Dear Friend,

when we talk about passive income everyone thinks about investing in stocks.

You take 10% of your income and put it into an index fund (A list of companies like the S&P500).

Those companies become more valuable over time and you make money out of it.

On average about 7% returns (minus inflation and other shit that happens in the world and minus taxes you'll have to pay when you cash out eventually).

Decent strategy if you have some time. Like 30 or 50 years.

But did you know there's actually a MUCH faster and MUCH more profitable way to make money while you sleep?

It's called "entrepreneurship".

Let's see why building a business is an infinitely better source of passive income than investing and how to do it properly.

What is passive income?

We can think about books or e-books.

Google Adsense (posting ads on your website to profit from visits).

Investing... And other types of esoteric stuff.

But essentially passive income means exchanging value for money.

Without using your own time directly.

Think of a book.

You write the book. You sell copies of the book. The book now makes money for you while you sleep.

Your business generates passive income

Businesses work exactly like books.

When you have a business you're basically trying to do two things:

1. Creating value (writing the book)

2. Implementing a system to replicate that value at scale (publishing and selling the book)

Software is another good example.

Once it's built it makes money for you.

Not an easy task. But the outcome can be exponentially better than say, investing:

• You're in control (Your decisions shape the outcome)

• Great earnings after just a few years

• If you reinvest the revenue into the business you don't pay any taxes

• You can ultimately sell the business and earn 10 times more.

How to make passive income with a business

Building software is incredibly profitable.

Think that around 30% of the S&P 500 (the 500 most valuable companies in the USA) is made up by just seven tech companies in the top ten.

The problem with that is it requires resources most people don't have access to.

Delegating your work can also be considered passive income.

For example let's say you provide marketing services.

You can create an asset (a business that is formed by the people who work for you).

You teach those people how to do your job.

That asset generates value that you exchange for money without having to work yourself.

Having people do your job is great but it can cut your margins like crazy.

Been there, done that.

So, what is the best solution?

Productize your service

If you don't have enough money to build a tech startup and don't want to delegate your work, your best bet is productizing your service.

This means transforming your service into a product.

Package your time up and sell it as if it were a product.

In essence, think of how you can make it DIY for your customers.

There are several ways you could productize your service:

• Courses

• E-books / Books

• step-by-step guides

• toolkits

• checklists

Let's imagine you're a marketer who helps your customers generate better leads.

Let's assume you do this by building ad-hoc email funnels.

Each time you work for a new customer, you understand their requirements and build a specific funnel for them.

If you wanted to productize your service, how would you go about it?

You could create a comprehensive video course, for example.

• What are the best strategies you use?

• What are the best tools you use?

• What are some secret tips nobody knows about?

Record yourself while explaining it in a sort of teaser trailer.

Once you've done that, share the video with your existing customers to get some feedback.

Adjust what doesn't work, finish it up and there you have your productized service.

That way you get several benefits:

• It's relatively cheap to build

• You create your product one time only

• You don't need to have many employees

• You can invest your time into scaling the business (e.g. creating further courses or toolkits)

Makes sense?

I hope so. But even more, I hope you'll do something with it.

Until next time, forget about the stock market.

Yours truly,

N.

Sent while building esoteric stuff