When I first heard about the concept of passive income in my 20s, I laughed at the idea. Growing up, I never met anyone making money like this.
My mindset completely changed after a conversation with a woman I really looked up to. She earned passive income from her real estate business. Seeing someone I knew and trusted achieve this unlikely goal made me feel like I could do it too — although it took a while to finally get there myself.
Four years ago, I was dealing with postpartum depression and struggling with a 9-to-5 job in higher education administration that didn’t bring me joy. I decided to start selling digital products like business templates and party games on Etsy. To my surprise and delight, the side hustle started to take off.
As a 36-year-old mother of two, I now make $10,000 or more in passive income per month from four passive income streams.
Here’s my best advice for starting a successful side hustle:
01. Do your research
Passive income does not mean no work. It means front-loaded work that pays later. No matter what type of side hustle or passive income venture you’re starting, thorough research can help you avoid costly mistakes.
Many people get excited about their first idea or opportunity and jump on it, without running the numbers. For example, when I first started on Etsy I created budgeting templates. I found that these didn’t sell very well because there was less demand and more competition.
Only after I took the time to research keywords and trends in the space via Pinterest and Google Trends did I start creating more specific — and more successful — items for the shop.
I highly recommend doing financial projections and understanding your expenses before you ever spend a dime. One of the main reasons businesses fail, or never begin to thrive, is because they run out of money.
In many cases, this problem can be anticipated and dealt with proactively if you take the time early to project your expenses.
02. Make time for your side hustle to grow
Creating passive income streams requires an investment of time, and many people underestimate how much time they need to invest up front.
It’s easy to get distracted by day-to-day responsibilities (especially as a parent or full-time employee), but if you don’t take the time to work on your passive income projects, they’ll never come to fruition.
Schedule dedicated time each week to focus on and stick to your passive income goals. For example, when I first started, I would spend 8-10 hours per week developing the skills I needed for my business, and I did this for months.
Once I got serious, I started actively creating products 20-30 hours a week. Now I spend about 15 minutes a day working on it, answering messages and client queries.
Studying successful passive income earners has taught me that success doesn’t come from quick wins but slow and steady progress toward a specific goal over time. In short, consistency is key.
03. Automate everything
The beauty of passive income is that it allows you to earn money without active involvement on a daily basis. Automation is your best friend in this process.
Because I sell digital products on Etsy, the platform comes with the ability to automatically deliver once payment is processed. I use Convertkit to automate my email marketing.
Automation can save you time and help keep your revenue streams stable. I’ve found that failure to automate means more manual and mental work and less freedom.
04. Don’t be afraid to ask for help
No one can achieve success completely on their own. Seeking help from mentors, financial advisors and experts can significantly increase your chances of success.
I dabbled with side hustles for years, but it wasn’t until I heard a podcast by Gold City Ventures that taught me how to sell digital products on Etsy that I successfully built a passive income business.
After taking the course, I was able to start my business and earn money in about a month. It took about nine months before I started making consistent passive income.
Surround yourself with people who have the knowledge and experience you lack. They can provide valuable insight, hold you accountable, and help you avoid pitfalls.
Most importantly, they can encourage you when you feel like giving up.
05. Diversify your sources of income
Relying on one source of income can leave you vulnerable to market fluctuations and unexpected changes. I’ve spoken to many business owners who are still recovering from the effects of the pandemic because they put all their eggs in one basket: their business.
My passive income portfolio includes stocks, bonds, real estate, and my small business, which sells digital products on Etsy and my website.
Diversification is essential to spread risk and increase the chances of consistent returns.
06. Remember that there is no perfect time to start
I’ve seen countless people get stuck in the planning phase, waiting for the “right moment” that never comes. I have made that mistake too.
I credit studying positive psychology in grad school with helping me overcome that fear. Marilee Adams’ book “Change Your Questions, Change Your Life” helped me develop a growth mindset and “Why worry?” Asking questions like these helped change my internal dialogue. More optimists like, “What can I learn?”
The truth is, there is no perfect time to start, and failure is always a possibility. However, the sooner you take smart action, the sooner you learn, and the greater your chances of reaping the rewards.
Even small steps, like starting to do research and educating yourself, can lead to significant progress over time. It’s important not to let the fear of failure or analysis paralysis stop you from starting your journey to passive income.
Rachel Jimenez is an entrepreneur, professor and mother of two with a passion for helping others achieve their personal, professional and passive income goals. She runs an Etsy store as well as a blog, Money Hacking Mama, where she shares financial wisdom and practical advice for women navigating their careers, businesses and lives.