Thursday, March 05, 2015

How Passive Income Makes Money Faster Than Payment Upfront

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How can you make money online, and are some ways of making money online faster than others? As all established online marketers know, there are many very different ways to make money online, some easier and open to marketers of all skills and experience; some reserved for longer-established marketers with specific talents and knowledge.

To illustrate, we know pretty much anyone can make money on eBay, for example, also on Amazon, and virtually everyone can be paid to write blog postings and short articles for online writing sites. That's unless you're selling goods requiring special knowledge, however, such as antiques and collectibles; or you're writing to a specific and very complicated client agenda, where in both cases only the special few are likely to succeed.

And because choice of employment varies between individuals, the question of how and where to make money online is an entirely personal matter, and the answer will be very different for you as for me.

However, there's one question that applies to everyone wanting to make money online, especially for writers and artists, photographers and cartoonists. That question is: 'Is it best to seek passive income from my creative skills, or should I sell my work outright to the highest bidder?'

Let us see how those concepts compare and how they apply to both budding and experienced writers, based on creating content for their own and other people's websites.

Imagine the writer has his own website, where he uploads articles and earns a commission every time someone clicks on an AdSense unit at his site. Once the article is uploaded and visitors begin to call, just one article can generate commissions from Google for many years to come. So if the writer earns just 35 cents a click on an AdSense unit and receives three clicks a day, that's more than $7 a week he'll be earning from one article, and more than three hundred dollars over the year. That money can continue coming in year after year, even if the writer does no further work on his article, hence the reason future earnings accrued after a job is completed are referred to as 'passive income'.

Now take another writer, someone who sells his work outright on freelance writing websites, where competition is rife and writers are constantly undercutting one another on price. Our writer might create an article similar to the other writer who makes money from AdSense, but in this case the article has a one time price attached to it and once sold it generates no further income for its creator. The main benefit for this writer is that he gets paid before or just after the client accepts the article; the problem is he forfeits future earnings from his work. One time income like this is called 'upfront payment', and typically the writer will earn one hundred dollars maximum for his work, placing him way below the AdSense writer's annual income.

And that is why, for most people wanting to make money online, and writers in particular, one of the most important pre-task questions is this: 'Do I want to be rewarded for my work today, or should I hold out for more money later?' Almost always, the second option proves most profitable.

1 comment:

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Thanks again