The Only 3 Income Streams You Need To Make a Living as a Creator
Short and long-term mindsets can create powerful synergy in your life
Hey guys,
I just have a quick update for you today. Last week, the weight of my recent move fell on me. There are a lot of little things out of my control and it’s causing my sleep schedule to fall out of place.
Regardless, the mentality is taking each day one at a time. Everything is going to fall into place. It always does with the right mindset.
Today, I have a really insightful story that I haven’t published on Medium yet.
Enjoy.
Daniel Vassallo is a real-life Twitter guru.
He's one of the most helpful guys on the Internet. He constantly tweets practical advice to his followers and follows up on most questions.
One tweet simplified a question I'd been asking myself for over a year now: How the heck do I make a living with only online revenue?
Here's what someone who's made almost half a million in digital products sales has to say.
Diversification is in plain sight
I recently took my feet out of the water and dove into the freelancing lifestyle.
Freelancing is great and all, but I've had a nagging feeling that I'm ready for "more." I knew I wanted another income stream but debated whether or not I could handle another freelance client.
This tweet hit me like a ton of bricks.
So, freelancing doesn't have to be a freelancer's only income stream. (Mind blown). Now it seems so obvious. Instead of selling my skills for time, I can package my talents into something that can work for me.
Below the tweet, Vassallo presents a beautifully drawn graph depicting three income streams and how much money one can expect to make over time. The colored lines are respective to the tweet above.
Freelancing has the lowest ceiling. However, that ceiling is determined by how much one values themselves. Informational products are seen high above the freelance line; then it dips down below it. SaaS is also shown, or software as a service, but the barrier for entry is high on that front. I do have some creative alternatives, though.
“Mix together for maximum effect.” — Vassallo
This is exciting for many reasons. The first of which is that you're only limited by the effort you're willing to put in. The first step is freelancing, where I'm at, and the next is to create digital products and even software.
Now let’s dive into the streams individually.
Starting as a freelancer
I once did freelance work for an NBA player, but I still kept my job.
The thing is, freelancing is all fun and games when it supplements your income. When it's your bread and butter, it becomes a drug. The highs are high, but the lows are really low.
Now, as the Great Resignation continues to unfold, the freelance lifestyle is appealing to more people. In fact, I recently took the plunge, and now I'm constantly on the lookout for ways to make money remotely.
It all starts with one high-ticket client who gives you enough work to cover most of your expenses. What you need to understand is they don't want to work with robots. Clients want to work with highly motivated communicators.
These clients might be on Upwork job boards, but you have to compete for the right to work with them. The trick is finding clients in plain sight. Pick a company you want to work for and show them what you can do. Don't just tell them.
Side hustles lead to products
I'll be honest. I haven't created a successful product (yet).
Years ago, I wrote a failed fitness ebook. I did everything wrong. I self-published a book in secret and forgot to provide any value to people who actually bought it.
Fraud alert detected! Close your browser because I haven't made $10,000 from an online course yet. What do I know about info-products!
But if you're still here, this is what I've learned about mistakes:
Failure is a prerequisite for future success.
You can't take Success 401 without passing Failure 101. Every win is based on a previous loss. Edison didn't give up when he failed his lightbulb experiment on the twelfth try. He failed hundreds of more times.
Here's how you get into the digital product game
First, become a master of a skill or topic. It's as simple as doing anything for 2–5 years until you have enough experience. Then you can package your knowledge into digital form. But it really takes that much time to do it right.
For example, you're a keto-diet food chef, and you've created 100 recipes for people who hate eating bread. Well, it's safe to say there are others out there who want to change their ketone levels.
The second step is to find your audience. If you already have the recipes, you're ahead of the curve. Instead of making a product right away, start by giving away some recipes for free.
Test your ideas with an audience first. Take their feedback and fine-tune your future business. Discover what people like and dislike about your content, and spend a few years being the best creator you can be.
After you know what the people want, the third step is monetizing. When I say side hustles lead to products, I mean that spending thousands of hours on something you enjoy doing will eventually lead you to make a business of it.
The grand takeaway is that you shouldn't rush a product. It's too important. The goal is to provide value for as long as possible, not oversell something, and make your customers hate you.
The subscription model isn't dead (yet)
The last line on Vassallo's graph is an exponential SaaS line.
This one takes the longest to develop and see returns that make it worthwhile. It's the long-term goal for freelancers who've already created info products.
The good news is you don't have to be a developer to be a subscription-based entrepreneur. There are options.
Substack is the first platform that comes to mind. Though it's already been developed, it's an email platform where readers can subscribe to their favorite writers for as low as $5/month. If a writer has $1,000 subscribers, then boom, that's solid income.
I use Substack, albeit my newsletter is free. Income for paid writers isn't passive either. Writers have to show up every week, so their audience doesn't ask for a refund.
If you don't want to show up, aka, you want to truly live off passive income, you'll need help if you're not a software engineer. Freelancers have an edge. They're used to working with others to bring ideas to life.
After saving up money from their info-product revenue, you could reinvest those earnings into hiring a team of developers. That's when the freelancer becomes the entrepreneur and doesn't realize it.
Everyone has different financial goals. If you want to live off one income source, you might choose a 9–5 and forget about the Vassallo graph.
I like it though. It gives me confidence that I'm doing what's suitable for myself as a creator. I bet you can relate too. It's freeing, really — knowing that freelancing isn't the ceiling. There is so much yet to be accomplished.
It's just a matter of finding the time to do it all.