- If you guys are starting a YouTube channel
because you want to create some passive income,
there is some truth to that,
but it is a lot of work
and it might not be as passive as you think it is.
This is Pat Flynn,
from the Smart Passive Income Podcast,
and he's gong to share with you guys some principles
about what it takes to actually create
an online passive income.
(electronic music)
Hey guys, my name is Tim Schmoyer.
Welcome to Video Creators,
we're all about helping you guys grow your YouTube audience
so you can spread a message that reaches people,
changes their lives,
and that's what Pat Flynn is doing over at his podcast
and his own YouTube channel.
YouTube.com/PatFlynn.
What do you do over there?
- We talk about business
and how to generate passive income
and we reveal the truth behind that,
which is like you said earlier,
it is not easy and it does not happen overnight.
You probably heard of people making lots of money,
you're probably seen lots of YouTube videos,
people sharing their income and like how cool it was
and yeah, we see what we see,
but we don't see a lot of the hard work
and the time spent to actually get to that point.
- I have worked with some big people in
the passive income space.
And I'll just suffice it
to say that there were working pretty hard 60 hour weeks
when I was working with them.
So like, there might have been like stage of that,
like maybe they would go on vacation
for four weeks at a time,
but it was hard work.
So what does it actually take
to create passive income?
- Well I think the big myth is
that you can immediately put something up
and then sit back and then you can chill at the beach
with your laptop and then money is going to roll in.
The truth is that that's not how it happens.
That can happen after step 10 right?
The first step is you need to build something
that actually works to solve people's problems
and help people.
Whether that's building a business model
through affiliate marketing or creating your own products
or building a website or building a YouTube channel
and getting ads.
These things work as a starting point.
But where things start to be passive
is when you begin to remove yourself from that process
as much as possible.
And just some business models you can't do that, right?
Now my first business,
which was an online business helping people pass
an architectural exam.
That website only needs a finite amount of information
to help solve that person's problem,
which is I need help passing this exam.
You could find that at GreenExamAcademy.com.
It's a very little niched exam in the architecture industry
which is where I came from,
and I haven't touched that website for five years.
Yet, every month it makes $1,500 to $2,000 a month.
It took 18 months to get
to a point where I even saw a dollar.
And I think that's the big thing.
People don't put in the time to actually create something
that can then be automated either through tools
or Google and search
and suggested videos or by building a team
that can help do a lot of those things for you.
- Around three and a half years ago,
my wife was pregnant with twins
and our life had to drastically change.
And there was a period of time there
where I actually backed way off of my business
here at video creators.
I went from working on it full time
to working about 10 to 15 hours a week
for about six months straight.
And I was very thankful that I was in a position
to be able to do that.
But, couple things,
One is like, there is a lot of work
that went in to get up to that point.
But then two, there was passive income still coming in.
But I noticed that, over time,
like it doesn't just kind of stay the same or grow,
like it still requires active involvement.
And I found that over time,
after the end of six months,
which was a great thing to do for my family,
but the business declined.
The revenue didn't stay the way it was
without my active involvement.
And that's why I felt like,
this isn't really, like, completely passive.
It still requires time and attention.
- Here's the truth.
There's nothing that is 100% passive income.
It doesn't exist.
100% passive income doesn't exist.
Real estate, it's passive income.
You have a house and you can rent it out.
You still to maintain it.
You still need a person to manage the tenants
that are in there.
The stock market and all those kinds of investments
that you can make that are passive.
You still have to pay attention
to what's happening in the market.
If there's going to be a recession,
you need to kind of be a little bit less aggressive
with your investment.
Everything requires maintenance.
But, there are kinds of business models
that can work for you instead of you working for business.
What passive income is,
is building businesses that allow you to remove yourself
from still having the business to work.
So, for example, building an online website
that helps people pass an exam.
I have a study guides there, the tools,
the information they need, people can find it on Google,
they go there, they purchase the product,
it gets delivered to them via email,
and then, I get money my Paypal account.
I am no longer needed to be existing in that process.
I still have to maintain the website,
but that process can happen automatically on its own.
You write a book, put it on Amazon,
people can find it and download it,
you get paid once a month from Amazon Kindle.
That's passive, but you still need to maintain
the information in that book and whatnot and so forth.
Non-passive business models are you take on clients
who hire you because you have a specialty which is great
and I would actually recommend starting there,
because your audience might have a very specific need,
you have a very specific skill,
and they will pay you for that
because you make life more convenient
or you are able to help serve them in a way
that they can't serve themselves with,
but as soon as you stop, your money stops.
- It's dollars for time exchange.
The price can maybe scaled at some point
but the hours don't.
- So, at that point, you can either be happy with that
and that's okay, it's totally okay.
If it's work that you love, then continue to do that.
Maybe you start hiring other people
to do the client work for you,
and you can create what's known as an agency
and you have to bow under you that then do that hard work.
- That's right.
- Or you then understand, oh, well,
I work with a bunch of clients
but they all have the same problem,
maybe I can create a course,
or an online product, or develop a software
that does that for them automatically.
Larger up-front investment but then,
you're able to now repeat the serving process
with something that you've built ahead of time.
- Sometimes, like when we hear about people
talk about passive income,
it kind of feels like you don't have to work anymore,
and I feel like if you're actually trying
to just do passive income to escape from work,
and the way I think about work is serving others
and providing value to other people.
I think that's probably not the way to go
and it's actually not going end up for you
the way that you would like.
But when we see this is how can I scale
the amount of service that I'm providing to other people,
having maximum impact, that's when I think
this can really start to work for you a little bit better
when you go into with that mindset
rather than like, I'm gonna do to two,
three weeks of work and then,
sit beach for six weeks. - Right, right.
And the result of this is you have flexibility,
flexibility and your time. - And freedom.
Take off, if you wife gets bedridden with twins for a while.
Alright, so, if you guys want to learn more
about the smart way to create a passive income online,
Pat Flynn has a podcast called "Smart Passive Income",
look it up, link's down below.
As well as a YouTube channel, YouTube.com/PatFlynn,
also linked up, down there, below.
And to get you started,
click that video you see on your screen.
It's 3 passive income business models
that will get you started, right away.
You're gonna learn tons so click that video and
Pat will see you over there. - See you.