Develpreneur: Become a Better Developer and Entrepreneur

There are passive income best practices we can follow to improve our odds for success.  There are also anti-patterns we want to avoid.  This area of entrepreneurship is so broad and loosely defined that best practices tend to be vague.  The anti-patterns are much easier to detail and avoid as we launch our product. Passive Income Best Practices Avoid Time-Wasters The income portion of the PI equation follows typical business recommendations.  You must provide a product that customers want.  On the other hand, the passive side of the equation can be far more challenging and even counter-intuitive.  These are simple in nature, and they often boil down to avoiding time wasters.  However, sometimes the things that make our products great are exactly those time wasters we want to avoid. Customers Can Drag You Down Your customer base is always a critical factor in success.  They need to be willing and able to pay for your product and service.  That takes care of the income concern.  However, they should also be as self-sufficient as possible.  A customer base that requires a lot of support or hand-holding will suck all of the passive out of a solution.  This combination adds up to a focus on direct and straightforward products over flashy and feature-rich ones. This holds for every aspect of your solution.  You want intuitive and straightforward to be the best description of your solution from installation, to usage, to exception handling.  Quality is vital throughout these areas as bugs often lead to customer calls.  You want to love your customers from a distance through easily automated ways.  Conversations do not fall into this category.  

We have often discussed how we can outsource and automate our processes.  This approach allows us to reduce the hustle portion of our side-hustle.  While that is a crucial step, it is also one that can provide its own challenges.  Outsourcing, in particular, is a learned skill and one that takes patience and research.  In this episode, we will look at some key considerations when you take this essential step. Refine Processes To Outsource And Automate Automation and outsourcing are similar in one core aspect.  They require us to refine and tightly define our processes.  We cannot be vague in our understanding or describing our processes.  If we are not specific in our definitions, then how can we expect a person or computer to reproduce the results accurately?  That is our first step.  We must master our processes, and then we can look for ways to outsource and automate them as we move towards passive income. Team Building Is Essential Whether we hire fifty people or an individual, we are building a team for our solution.  They will need to be comfortable working with each other and with you as well.  This concept is often overlooked when building a team.  The idea of chemistry is mentioned.  However, most professional teams appear to be selected based on skills first, and chemistry is a bonus.  You will be far more successful if you chase after both.  The team must have the skills to get the job done.  Also, they need to be able to work cohesively, dare I say it, as a team. Other Resources As stated at the start of this post, we have discussed this challenge several times.  Therefore, it may help to direct you to some of those useful links. Super Stars and Role Players – Building A Team Build Or Buy – Deciding What Is Right For You 3 Things to do Before Outsourcing

It is hard to argue that reducing expenses is not the least exciting episode of this season.  Nevertheless, this is an important part of our passive income strategy.  Debt is a killer of any income.  Also, any funds we free up can be used for investing and other income streams.  That makes this an essential part of the move to being a master of passive income. Reducing Expenses Adds Up Investing income builds over time.  On the other hand, debt reduces our funds over time.  Think of it as a form of negative passive income.  That means any obligation we have will automatically kill our passive income attempts and what that provides.  Of course, we could generate passive income to kill off our debt, and that would be an approach that snowballs quickly.  The more we can chip away at the principal portion of the debt, the better.  This can be supplemented by reducing expenses in general and moving those saved dollars to debt reduction or investments. Regular Reviews Help We often talk about periodic financial reviews of our businesses.  These not only help us see where our money is going, but they can also be a time to cut costs.  We might find a lower cost solution or haggle our way to a better deal.  In either of those cases, we have managed to reduce expenses.  This type of thinking is equally important to our personal finances.  Just as we can get into a spending habit for our business expenses, we can do the same for our personal ones.  Thus reducing costs may be as easy as changing a few practices. Plan on a personal financial review at least a few times a year.  Go over the line-item expenses and category totals for a few months.  You will be amazed at the kind of insight this can provide.  You might even find several bills that you paid without getting anything out of the service.  Cut back where it makes sense and do a little shopping to attempt to reduce the cost of some of the "needs" on your list.

