eBusiness Institute

The Truth About Buying Websites For Passive Income

The Truth About Buying Websites For Passive Income

Buying websites for passive income does not mean buying a website, doing nothing for the rest of your life, and then having money show up in your bank account.

But you can actually get to a point in your life where money does show up in your bank account – even though you didn’t do any work that day, that week, or that month to generate that income.

So today, we want to talk to you about what it really takes to create passive income from websites, including the Exponential Curve for Passive Income and an example of a website that’s paying $650 for every hour we put in. Watch the video and/or read the transcript.

Does Buying Websites For Passive Income Mean Never Having to Work For It?

Liz Raad: Hello again. Today, we wanted to answer a question that comes up often. What does passive income from websites really mean?

I think that’s a really good question. For a lot of people, when they hear the words “passive income”, they immediately jump to the idea of sitting on a beach, doing absolutely nothing for the rest of their lives. The money’s just rolling in. It’s like the lottery win where you never have to think about money again.

Matt Raad: It just turns up in your cash account and you don’t have to do anything for it.

Liz: Where you don’t have to manage it, and you don’t have to worry about money ever again. And I understand that thought process, because we haven’t actually come from wealthy backgrounds. We’ve felt the pinch of money, and we’ve watched our parents work really, really hard.

So I think for a lot of us, that is our ultimate goal. We think of passive income, where we never have to worry about managing money or any business (or anything else) again.

Matt: Where you’re sitting on the beach, casually looking at the bank account on your phone, thinking, “There’s another million dollars, thanks!”

You Don’t Have to Show Up Every Day to Make Passive Income through Websites

Liz: We don’t want to burst the bubble, but when we’re talking about passive income, what we mean is the difference between the income that you have to work for, and you have to show up for.

For example, if you’re working in a job right now (or maybe you’re self-employed), like a professional accountant, lawyer or chiropractor etc. Basically, anyone who works is swapping their time for money.

Essentially, if you don’t show up for work that day, your income stops. This is because you haven’t seen a client or a customer today, or you haven’t actually presented yourself at the office etc. So, what’s happening is you’ve intrinsically connected to the fact that Time is Money.

Matt: And you’ve got to turn up somewhere. Robert Kiyosaki talks a lot about this. He talks about becoming an investor. We’re talking about making true passive income where you’re not having to turn up every day to create that income.

Liz: It’s about making the jump from that linear thinking. When most of us start out, we’ve watched our parents work really, really hard. So, we tend to say, “Well, if I want to make more money, I either have to get paid more per hour or I’ve got to work more hours.”

Linear Graph for Time vs Reward

3 Ways to get Paid More when working a Traditional Job

Both of these strategies mean that if you’re going to get paid more per hour, it involves either:

  1. Some form of higher-level qualification. You have to outlay money and time to complete that qualification.
  2. It also means you’ll have to ask for more (which a lot of people are quite uncomfortable doing), by going to your workplace and saying, “Hey, you should be paying me more.” Most people are uncomfortable doing that.
  3. Otherwise, you have to work multiple jobs or work more hours. Unfortunately, time is something that we all have a limited supply of.

Matt: It’s important to also realise that in this day and age, there’s only a limited supply of jobs as well. We’ve noticed amongst our community (of people in the 30-40+ age group) of students who still work “traditional jobs”, a lot of them are saying, “Wow, we can’t rely on it.” Quite a number of them said they have lost jobs as well. So we need to be careful of that.

Liz: Especially as you reach 50, a lot of our students have said, “I can’t get a job again.”

Buying Websites For Passive Income Requires Some Work Upfront

So, we’ve got that very linear graph of one unit of time equals one unit of money. That’s a very difficult graph, because obviously as you want more money, you have to invest more time.

When we talk about passive income, what we’re talking about is breaking that link. We’re changing over to what’s called an exponential graph. Looking at the initial part of the graph, and this is the problem. Most people aren’t willing to go through the initial bit, because passive income does require work, especially upfront. It requires you to learn some stuff, but it also requires you to take some action and put some stuff in place that will pay off in the long term.

