Residual Income Web Blog

This post is a continuation of From Hourly Wages to Wealth-Building Residual Income, part 1, in which I described the various jobs and writing gigs I’ve done post-college. I also touched upon the passive income I earn now, instead of being paid hourly wages or a set amount per article I write. This post will describe how I transitioned — both actually and in my thought process — from wages to long-term residual income streams.

During my first online writing gig turning out short how-to articles with original titles ($11 each) and supplied titles ($10 each), I found out that the same website where my ghostwritten articles appeared, eHow.com, had just launched a Writers Compensation Program in which users could sign up without a screening process and receive earnings for their article, although details about earnings criteria were vague and statistics on individual articles’ earning potential did not exist. The program was so new, there wasn’t even anecdotal evidence about how writers and contributors would fare on the site.

Always game for an experiment, I decided to start writing some articles directly for eHow and do a  comparison to see which method was more lucrative. I’d go with the winner, as soon as I figured it out.

The article that started it all: How to Conceive Twins

Turns out eHow paid me more within a month of publishing my first article than I ever would have gotten from the content company. I think How to Conceive Twins earned $24 its first month; had I written it for pay I would have gotten a mere $11. I saw the potential — imagine if that article kept earning like that for the whole year?! — and I was hooked.

Trouble was, I still had bills to pay — including my college loan that paid for my English degree — and my family depended on the $500-$800/month  I earned on the side, to make ends meet. Because of this, I couldn’t stop my paying gig and concentrate all my efforts on eHow articles — especially since the fast-earning performance of my first article was not typical — most take longer to start bringing in the cash.

I came up with a strategy. I wrote down my monthly income goal ($1,000) and how much was currently coming from eHow, Amazon and Adsense. It was a small number, less than $50, but it was a start. I decided to write primarily for pay while building up residual income streams on the side, until I was earning $1k/month from my income streams. Then, with all my ducks in a row, I would quit my grading job and SEO content article gig.

Each month, I would reduce my work-for-pay based on the residual income from the previous month, thus freeing up more time for eHow articles and niche sites. In the beginning, I would sneak in extra residual-income-work time by getting up an extra hour earlier, often rising at 4:30 or 5 a.m.

It wasn’t always easy to find the time to do my articles and keep trying new residual income methods, but the motivation was always there. I had a sense of what it would be like not to be tied to my desk for an hourly rate or have to churn out 20 content articles a week to make my little side income. I also knew that residual income would boost my overall earning ability like nothing else. And so, determined, I kept at it. Even when I was tired from a cranky baby the night before or felt my social life was not up to par, I remembered my goal and kept going, knowing that soon I could sleep in if I liked and have friends over without worrying about getting enough time to write.

Ten months after I wrote my first article on eHow, and three months after publishing my ebook, I quit writing content

After ten months: Enough residual income to quit the day job.

articles for pay. I had already let my grading job go, just six months after I set my goal to transition to residual income streams. It was September 2008, and I earned more than my goal — over $1,300 from eHow, the ebook and Amazon.

My new goal is to generate a residual income of $50,000 a year, or about $1k/week, and to have it at that level within the next few years.

I plan to build up online residual income through a variety of sources, notably:

• My article library on eHow.com
• My ebook about maximizing eHow earnings
• Another ebook I’m planning
• Adsense on several websites
• Amazon & cj.com affiliate commissions
• Other affiliate programs
• Bukisa & InfoBarrel

Having seen the progress I made in 10 months while putting my mind to it, and realizing where my income is now with very little additional effort, I am confident that with renewed diligence I can meet that goal. It’s not a huge number — but I am only doing this on the side, very part-time as I raise my young children.

What are your passive income goals? How do you earn residuals online?