It is hard to flip through a magazine or sit through television commercials without being exposed to a cashback program.  These come in many forms.  Some provide points or tokens of some sort, while others credit your account or even send you cash.  No matter how these work, they are all ways to get paid for spending money.  While not fully passive, these are good programs to take advantage of. Cashback Is Passive We all have to spend money.  These expenditures may be in small or large amounts, but it is a fact of life.  We spend money to live, whether through food, clothing, or shelter.  All of these are essential to our existence and require us to do some level spending.  Thus, getting paid for these transactions requires no real extra effort on our part.  That is almost the precise definition of passive income. Buy Some Fun Usually, when we talk about passive income, we work in dollars and cents.  That is not always the case.  We can earn credits, coupons, points, or other items of value.  These should all be considered a form of income.  Better yet, we often are limited in what these non-cash items will buy.  That makes these perfect earnings for us to spend on things we enjoy.  Why not use this form of passive income to make your life a little more enjoyable? Take advantage of frequent flyer programs or discount coupons for your favorite store.  Any of these options can bring you more joy in your life.  That should make these ways to earn income even more fulfilling than cold cash.  Even a buy X get one free program can put you in a little better situation.  Think about it, is having fun better when you get it for free or when you pay for it?

One of the best ways to generate a passive income stream is to profit from what you already do.  We have looked at a couple of ways to do this.  However, a hobby may be the best of these options.  We are essentially taking what we do for fun and turning it into a way to make money.  This discussion is not just about loving your job. It is about getting paid for the things you love to do. A Hobby Is Fun We have hobbies for many reasons.  One of the essential reasons for a hobby is that it "makes us happy."  It may be that we do these things to reduce stress or find solitude, but even in those cases, we are increasing our happiness.  We will go ahead and call that "fun."  We do not want to discount other benefits from a hobby.  However, the critical factor for our discussion is that we are fulfilled or "recharged" by doing these actions. Keep It Fun We all want to get paid for having fun.  However, that can sometimes mess up our good thing.  The introduction of payments to our hobby can make it feel like a job.  Think of rich and famous people or artists that "sold out."  There are plenty of stories about these people hating the thing they loved.  We should consider those as cautionary tales.  Is it worth it to make money having fun if it eventually sucks the enjoyment out of that activity?  Yes, this is a philosophical question.  Nevertheless, it is one we should contemplate as we step into this area of passive income. Expand Your Horizons One part of turning a hobby into a revenue stream is adding to that activity.  You might need to record yourself, write about experiences, or market your self.  Each of these additional tasks is valuable in and of itself as a way to become a better developer.  Thus, when you explore ways to generate a profit from your fun, you can also learn new skills.  You might even stumble across some new things you enjoy doing.  

We have looked at regular content like blogs and podcasts for passive income.  However, there are better options for passive income that are one-time content products.  These include things like books, instructional videos, white papers, and more.  These products are excellent options since they provide recurring revenue from a single push to create it. One-Time Content Takes On Going Effort One-time is a description for the creation of the content alone.  It is not a way to describe the effort required to keep that income rolling in.  The good news is that the work to keep things going is often small and can provide a sizable return on a few hours of work.  The content itself is key to how much work will be required to keep it "fresh" and draw in more (or repeat) customers.  Beyond that, you will need to refresh ads, participate in communities, or provide interviews and feedback to bring in people. Carve Out Time The time required after your content is made available to the public should be minimal.  Thus, we have a passive income solution.  Even better, the kind of work required can quickly be scheduled around your normal activities.  These chunks of time can often be addressed in a late-night session or by getting up early once a week.  You might even be able to group your time into a weekend afternoon once a month.  Thus, all of these options should make it as easy as possible to expend the time needed for your content freshness without impacting your daily activities.  This approach can even be used to provide regular enhancements to that content with minimal time expenditures. Many Options To Choose From The number of one-time content options available makes it easy to find one that works for you.  Each of these has some strengths and weaknesses.  However, they are all common in passive income circles.  Therefore, you have numerous resources at your fingertips.  Here are a few available on this site alone. Writing A Book – What You Should Know Before You Begin Creating a Podcast – Not Just a Lot of Talking Writing for Fun and Profit: A Business Communication Primer

A side hustle is an excellent way to improve your income.  However, that word "hustle" implies that it is anything but passive.  While that may be the case when you start, there is a path to passive income from many side hustle jobs.  You need to take advantage of automation and outsourcing. The Manual Side Hustle We almost always start with a manual side hustle.  That is the nature of such a venture.  We want to generate revenue quickly and are happy to trade sweat for dollars.  Thus, we jump in and spend little time planning our approach.  This phase is all about the hustle and quick victories.  In fact, we typically start with precisely the opposite mindset from a passive income stream. Step Away From the Ledge Once you get things moving in the right direction for a side hustle, it is time to start refining it.  The first step is to completely define the process you go through for your work.  That process can then be reviewed for opportunities to automate actions or outsource some of it.  Even a little success should free up some of your time.  Use those time savings to further review, refine, and automate the process.  There will eventually be a limit, or the work will be completely automated.  In either case, that time saved can be turned into new opportunities.  Better yet, you can use it to build passive income from scratch instead of that hard-working launch. Better Late Than Never The best thing about this particular approach is that you can start it anytime.  You can look for opportunities to automate or outsource from the beginning or once you tire of the hustle.  This can also be a cure for burnout as you will have a new point of view about the work once you start the passive process.

