How to earn passive income as a creator: 9 tips for success

How many income streams do you have in your creator business?

How many are you looking to build?

According to the 2024 Kit Creator Economy Report, most full-time creators have six or more income streams.

For example, baker Maurizio Leo has at least five income streams, including a paid community, affiliate marketing, and advertising.

Having several income sources is especially valuable for building passive income, which we’ll explore in this article.

What is passive income?

Passive income refers to revenue sources that don’t require constant, real-time presence to generate money. Most sources of passive income work because creators set up automations, such as email sequences or digital products that run in the background without daily input.

Contrary to some popular opinions, passive revenue is not about how little you work or finding ways to not work at all. It’s about using your time wisely to build products and systems to help you earn income even when you’re not actively working on your business.

Why creators should add passive income streams

Every professional creator should have at least one stream of passive income for their business.

Here’s why:

• Financial stability and peace of mind: Passive income allows you to earn a reliable recurring income with reduced effort. This is key to peace of mind as a creator, especially when 15% of creators listed “ diversifying income streams to reduce risk” as their #1 monetization challenge in our 2024 Creator Economy Report. Passive income might not be completely hands-free. However, it requires far less consistent monitoring than other income streams, such as offering professional services or speaking engagements.
• More time for creativity: Having a passive income stream means less time spent managing every aspect of your business. This allows you more opportunity and energy to brainstorm new offerings, experiment with new products, and resolve any business challenges.
• Scalability and flexibility: If you want to become a high-earning professional creator, you need to streamline your business and create a passive income stream. This frees up your time to craft higher ticket offerings, build a strong lead generation strategy, and create more content to showcase your expertise.

Debunking passive income myths: What’s true and what isn’t?

Let’s examine some common misconceptions that cause many passive income streams to fail.

Myth #1: Passive income is completely hands-off

Although parts of passive income are hands-off, it’s not entirely “passive.”

With all the moving parts of running a creator business—marketing, responding to customer messages, updating digital products—it’s impossible to run one properly without some form of presence.

For example, if you sell an ebook for passive income, you might have to update some of the information in it every few years or respond to emails from customers about the tips you shared or issues downloading and accessing the ebook.

Myth #2: High-priced information products will sell themselves

Even if you’ve built an impressive high-ticket offer, you still need to actively promote it. It takes time and energy to create a marketing strategy and set up the automation to execute it and earn passive income.

Myth #3: A successful passive income business requires no personal touch

A personal touch builds trust with customers. They want to know that you’re there for them, and that goes a long way to establish your authority and credibility—which helps you retain customers, keep your business thriving, and your passive income flowing.

How to generate passive income online

If you’re ready to start earning passive income, we have many ideas to kickstart your plan. The wonderful thing about these options is that you can do almost all of them using Kit’s features.

We’ll show you how to set up each of the ideas on this list so you can get started earning more right away.

1. Ask for donations

The easiest way to generate passive income is to share a donation link with your audience. You can do this with Kit’s Tips.

A digital tip jar is perfect for creators with a website or YouTube channel because they can permanently display a donation link. Of course, donations are inconsistent, so this income stream is not the most reliable for regular income, but it’s a good starting point.

On your Kit dashboard, select Earn > Tips and set it up. You’ll need to specify whether it’s a Good or Service, the taxable rate, and the Tips currency.

Then, you’ll get a chance to customize the landing page, checkout page, confirmation page, and receipt email, as needed.

Digital tip jar example by The Perfect French

Dylane teaches her followers French on her blog, The Perfect French, and uses a digital tip jar to drive some extra passive income in addition to website ads and selling products.

2. Use affiliate marketing

Promoting affiliate links on your website or social media platforms is another way to make passive income. With affiliate links, you get a small commission when people purchase items using your unique link.

This method is best if you have substantial website traffic or an engaged social media following since higher traffic is likely to increase the chances of purchases.

You can also share affiliate links in your newsletter if you use Kit. Remember to always disclose if your newsletter features affiliate links. Otherwise, you could be fined by the Federal Trade Commission.

Website and YouTube affiliate links are especially profitable since the content remains live over a long period; unlike social media links that may disappear over time, your audience will be able to use those links for years to come.

Affiliate example by Jules Acree

In addition to selling digital products, YouTuber Jules Acree frequently shares affiliate links in her newsletter, so she includes a disclosure at the end of each installment.

3. Display newsletter ads

If you write a regular newsletter with at least 1,000 engaged subscribers, you can earn some extra income by displaying newsletter ads on Kit. You can even handpick which brands’ ads to showcase in your newsletter so you only promote brands aligned with your values.

To get started, go to your Kit dashboard and click on Earn > Ads. You’ll get a chance to select brands you’d like to advertise for, set up your custom domain and payout settings, and then you can enable ads.

Potential passive earnings from displaying newsletter ads

Newsletter advertising can be surprisingly lucrative, especially if you have a sizable subscriber list.

With only 1,000 subscribers, you could earn about $15-$30 per newsletter edition. You’ll also earn from display ads shown in any automated Sequences or welcome emails you send out. That’s over $100 per month if you send up to four newsletters monthly.

