Work Smarter Not Harder With Passive Income

Written By James

James has been involved in finance for over 30 years and actively trades and invests in many sectors.

A common mindset among people who earn a salary or wage is that the only way to earn more is to find a job that pays more or work more hours, perhaps with paid overtime or similar. They don’t know if you work smarter not harder you increase your income without working more. The same goes for self employed people who charge by the hour. Increase the hourly rate you charge or work more billable hours. Neither of those is ideal or easy to achieve. Not to mention hardly appealing.

Let’s redefine wealth creation in terms of working harder not smarter. Rather than promoting the hustle culture of long hours and neglecting personal needs, let’s explore smarter ways to earn – avenues that offer flexibility, scale, and financial liberation.

With only 24 hours a day and a finite number of high paying jobs, this can be a limiting mindset. There is also the effect on the other areas of your life such as time with family and friends. Luckily there are a few other ways to earn more without working more.

Tips to work smarter not harder

Passive income is the one that gets a lot of attention. Headlines are screaming that you should find a side hustle. Get a passive income, and soon you will be retired and living on a beach. It’s not quite like that though.

If you aren’t clear about what the concept is, think of something that pays out over the long term after some initial work at the beginning. An insurance agent is a good example. When they write a policy for a client, they receive a commission. They continue to receive a commission on each renewal for as long as the policy remains paid up. The work involved in a renewal may be minimal compared to the initial work or even nothing if the client continues to pay the premiums.

Passive income streams are great and how many people earn an income. They continue to earn for work they did, possibly years ago. That doesn’t mean they don’t continue to work. The secret is to build up a large base over time. Using the above example, the agent continues to get new clients. If they didn’t, they risk all the income stopping if the clients don’t renew.

It means the return for the work is not based on an hourly rate. You can still work the same hours per week. As the client base increases, so do the associated premiums. Therefore the commission paid to you increases. This is a common remuneration method in sales type industries where the product spans some years.

Occupations that traditionally charge by the hour have a few options. Professional service firms come to mind and many track every six minutes. Six minutes means ten units a day. Some use five minutes. Others use fifteen minutes or more. The principle is that the client pays for the time you work for them. Based on an agreed hourly rate.

If you are able to turn your work into a product you can escape the hourly rate grind.

You are probably already thinking this method rewards working slowly. It does, to a certain extent. However, most clients are price sensitive so it can only be taken so far. You work more hours or a higher hourly rate to increase your income. The opposite of how to work smarter not harder!

Turn your skills into a product

If you can turn your work into a product, you can escape the hourly rate grind. A good example is a tutor. It doesn’t matter what the area of expertise is for this example. If you create a course, people can buy it, and you no longer have to work with the client personally.

Rather than having eight clients a day paying $50 an hour for 20 days a month and visiting once a week, you may have 160 clients each paying you $50 a month. Both scenarios yield $8000 per month. If going from 40 clients a month to 160 sounds like a lot, remember you now have an international business. You’re no longer limited by geography. Take it further and produce the course in different languages for even more clients. This is a common example of how to work smarter not harder.

The course can be delivered online rather than in person. These courses can be pre-recorded or live. If you do an hour live each week, you have moved from working 40 hours a week to working one hour all without reducing your income. Yes, that’s a bit of a simplification. You may take a day to prepare and deal with things after the course. It still means you have reduced five days to one day.

Use some of the other time for marketing to get more clients. Increasing the number of participants won’t significantly increase the workload as it would if you were working one-on-one. This is definitely a work smarter not harder approach.

Multiple passive income income stream examples

Better still, if you have a particular skill and enjoy teaching others, you can leverage that skill into multiple income streams. Here are five ways to use similar content to cater to different audiences.

Writing books or eBooks – Creating and self-publishing books and eBooks can be a great source of passive income. Once the book is written and published on platforms such as Amazon Kindle Direct Publishing, it can generate sales and revenue over time without further effort on your part. You can sell your self-published titles in numerous ways, not just on Amazon.

Blogging – Start a blog on a topic you are passionate about and monetise it through various channels such as display ads (like Google AdSense), sponsored posts, or selling your products or services. While it does take time and effort to create quality content and build traffic, once established, a blog can provide a steady stream of passive income. This can be a great form of advertising for your other products like books and courses. Offer overviews for free in the form of blog posts and upsell the other products.

Online Course Creation – If you have expertise in a particular area, consider creating an online course. Platforms like Coursera, Udemy, or Teachable make sharing your knowledge easier and earning an income from it. Write the course content once, then earn income each time a student purchases your course.

Affiliate Marketing – If you enjoy writing reviews or sharing product recommendations, you can generate passive income through affiliate marketing. This involves promoting a product or service on your blog or social media platforms and earning a commission for each purchase through your referral link.

Subscription-based Writing – Once you have a loyal following who enjoy your work, consider creating a subscription based platform through sites like Patreon or Substack. Subscribers can pay a monthly fee to access your latest written content, which can become a regular source of passive income. You can offer your subscribers exclusive content, early access, and other perks.

The other way to increase income without working more hours is to move from time based billing to value based billing. This does require some work when setting the values. However, the benefits are two-fold. You can increase your earnings without working more (provided you have valued it correctly) and the client knows the cost at the outset. They don’t get any nasty surprises at the end. A happy client.

Even with hourly rates, the amount charged is not based exactly on the time the work is performed. Clients pay for the person’s knowledge, usually built up over many years.

Value based billing is comprised of two parts. The first is the value of the person’s experience and the second is the value of the work to the client. You may save the client $10000 with an hour of your time.

Should you charge the same to them as you do to a client where you saved them $5000 with an hour of your time? Yes, you should charge the first client more. Your value to them is more. You should be rewarded for that extra value.

There are a few variations on this theme; think of it as a success fee. You are paid a fixed amount plus a separate amount based on the work’s success. This can work across many industries.

In conclusion, shifting from a wage based mindset to embracing passive income, productising services, and value based billing can open up many possibilities for earning more without necessarily working more. This isn’t about seeking shortcuts or easy money and more about making the most of our time and skills. It’s about transforming our approach to work, looking at the broader picture, and leveraging today’s resources and technology. Remember it is to work smarter not harder.

While these concepts may seem daunting, they are attainable. With a strategic mindset, you can take steps towards smarter earning. You might not quit your day job immediately, but these ideas could supplement your income and maybe even pave the way towards financial freedom and a better work life balance. It’s time to start working smarter, not harder. Embrace these strategies, redefine your concept of wealth creation, and take control of your financial future.

Image by Austin Distel