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Work at Home or Develop Passive On-Line Income?

Updated on June 17, 2011

Work at Home or Passive Income Websites?

Lots of people want to make a living working from home or build an on-line business, and yes there is difference between the two. Of the people who want to do it maybe 90% will fail in the first few months. If you are still trying after 3 months: you are a winner even if your first Adsense check is yet to arrive! That's because most people think this is going to be quick and easy to make money on-line! That's what the ad said right? Making money on-line isn't easy or simple, but its certainly possible and my guess is that with current financial crises rapidly heading toward depression there are going to be lots more people looking to the Internet for ways to supplement their income.

I want to be up-front: I've learn a lot about making on-line, but I am still learning and although I am not making a living from it yet: I think I am ahead of 90% of people start off trying to make money online: Why? Because most people would have given up by now - because most people think that making money online is easy - and the sad truth is that it is not easy. Its like any business, and if you are new to business and new to marketing then you are going to have a steep learning curve.

Working From Home Relaxing? Photo: Dude Crush via flickr
Working From Home Relaxing? Photo: Dude Crush via flickr

What's the Difference Working From Home and a Business

Working at Home is just that you are still working for someone else. You may be an employee, but more likely you will be a contractor or a freelancer. You will get paid by the hour or more likely by your output. I am a freelance writer and get paid by the article or blog post that I write. If I get sick or go on holiday; I don't get paid.

In my opinion working from home is in the end probably worse than working in an office. At least in someone else's office I don't pay for the air conditioning, the computer, the coffee or the biscuits! I do have to get dressed, put on shoes and drive there so there are some costs involved. Generally though in the western world I will make a lot more money working in someone's office than I will if I work from home.

For other people though who need to juggle childcare or supporting elderly relatives, or just live in a remote location, working from home can be a viable option.

There are many other options, the most important of which is to sell your own information or skill: your writing as a freelance writer, your logos, your information product or coaching service. You sell your skills per an item or per the hour. The downside is that the Internet is truly an international market so you probably cannot compete on price unless you live in a very low wage country.

My experience is with freelance writing and yes I can earn more than the minimum wage in my country writing - but its hard work and work can be sporadic. And like any other job if you don't work you won't make any money.

Don't get confused though: working from home is not the same as having an online business: you are still trading time for money. You don't get paid if you are sleeping, sick or on holiday. A business will pay in those circumstances. A properly set-up business will generate you income whether or not you are working.

Developing an On-Line Business

So how do you build Internet business rather than a work at home opportunity: build income generating websites. The process goes something like this:

  • select a long-tail buying keyword phras
  • build a build a website/hubpage/blog around the same phrase which will generate income via your own product or for which you will be paid for advertising someone else's product

  • drive targeted organic (search engine) traffic to that site

  • rinse and repeat

Lets step through those simple steps:

Buyers Wanted! Photo: Hugo&Pauline via flickr
Buyers Wanted! Photo: Hugo&Pauline via flickr

Find A Long-Tail Buying Keyword Phrase

This is the hard bit. Getting this right is the key to everything. You see you can get lots and lots of traffic to site really easily. That's not the point: you don't want lots of traffic: you want people who are ready to buy.

A long-tail buying keyword phrase is just the phrase someone types into Google when they are looking to spend some money.

Here's an example:I published this hub about the upcoming movie staring Nicole Kidman getting hot in Australia It didn't take too long to write: there's not much writing to be honest. Australia Movie: 4200 views in 5 weeks. In the first week it was getting over 200 visitors a day. Did I make a fortune - no - people weren't going there to buy anything: they wanted to see pictures of Nicole and Hughe's kiss I was providing those for free and I satisfied their desire if you see what I mean. The keywords there are "Nicole Kidman getting hot in Australia" and "Nicole and Hughe's kiss" - and yes the typo is deliberate: many searches are typos.

So you need to pick a topic which solves a problem for the visitor. The example often quoted is Maddie Ruud's hub on healthy Wu Yi Tea which Larry recently mentioned on the HubPages blog earns her up to $100/day in Adsense. Another example is the one given by Paul Edmondson, HubPages CEO, in making supplemental income recently is this series of hubs about Rolex Watches which again makes consistent money for over two years. I am no expert but I can assure you that I have it on the best authority that recipes make no money: why - well when I search for recipe for a Greek dip and find one - your problem is solved: follow the recipe nice for me but no money for the author!

Avoid the obvious; its been done to death and there is too much competiiton. Buyers guide to Gucci sunglasses you will find a great deal of competition: Gucci sunglasses for kids (do they exist?) is a bit more speciailsed: cheap Gucci sunglasses for kids skiing - might be a winner (I don't even know if they exist I just made that up!)

