posts for income stream #6.
Utilize Amazon Kindle Direct Publishing and other e-book marketplaces for income stream #7.
The list could go on an on, including hosting local workshops, teaching classes, speaking events, publishing deals (our work on Incredible Smoothies got us a publishing deal), and providing online teleconferences for your niche or industry – all of which can generate additional revenue streams.
In the same way that traffic to a blog comes from multiple sources (search engines, social media, links from other pages, and e-mail newsletters, to name a few), it’s critical to open up multiple paths for money to flow to you.
So how do you create multiple streams of income in a freelancing business?
Okay, so let’s say that you are currently employed and plan to do freelance photography as your second income stream.
You can create a third income stream by posting some of your images on stock photography websites where people pay to download and use your images.
You can do fine art photography and sell prints.
You can publish a blog on photography tips and promote relevant affiliate products or create an e-book or video product on how to take better wedding portraits.
You see there are lots of things you can do simultaneously that could bring in multiple streams of income, no matter what you do for a living.
With multiple streams of income, you have options. You are flexible and in control. If one income stream dries up or under-performs, you’re not suddenly cut off from your only source of money. You can fall back on other streams of income, or create new ones.
Maybe your photography blog and e-books are bringing in the same or more money than your wedding photography business. Maybe you want to take the next year off and do some travel photography. Creating multiple streams of income opens doors, and lessens the financial stress of self employment.
Do you know a lot about a particular topic but don’t want to manage a website about that topic? Write an e-book and then set up an affiliate service where people sell it for you.
Become the next YouTube star.
The Internet is full of opportunities like this!
Look at other areas of your life where you can easily create an additional income stream. Keep in mind that EASILY is the key word here.
Two or three income streams might take up most of your time; the rest should be income streams leveraged off the first two that could stand on their own if they had to.
You don’t want to work 100 plus hours each week juggling a hundred things that earn you pennies.
For example, generating content for our website is a full time job for my wife and I. But our mini e-books sold in the Kindle and Nook stores took less than an hour each to create and we spend absolutely no time promoting them. It’s easy, effortless money.
Just one of these 30-page mini e-books took us about an hour to create and has earned us thousands of dollars in just a few months.
A photography blog or selling stock photos might not take much of your time or earn you as much as your freelance photography business, but if something should happen where you can’t go out and shoot, you at least have other things in place that you can tap into and develop if you had to.
I once heard about a plumber who leveraged his skills into an online business. He set up a website and charges an hourly rate to provide expert advice to people working on a DIY home improvement project.
And even while DIY homeowners are trying to save a buck by doing the repair themselves, they know that it’s a great deal to pay $99 for expert advice than it is to get a contractor out to their home, or to do the repair incorrectly.
If you are a skilled laborer and not sure that making an income online is possible, consider creating informative DIY how-to manuals for simple household repairs, then selling them as illustrated e-books or videos.
This is exactly how you make money from your skills without having to be physically present in order to make money.
In part 3 of this series, I will go into the actual strategy of leaving your day job. I’ll specifically cover the topic of getting out of debt, reducing expenses, and aligning your life and environment so that you can accelerate the time it takes to quit your job and build a successful business.
About Davy & Tracy
Hey there! We're Davy & Tracy Russell, the husband-and-wife team behind this website. We help trailblazers break through barriers so they can turn their passion into their life's work through entrepreneurship. How can we help you?