Consistency in Showing Up will dramatically Improve the Exponential Curve for your Results

So, for a lot of the time, the initial journey to creating passive income is that flat bit of the graph. It’s travelling along there, and that’s the bit that people really don’t like.

Matt: And this is what we teach – turn up each day, do something, and be consistent. It doesn’t have to be hard, but just be consistent and you will get there, and your graph will go up.

Liz: It feels like it’s not going anywhere. For a long time, you’re used to the one unit of time equals one unit of money. You’re putting in all this time and the money’s staying flat and you’re going, “Hang on, this is not happening.”

Matt: But then all of a sudden it gets really exciting. I remember one of our students saying to us, “Wow, you wake up and look at the bank account and all of a sudden, this is all coming together. Now I’m making serious money here. I’m quitting my job today!” It just suddenly crept up, and then the graph starts to kick up for them.

As Liz said, what we’ve noticed is (and we know firsthand what it’s like), it’s that bit on the bottom of the graph that’s the hard part. You’ve got to stay motivated and keep living the dream. But in that part, when we’re talking about passive websites, we are doing work. We want to make that really clear.

“That was certainly our journey when buying websites for passive income. You do have to do the work. But the cool thing for us is we love what we do online. It’s awesome, and it’s so much fun. It’s way better than turning up at a job” – Matt Raad, eBusiness Institute

Liz: We control our own hours.

Matt: Yes, and one of the other things that we’ve noticed when working with beginners in this space, they’re still thinking linearly. It’s so cute when I’m on the phone to them, and I say, “Hang on a minute, do you realize you can walk away from this website for the next couple of weeks? It’s not like your job!”

Liz: You don’t have to show up every day.

Matt: You don’t have to be there between 9:00am to 5:00pm. You can work on this a little bit in the evenings. Actually, there’s certain websites that you can literally park for 6 or 12 months. That’s not the ideal strategy, but what we’re saying is when it comes to being passive, it’s that idea.

We had a great mentor point this out to us, and I love this saying. “Done once, done forever.” It’s like writing a book – done once, done forever.

Simple Renovations on your Websites will help to Leverage your Passive Income in the Long-Term

Sometimes there’s a heap of work and we admit that. Some renovations we do on websites, we’ve got to work hard. Not work hard, work consistently.

Liz: Yes, there’s consistency that needs to be done.

Matt: Do a big block of work on it, and that might take a couple of weeks. But once it’s done, it’s done forever. And then we just might do a bit of maintenance over the years.

Liz: Actually, Matt, you’re working on a couple at the moment.

Matt: Yes, I’m doing two at the moment.

Example of Matt & Liz’s Website Renovation that makes them $650 an hour

Liz: There is one particular, which gives us a good example. It’s been making $2,000 a month for the last three years, and we’ve barely looked at it.

Matt: I literally just had to sort out all the site info from Liz. “Can you help me with the log-ins? Can you transfer them all over?” We had to hunt around and try and find them!

Liz: Yes, so that’s to do probably a week’s worth of work. You’re going to do a website reno, and you’re probably going to do it over the week.

Matt: To be honest, I don’t really notice the hours that it takes because I like to get up really early in the morning. I get up at 4.30 – 5:00am in the morning, and I’ll do a bit on it and I love it.

But, if I have to measure this in hours (because a lot of our newer readers still measure in hours), I guess that I’ll probably put around 40 joyous hours of SEO work into it. All I’m doing is fixing up the pages, making sure that it ranks better in Google, and I’m adding new content.

In essence, that’s what I’m doing, and that will take me around 40 hours I’d say. But I’m going to do that part-time. Now, the cool thing is, this is the ultimate passive strategy. This is exactly what we’re talking about in terms of a passive website, because once I’ve done that, other than basic maintenance, I won’t need to touch it again for another 3 years.

Liz: Well, our tech guy will look after it. He’ll make sure that there’s nothing wrong. He’ll troubleshoot anything else.

That website makes us $26,000 a year. Now, that might not sound like a lot of money, but take a look at the hourly rates. Now that that website’s up and running, I always liken it to a rocket. When you first launch a rocket, there’s a lot of fuel needed. 99% of the fuel is to launch the rocket. But once it’s up in space, you literally just shoot for the stars.

