How to earn money without working

how-to-earn-money-without-working-frontEarning money without working is perfectly possible, and it’s also a very smart way to earn money.

It’s not necessary to do any scam or anything illegal, and I specify this because, let’s say it, there are a lot of scams behind this idea. In this article instead I’ll explain how to succeed at it, giving you so many reasons to earn money without having a “regular” job, that having a job will not seem like something desirable anymore, but a calamity, like it seems to me today!

Since I often say that it’s necessary to get rid of the dumb burdens to make room for the smart alternatives, I want to start by explaining why earning money through a job is the dumbest way to earn money. And here I refer to the typical employee job, where you are locked 40 and more hours per week in an office or a workshop, often with your time monitored by a magnetic badge o by your boss.

(if you’re earning money exactly in this way, don’t take it bad. It’s easy to fall into this mechanism, in fact I also spent years trapped in an office, before arriving to the conclusions that I’m about to explain).

Why is it dumb? Simple: because you only earn money when you are working. Don’t you realize that this is a problem? Money flows to you only when you are at work. In the exact moment you lay down the pen and leave the office, you stop earning money. As soon as you leave the tools and get out of the workshop, money stops entering your account.

This is how a lot of jobs are conceived: you get paid for the hours, the salary is tied to the time you spend at work. And doesn’t it seem dumb to you?

Have you ever thought, instead, that you could earn money also when you are NOT working? When you’re sleeping perhaps? When you’re on vacation? When you’re spending time with your family? Well think about it now because it’s possible, and actually in the world many people are doing it already. If you want to do it as well, all you have to do is to switch from systems that produce active income to systems that produce passive income.

The common employee job is a system that produces active income, because you only earn money when you’re actively working. I list in another article the many reasons why this work model is often a failure, but here I want to debunk a myth about it, shocking you with a huge revelation:

The world doesn’t give a damn about how many hours you spend in the office

Really, only a small handful of people cares about how much time you spend at work. Among these there is your boss, who often is one of those who got brainwashed himself, to make him believe that this work model is the only possible one. And among these there are your colleagues, who often hate their job, but unconsciously become active part of a slavery-like job system because they check each other’s times, to make sure also others are suffering from it.

And all the rest of the world? There are many sectors in which the rest of the world will never know how many hours it took you to produce the good/service you’re producing, or they will be totally not interested. The only thing the rest of the world cares about, in fact, is the good/service itself. If it’s valid, they will buy it anyway.

Maybe for you this article is worth more, if I reveal that rather than one hour it took me ten hours to write it? Maybe the bread that you buy from the baker is worth more, if you discover that rather than half an hour he worked three hours to make it? Do you decide to buy the bread for its taste… or for how many hours the baker worked to produce it?

It’s obvious that this idea of tying the money that you earn to how much time you spend actively working is a nonsense. It doesn’t matter that the school system trained you specifically to search for a time-bound job, and it’s not important that “everybody” earns money exactly in this way.

The fact that “everybody” sell their time doesn’t mean that selling your time is a good idea, the contrary: it’s the dumb burden you have to get rid of if you want to make room for a different way of producing income, the smart alternative that really leads you to earn money without working most of your time. The alternative is a system that creates passive income.

What is passive income?

Passive income is the income generated by a web site on which there are ads (the “banners”). If the web site works and has interesting contents, in the night you’re actually sleeping while on the other side of the world, let’s say in Italy, an italian clicks on your ad and makes you earn few cents. You earned money while you were sleeping.

Passive income is generated by an apartment -of which you’re the owner or maybe you just have the permission to subrent it- that you rent to someone. Periodically you’ll receive payments from the guests without any need for you to work, apart from organizing sporadic maintenance.

A vending machine selling snacks, placed in a public building, is a simple and effective source of passive income. Periodically you have to refill it with snacks, but for the rest of the time you don’t need to work at it: you can rest or do other activities, in the meanwhile the vending machine keeps on generating income for you.

All the products that come from creative work, for example the books you write, the music you compose, the movies you make, once they’re completed and put on the market will make you earn money without working anymore. At every sale you will receive the “royalties”. Sometimes you don’t even need to create new products, but you can use the public domain resources, for example ancient classical music, to create a passive income system.

Financial investments are another source of passive income. Examples of this type are precious metals, foreign currencies, stocks. You buy these at a certain moment, then as time goes on -time in which you will not work- their value increases.

Notice that this last field is a bit treacherous: you need a lot of time to decipher the world of finance, surrounded by a lot of false and misleading information, before you can invest intelligently. Naturally, if you’re trapped in an office job 40 hours a week you don’t have any chance of deciphering anything, just because you’re too busy selling your time to the employer and you don’t have time to get informed on what’s best to buy.