Real estate is an area where many investors make their money.  However, in the past, it has required a sizable investment to get started.  That is no longer the case.  We now have sites that we can visit that help us use the concept of crowdsourcing to buy into a piece of a real estate transaction.  Now that we can start small, it makes sense to look at this as a way to save, invest, and earn a passive income from those savings. Traditional Real Estate Investments There are a few ways to make money from real estate.  We can buy, hold, and then sell at a higher price as the holding becomes more valuable.  On the other hand, we can buy, improve the property, and then "flip" it by making value-enhancing changes to the property.  Finally, we can rent the property either on an annual or weekly basis.  We might even combine these as part of maximizing the return on our investment. Do Your Homework While this type of investing can bring a substantial return, there are many ways to make mistakes.  You can buy a money pit, in a bad neighborhood, or fail to attract renters.  The good news is that most of this will fall on the site when you are micro-investing.  However, there will still be questions you want to be answered that require you to do some research.  Take your time and do the hard work upfront.  That will help you improve your chances of an impressive passive income down the road. Get Started Today We mentioned a couple of sites during this episode.  When you want to look into micro-investing in real estate, the links below can help you start your research.  These articles list several sites that can help you start with this investing style, as well as providing a bit of a review of each site.  This form of investment is one that will require you to perform due diligence.  If you skip that work, then you might find yourself owning a small piece of nothing. https://yourmicrofinance.com/how-to-invest-in-real-estate-with-less-than-100-dollars/ Best Crowdfunding Real Estate Sites  

As forms of passive income from investing go, the idea of micro venture capital investments is the best fit.  These options can lose all of your funding.  However, they can also lead to huge earnings.  Think about owning a small piece of Amazon, Google, or Facebook when they started out.  Those are outliers, of course, but the success they had will probably occur again. Micro Venture Capital - Invest in The Ideas of Others There are numerous similarities in venture capital investing and purchasing stock.  In general, both of these are ways to own a piece of a company.  The difference is that VC investing is often a larger portion of ownership.  However, the micro venture capital approach is ownership on a scale close to buying a stock share.  This option is also a perfect passive income stream.  There is no need to come up with an idea, spend time on growing a business, or materially participate in any way.  You just put your money on a company you like and see where it goes. Not Kickstarter The basis for Kickstarter is to stir up interest in customers and crowdsource an idea or product.  There is not an exchange of money for ownership.  The transaction is far closer to simply buying a product, not investing.  There are some great ideas on that site and the odds are that some will appeal to you.  However, all you can do is buy what they are selling.  A piece of the company is not going to be on the menu. Check It Out The essential part of micro venture capital investing is finding that company you want to own.  That means there is going to be research required to find that product or organization.  Then, you will need to find or haggle your way into purchasing a piece of that company.  There are many ways to learn more about this, but experience and specifics are the best teachers.  Take a look at some of the sites that offer this option and poke around.  You might find your Amazon.

Anyone that has ever been in debt has seen how lenders can make money.  However, we often see the level of entry for a lender is far beyond our means.  Never fear, microloans are here.  This investment instrument allows us to step into the loan side of the equation with less than a hundred dollars. Fundamentals of Microloans This form of saving/investing involves contributing your funds to a pool of other investors.  The funds are then used to provide short-term loans.  Your money offers you a percentage of the overall loan and thus, a cut of the profits as well.  Your money is going to be tied up in the loan until it is paid off. Therefore, this is not a valid short-term investment option. A Better Long-term option There is more risk in microloans than there is with some of the other options mentioned in this episode.  You can compare against Certificates of Deposit (CD) and high interest, long-term savings accounts.  While the results vary, it is not uncommon for microloans to return five to ten percent interest on the investment amount.  Of course, there is a risk of losing all of your money.  A loan is a form of investment that does require some upfront research to help you craft a good strategy for your situation. Getting Started There are a lot of details to microloans that are not very exciting.  It is essential to know them.  However, I am not an expert and may not convey the right information for you.  That being said, check out some of the microloan sites for more details.  Even if you are not interested in this form of investing, it is worth your time to learn how they work. Prosper Lending Club