So that’s how we like to think about these assets. Yes, there’s going to be that 40 hours that we need to put in. This is where we organize a whole lot of stuff and use our brains. But then $26,000 is going to come in over the next year from that website.

If you work that out on an hourly basis, that’s $650 per hour that we’re getting paid on that website.

Passive Income is like Rocket Fuel to Get the Ship off the Ground
Renovating Websites for Passive Income is like the rocket fuel needed to get the ship off the ground

Matt: Tim Ferriss talks about the effective hourly rate in the 4-Hour Workweek. It’s a good way to view it, I guess.

Liz: So that’s $650 an hour. Imagine a top lawyer who earns that kind of money. Can you imagine the pressures that they are under, the amount of hours that they need to do, the amount of training that they’ve needed to do, the networking, the years? They’ve probably taken 10 – 20 years to get to that level. The amount they paid for training would likely be $100,000+.

Now, admittedly, that’s to earn around $1.3 million a year, if you extend that out. But isn’t it nicer to work in your jimmy-jams at home and in a skill that you’re capable of learning? Our students learn these digital skills within 12 months. So I think what it comes down to is having faith in the curve. We call it “Matt’s Graph” in our eBusiness Institute community – it’s the exponential curve.

Matt: Warren Buffett says most people can’t hack the weight along the bottom. That’s me paraphrasing Warren Buffett. They just can’t do the hard bit along the bottom. It is so true that creating passive income often is an initial work along the bottom where you don’t seem to see the results.

Liz: You use a lot of fuel.

Matt: Now, for the work that I’m doing with this website, I don’t think we’ll see the results for another couple of months, but I know the rewards are coming. What I’m doing is I’m improving the site so we don’t have to touch it again for the next three or so years.

How much Passive Income do you Really Need to Live your Dream Life?

Liz: That’s another really interesting point. When we’re talking about millions of dollars, I think most people think, “I need millions of dollars to be comfortable to never worry about money again.”

But really, when you think about it, you probably don’t need $100 million to live an amazing life, or to be able to do the things that you want to do and support the people (and the causes etc.) that you want to support.

There is that thinking that if you can look at Matt’s Graph, and say, “Okay, I want to create passive income because that’s going to give me freedom. Maybe the first step is just making my first dollar online, or my first $100 a month, or $1,000 a month.” We know when students hit that magic $1,000 a month, that is such a magic turning point. That’s where they start to have their curve starting to tick up.

Matt Raad shows the Exponential Curve for Passive Income
Matt Raad demonstrates “Matt’s Graph” – the Exponential Curve for Passive Income at a recent closed-door event

That’s where the passive aspect comes in, because (like we just explained), that’s when you have websites that have momentum behind them. They are now assets, like a property or a share etc., that are now a business. They have momentum behind them, and it only takes little flicks to keep them moving or to send them even further.

And as you get further and further up that curve, then you need even less amount of time, because your knowledge is worth so much more by that point. You have increased your experience and your understanding of the marketplace. – Liz Raad, eBusiness Institute

Want To Learn More About Buying Websites For Passive Income?

So again, I think this is also about mastery. It’s about sticking to something and really developing mastery of your digital skills in that area. This is why we are so focused on digital, because I think everyone can feel it intuitively that the way of the future is digital. We are all moving online. We are all moving to a digital way of doing virtually everything in our lives.

Matt: It’s just leverage.

Liz: So if you do want to set yourself up for the future and create passive income, then that is why we believe websites are such an incredible vehicle to be able to do that. We’ve demonstrated over the last decade that we can take a website, we can renovate it, and then we can just leave it. That gives you an incredible amount of power.

Matt: When it comes to passive income, it does take some work – but just remember: Done once, done forever. (…. Or done maybe once per year).

Liz: And just remember the curve. So get on that curve, that’s the most important thing.

If you like and want more videos and content like this, subscribe to the Matt and Liz Raad YouTube Channel.

To learn even more about buying websites for passive income, have a look at the Digital Investors Program.