A lot of other examples can be made: investments on internet domains, art, patents on inventions, buying and renting industrial machines, generally a lot of entrepreneurial jobs produce passive income, but I don’t want to list all of them now, I’ll probably do it in another article. Here instead I want to highlight some aspects that the sources of passive income have in common.

You don’t earn money by never working

The contrary, a lot of these systems require extra work especially in the initial phase, to be “launched”. But once they’re launched…

You earn money without working all the rest of the time

This second fact will motivate you strongly to create passive income systems, if like me you assign a gigantic value to the possibility of getting rid of a hourly job nonsense. It’s true, you have to make a bigger effort at the beginning, but the fact that after it you can keep on earning money without working for years, often for all the rest of life, is really amazing.

Let’s start from the creation. Building a passive income system can require big initial efforts. The nature of the efforts depends on the type of system that you choose. For example, builing a web site has the advantage that it has a very low initial cost (hosting + domain) but it surely requires a lot of effort in the first phase to fill it with high quality contents, original, that attract many internet users.

Buying an apartment to rent out requires a big initial investment (but consider that during the periods of “crisis” you can successfully buy with few tens of thousands of dollars) and also some stress to find the right apartment, deal with real estate agents, lawyers and do the paperwork.

Entering in the sector of vending machines can be difficult, because a lot of public buildings are already managed by big companies well estabished “in the business”, and they hardly leave any room for new competitors. You have to make some extra effort to find new opportunities. For example you can start by putting a machine in the music school of your friend, or in the touristic apartment -in which there’s a frequent turnover of guests- of your relative.

Producing creative work is definitely not easy. Creating music, movies, or books that people are willing to pay for takes talent (it’s also true that you will hardly develop any creative talent by staying locked in an office, doing repetitive work). Also “re-packaging” public domain resources in a way that people will like requires a certain amount of work.

Financial investments cost study. A lot of study time to understand how finance works, which products will really gain value with time, and which products to avoid. Avoiding the advice of many financial advisors who populate the bank offices can be a great start. I suggest instead to start by understanding the -paramount- difference between finance and real economy.

So, the most difficult phase is without any doubt the initial one, the launch phase. But once this phase is over everything runs really smoothly: the system you built continues to deliver value without need of your constant intervention, and at this point you get rewarded for the value it delivers, rather than for the time you spend working.

“How much” automatic your passive income system must be, you decide it. The system can get close to be perfectly passive, meaning that once it’s created it’s practically not needed anymore that you work on it, and all you do is to receive the earnings, for example the financial investments or the royalties for a book.

The system can also be partially passive, for example an internet web site can make you earn money without working most of the time, but it’s still necessary to do periodic updates. An apartment that you rent out makes money flow to your account for most of the time while you’re doing something else, but from time to time you have to do maintenance or deal with possible problems of your guests.

Naturally I advise to create passive income systems that are in line with your interests, this way even if these systems are not 100% passive you will feel like working on them, to maintain them, or even improve them.

Remember that the quality of anything that you produce, whatever good or service it is, takes off if you work on it with passion. This is why I think that if many people would reach economic freedom by stopping to earn money through “regular jobs”, and would start instead to earn money through systems based on their passions and talents, the entire society would greatly benefit from it. There would simply be more quality goods and services available in the market.

Decouple your income from your work

separating-income-from-workIn general, I consider very desirable that my income is as much as possible decoupled from how much time I work and where I work. Instead I want to earn money in proportion to the value that I produce and deliver to people. This because I realized, as I wrote above, the after all people don’t care about how I produced that value, but they care about the value itself.

I also consider desirable that there are automatic systems (and the growing technology is a formidable ally in this) that take care of delivering the value that I produce to people, so in the meanwhile I can use my life for activities that make me happy. For example writing, traveling, making comic videos, staying with family and friends are all activities that make me happy.

Get paid for the value you produce, not for the time you spend in the office

I write this in blue because I consider it the key advice of this article. Focus on creating and then delivering value to people, rather than worrying to comply with weekly schedules that interest only to a small group of office employees (on a world population of billions).

Value is what people desire or need. As long as you care about creating and delivering value to people, you will always find ways to earn money without working most of your time. This because you have the possibility to only create the value (starting the passive systems that I mentioned above), while you can delegate the delivery to technology or coworkers.

For example, if you choose to generate passive income through a web site, you only have to create the site and fill it with contents. Pay attention to create contents that are valid in the long term (for example I expect that this article will continue to be interesting for many years, if I’d write an article about the last model of cell phone it would stop being interesting as soon as the next model comes out). Once the site is ready it’s the server that takes care of delivering the value to a very wide audience, and with ridiculously low costs by the way.

A less virtual example is the apartment to rent out. You create the “value” by buying the apartment, doing rehabs, refurnishing it, installing all the services. After that you can pay an agency to manage the delivery of that value: an agent will find the guests, assist them, do maintenance, periodic cleaning, or other services that you can decide together.