Get Your Shop Setup! Photo:angelocsare via flickr
Get Your Shop Setup! Photo:angelocsare via flickr

Build a Site Around the Keyword Phrase

I know that some of my most useful and well-written hubs make me no money. My Review of Light Laptops consistently get visitors: but they don't make me any money: they don't click the ads because I provide lots of information. I thought maybe as the review got more and more out of date it would make money: but no it doesn't and I am pretty sure that it has too much information in it!

The other extreme is that if you searched for "blue widgets" and first site just repeated "blue widgets" 1000 times on the page - you would probably exit the site immediately: possibly using the back button but also possibly via the ads. That's why Google hates spam: it makes the spammer a lot of money and the user clicks through anyway.

The balanced medium is the difficult thing to find. This one was an accident: I replied to a request and wrote Australia Public Holiday 2008 does quite well - it peaks everytime there are school holidays on - why? Because often there are ads for school holidays on it: and I don't actually provide that information. The site in itself is useful - but some people need to click an ad to find the information they need - and they do.

I have used examples here of some of my hubs but today I tend to buy a domain name and build a site of my own. Simply so that I can match the keyword to the domain and not share the revenue. I usually use WordPress to build a site: its easy to make a WordPress blog look like a static site and of course the software is free.

Make sure you know how you are going to monetize your site before you start. If you are writing about sunglasses then you probably want to be an eBay affiliate. If you are providing information, Adsense may be better. Make sure you are writing about a topic which HAS a monetization option!

Typical ways to MakeMoney on Your Website:

  • pay per click e..g Adsense or Kontera

  • affiliate sales i.e. getting a percentage for selling someone else's product either directly or via Amazon or eBay

  • promoting your own product and selling it

Traffic Jam: Paris Photo danobit via flickr
Traffic Jam: Paris Photo danobit via flickr

Drive Search Engine Traffic To Your Site

Now I have a site how do people find it. You need to rank in the search engine listings (SERPS) to get buyers to your site and the way to do this is again "simple" - you need backlinks. Links from your site from another site. Recently someone asked in the forums how to do this and here is my list of free backlinks I can get for most sites I build:

  • build a hubpage and a squidoo lens
  • create your own blog on free sites such as blogger and tumblr link to your own hub
  • forums: use your link in your signature and post on relevant forums e.g. if writing about travel post on forum
  • do-follow blogs: post on relevant blogs who run the "do follow" plugin which means that google will count the link. Don't sign yourself "lissie" sign "blue widgets" or whatever your sites keywords are article marketing:
  • write an article and submit it to the major article directories e.g. - you get a resource box at the bottom of the article and can link to your site/hub in it.
  • write another article, spin it (write variations to avoid duplicate content) and submit in to lots of other article directories. This is tedious and I am using paid software to help my article submissions. I don't recomment this unless your business at the point that you will make more than it will cost you!

Why search traffic? Real people search Google for divorce lawyers in Utah or scuba diving schools in Queensland - they don't twitter, they don't drop entrecards, they don't vote you up on digg - they search, and almost all of them use Google.

Rinse and Repeat

Which is quite likely the most important thing. Some sites will fail, most of your sites will fail. Most successful internet business owners will make 80% of their income from 20% of their sites: the rest are failures. Don't fixate on your first site, or your second site: keep building and move on.

Yeah that is pretty much it: its simple and I didn't even get you to buy the e-book!

Oh you thought it was going to quick and easy - sorry !

The Advantages of an Internet Business

So you are a bit deflated and think this all might be a be a fair bit of work? Good getting realistic is the first step to success. Because if you do this right an on-line business can give you financial freedom.

Income producing websites are relatively passive income: you have to do initial work to setup a site and promote it up the search engine rankings. If you win that game you could have a site making somewhere between $1/day and maybe much more. Even a dollar a day is significant. That's $365/year say deduct $10 for the domain name thats around $355/year. Make 10 sites $3,550/year - make 100 sites $35,550 year. Even taking the hosting costs of around $25/month - thats a very nice little income. That's why my blog is called a Passive Income-A Journey! And that income will keep coming whether you are working or not. As in any business or investment strategy passive income is the holy grail.

Of course the problem with income generating sites is that there are no guarantees: you might find the perfect keyword, build the perfect site and for then get it ranked. Google doesn't publish how it ranks sites: if it did there would be a program you could buy that would guarantee #1 position: and Google would be dead as a search engine because all you would get in the listings are spam sites who have paid for the software! Google employs a lot of PhD's to stay ahead of the game too so what worked last month may not work next week - you have to be adaptable in this game.


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