4. Get paid to recommend other newsletters

If you’d rather not display ads in your newsletters, consider Kit’s Paid Recommendations feature. This means you get paid to recommend your favorite creator newsletters.

To maximize the earning potential, it helps to have a substantial email subscriber count and to recommend creators in your niche or complementary niches. This increases the chances that your subscribers will also sign up for the creators you recommend—and raises your chances of getting paid, too.

Best of all, once set up, the entire process is almost entirely hands-off!

Newsletter recommendation example by Cole Bridge

Creator Cole Bridge earned over $10,000 in 7 months of using Kit’s Paid Recommendations, which gave him momentum to keep investing in his own creator business.

5. Sell digital products

Digital products take time and effort to make, but once you’ve created an evergreen product, selling it is an excellent way to earn passive income. Digital products require no packing and shipping, and product delivery is automated for your customers once they click “Purchase.”

Selling digital products works for creators whose audiences can benefit from digital products like templates, checklists, printable downloads, and online calculators.

If you’re stuck deciding what digital product to sell, think about how you can offer bite-sized samples of your expertise in a format your audience can download and access on demand.

Fortunately, this applies to almost all niches, and there is a wide range of digital product ideas to choose from, including ebooks and online courses.

The main considerations with digital products are to create products your audience needs and have a solid marketing strategy for selling your products.

Ebook example by Iowa Girl Eats

Food blogger Kristin of Iowa Girl Eats offers a downloadable ebook to help her audience cook gluten-free meals on a budget. This is a great, low-effort way to supplement her revenue from website display advertising.

Kristin promotes the ebook on her website by creating a link to it in her navigation bar, which is an easy way to get more eyeballs on her offering.

Newsletter template example by Madison Wetherill

Web designer Madison Wetherill, who runs the web design company Grace and Vine Studios, also creates and sells newsletter templates on the Kit Marketplace to earn additional passive income.

6. Licensing and royalties

Artists, videographers, template designers, photographers, and other media creators can earn passive income from licensing and royalties.

Licensing is an especially popular income stream for musicians. It involves allowing others to purchase a license to use your music, art, photography, or even patterns. With licensing, you can earn income multiple times from one piece of art.

The only downside of this method is that it can be challenging to find a hosting platform that pays reasonably well and tough to sell enough licenses without an established audience who is familiar with your work.

7. Create an online course

Whether you’re a coach, blogger, artist, or musician, you can create an online course as long as you have an in-demand skill to teach. Although this is a form of passive income, once the course is created, you’ll also need to market it if you want to keep sales coming in.

One low-effort way to market your course is by hosting it on your website and linking to it on your social media profiles so that visitors encounter it as soon as they find your page or website.

Online course example by Effortless Academic

The Effortless Academic sells their Effortless Note Taking Course using Kit. The company also offers other courses and webinars on their website.

8. Offer a subscription-based product

Instead of a one-time purchase, consider offering a subscription-based product to earn recurring income. You could offer anything from a membership community to a paid newsletter.

Subscriptions are perfect for creators who manage a community or create content at a regular pace. The one downside is that this method is the least passive, as it requires your consistent participation, although at a slower pace than the usual content creation.

Paid newsletter example by Danny’s Essays

Danny Gregory is an artist and writer who shares his process and inspiration for fellow creators in his newsletter, Danny’s Essays. He offers a paid version, Studio Notebook, for subscribers who want more of his work.

9. Get sponsors for your brand

If you have a large newsletter subscriber list and would rather work with individual brands that align with your audience’s needs, it’s worth considering brand sponsorships.

Kit allows creators with over 10,000 subscribers to get brand sponsorships using the Kit Sponsor Network.

You can also score sponsorships by reaching out directly to brands that appeal to your audience. To land lucrative sponsors, however, you’ll need to publish your newsletter consistently and meet the sponsor requirements.

Newsletter sponsor example by Mark Manson

Author Mark Manson earns $15K per month from newsletter brand sponsorships alone. That’s incredible passive income earned from doing what he would ordinarily do for free—writing a newsletter to his audience.

3 important tips to build successful passive income

If you’d like to build and maintain a thriving passive income stream, here are four things you need to do:

Have the right mindset

Knowing that “passive income” means you’ll still need to do some work is key to winning at it.

You also need to put your audience first, focus on creating value, and help solve problems. If you don’t have that value-centered, customer-loving, passionate mindset about your work, your customers will smell the fake on you and run in the other direction.

Have a good work ethic

The secret to passive income is investing in creating ideas, systems, and processes that can run even in your absence. That requires a solid work ethic.

Be willing to learn about your audience, experiment with different product ideas, and try different passive income streams to find the best fit.

Focus on scalability

All successful passive income business owners must learn to delegate daily tasks to team members and automate processes so they can grow their audience and provide more value to more people.

Don’t be afraid to hire virtual assistants, master automation, and take control of your creator tech stack to scale successfully.

Start and scale your passive income business with Kit

As a busy creator with bills to pay, knowing how to work smarter is crucial to growing your business, and creating new passive income streams is a vital first step.

Kit provides a suite of tools to help you experiment with passive income streams and automate tedious email marketing processes to win back time.

Create your free Kit account now and start growing your passive income.