Similar case with the vending machines: you can delegate to a coworker the periodic refilling operations and make the business perfectly passive. At that point you’ll be completely free from the phase of delivery of the value.

It depends on you a lot. For example, I have friends who systematically rent out their apartment to tourists. For some of them maintenance and interactions with the guests are rather pleasant, so they prefer to manage in person also these aspects of their business. This way they have the disadvantage of an income system which is only partially passive, but the advantage of saving the costs of the agency.

Others prefer to delegate everything to an agency: their system has the advantage of getting close to be perfectly passive, but the disadvantage of having to pay the agency.

How many passive income systems is better to build?

I think that it’s definitely useful to build more than one passive income system, in different sectors.This way, even if one of them stops working for events you didn’t predict (for example you buy an apartment in a touristic city to rent it out, but after few years the tourist flow in that city drops drastically) you still have sources of income that allow you to not return to work by hours.

Examples of combinations are: renting out apartments + web sites + precious metals, or: publishing books + publishing videos in internet + stocks, or: vending machines + online shops.

(remember to always prefer evergreen topics for your web sites, books, videos, rather than current news topics, for which the interest grows and dies within few days. Only the first ones are suited to produce passive income, the second ones require continuous work to “chase” the news.)

Consider that every system requires initial efforts to be created, so it’s not convenient to aim at 20 different passive systems, but that’s not even necessary. Often 2-3 passive systems guarantee a good diversification, and they can already produce earnings comparable to those of many employee workers. In addition, if like me you give more importance to your lifestyle than to money, you’ll want to keep things as simple as possible, avoiding to create an empire of systems that at the end would complicate your life.

Ok, if you arrived here reading it’s probably because what I wrote so far makes a lot of sense to you. But still, maybe while you were reading a couple of doubts appeared in your mind. Let’s see if I guess what they are.

Well. Isn’t earning money without working immoral?

Not working most of your time is generally seen as deprecable. Are you ready to be deprecated? I live without working most of my time and I don’t feel guilty for this.

Actually, I feel rather proud for projects that I created (online in internet an offline in the real life) that served thousands of people. I surely would feel rather guilty if instead, like it was happening when I had a regular job and I was doing consultancy work in the offices, I would still get paid to spend 8 hours “at work”, of which 4 really producing and 4 wasting time between email, phone, meaningless meetings, social networks or half asleep in front of a monitor for the post-lunch digestion.

I am convinced that working few hours per day, on the right projects and in the periods in which there is more energy, is the real recipe for productivity. And I even venture to predict that it will be a main trend for the future: people will work few hours per day and almost exclusively in creative sectors (painting, music, poetry…), while the machines will take care of the other jobs.

So do yourself a favor: be ahead of time and save yourself from the nonsense of badge swiping. Many unproductive employee jobs in which people are trapped will end up being done by the machines anyway. You can focus and acquire economic freedom now already, building passive income systems that do good to you and to others.

Ok, but not everybody can leave all the jobs

Naturally there are sectors that are not suited to produce passive income. A shop salesman needs to be physicaly in the shop during the opening time. An airport security agent needs to work in the check points at specific times. A programmer needs to be in the office in contact with the colleagues of the project, during the day.

In these examples there’s necessarily a strong bound between how much the worker earns and how much time he spends in the workplace.

The news is that exactly in this type of jobs, the active income jobs, the bound between income and labor often becomes a blackmail for the worker, who, if he wants to earn enough money to live, has to work dozens of hours every week, without having any time left for all the other aspects of life.

Many active income jobs could already be done in smaller doses, with part-time contracts, and in fact they would have much more sense this way. Unfortunately the opposite is done, there’s a dumb system that regulates the market. How crazy is it, that a person has to ask for permission to the boss if he wants to travel and explore a bit the world he lives in (often receiving a no)? Or that he has to ask for permission to spend time with family and friends?

It’s not convenient to repeat continuously “I hate my job” and “I hate monday” like many people do. You are not forced to choose this type of jobs. I wrote this article to make you see that now, already there are alternatives, systems that really allow you to earn money without working most of your time. Look around you and you’ll start to notice that many people live this way.

If you’re trapped in a time-bound job, start to build passive systems that produce flows of automatic income. Once the flows will be enough to pay your expenses, you’ll be able to get rid of the time-bound job and reach economic freedom.

To make it remember to focus on the right phylosophy: get paid for the value that you create and deliver to people.


Notes: this article has been inspired by the popular article “10 reasons why you should never get a job” by Steve Pavlina, of which I considered useful to write my personal version, a bit different. June 12, 2016: fixed few grammar errors and rephrased better few parts.

Related: The function of labor, 5 Cool ideas for entrepreneurs, What is your work ethic?

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